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Is sales tax charged on translation jobs in the US?
Thread poster: C.A.Joseph

C.A.Joseph  Identity Verified
France
Local time: 03:47
English to French
+ ...
Jun 1, 2003

Hello,

I am currently translating a business plan for a customer who is about to start US based company (subsidiary) in Delaware.

I need to get a better understanding on how sales taxes work in the US. In Europe, we have VAT that is charged to all customers located in Europe.

How does this work in the US? For example when you (US based translator)invoice a translation job to your customer. What kind of taxes do you charge? What are they called? Do they vary from state to state?

Any help would be much appreciated.

Thanks


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Dyran Altenburg  Identity Verified
United States
Local time: 21:47
English to Spanish
+ ...
Sales tax for translations Jun 1, 2003


What kind of taxes do you charge?

None (Pennsylvania)


What are they called?

N/A


Do they vary from state to state?

Yes (where applicable)


[Edited at 2003-06-02 15:34]


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Maria-Jose Pastor
Local time: 21:47
English to Spanish
+ ...
NO sales tax on professional services Jun 2, 2003

there are no sales taxes charged or collected on professional services - at least not for the moment.

Sales tax is charged on "tangible items", though not all - depends on the state.

If you are still in doubt, contact the department of revenue services or commissioner of revenue services in your state - or better yet your accountant.

mj


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Jason Roberts  Identity Verified
Local time: 20:47
Dutch to English
+ ...
There can be State Sales Tax Jun 2, 2003

What has been said so far is true on the Federal Level.

Depending on the state in which one lives, there can be a sales tax if you deliver an actual physical document to a customer in the same state.


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Henry Hinds  Identity Verified
United States
Local time: 19:47
English to Spanish
+ ...
No Sales Tax Jun 2, 2003

In Texas, sales tax only covers sales of merchandise; that is, physical items. But I hear that in New Mexico all businesses, including translators, have to pay a "gross receipts tax", about 6.5%, what a drag.

There are only 50 states and they all have their rules on these things.


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Susana Galilea  Identity Verified
United States
Local time: 20:47
English to Spanish
+ ...
Illinois, anyone? Jun 2, 2003

No sales tax for translation assignments in New York state. It had not even occurred to me this might be different in other states...I just moved to Illinois, guess I'd better make sure!

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Edward Potter  Identity Verified
Spain
Local time: 03:47
Member (2003)
Spanish to English
+ ...
Delaware Jun 3, 2003

Delaware is the most popular state to incorporate in as the taxes there are very low. Sales tax and value added tax (VAT) are slightly different taxes. Each state has different sales tax laws. Approximate sales tax rates, from memory, are:
New York 4.0%
Virginia 3.5%
Maryland 5%
Idaho 0% (in an attempt to populate the state)
Montana 0% (ditto)
D.C. 5.75%.
Delaware 0%
New Hampshire 0%

However, they keep changing them, usually downwards in their competition to attract business.

Edward


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David Auerbach
Local time: 21:47
Spanish to English
+ ...
in Puerto Rico, yes Jun 2, 2011

with the exception of a few professional services (CPAs, architects, engineers, health professionals, educators, attorneys) almost everything is covered by sales tax in Puerto Rico, if your business generates $50,000 per year or more.

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Natalia Childs
United States
Local time: 18:47
English to Spanish
+ ...
california Jun 24, 2015

anyone knows ?

Thank you


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John Fossey  Identity Verified
Canada
Local time: 21:47
Member (2008)
French to English
VAT? Jun 24, 2015

I may be wrong, but I don't believe there are any Value Added Taxes in the US. If there is an applicable tax, you are either liable or exempt. A VAT in the European (and Canadian GST) style lets businesses be refunded for any sales taxes paid to vendors. I don't believe that's the case in any US jurisdiction that I'm aware of.

(I only just noticed the date of the question. I assume the OP is not still waiting for the answer!)

[Edited at 2015-06-24 20:53 GMT]


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Bernhard Sulzer  Identity Verified
United States
Local time: 21:47
Partial member (2006)
English to German
+ ...
No sales tax added Jun 24, 2015

No. You don't add a sales tax to your fee for a language/translation service.
In April, you pay YOUR INCOME tax based on last year's income. That's it. I live in Ohio.

Also see Maria-Jose Pastor's comments above.

[Edited at 2015-06-25 00:41 GMT]


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Triston Goodwin  Identity Verified
United States
Local time: 19:47
Spanish to English
+ ...
I'm originally from Idaho Jun 25, 2015

Edward Potter wrote:

Delaware is the most popular state to incorporate in as the taxes there are very low. Sales tax and value added tax (VAT) are slightly different taxes. Each state has different sales tax laws. Approximate sales tax rates, from memory, are:
New York 4.0%
Virginia 3.5%
Maryland 5%
Idaho 0% (in an attempt to populate the state)
Montana 0% (ditto)
D.C. 5.75%.
Delaware 0%
New Hampshire 0%

However, they keep changing them, usually downwards in their competition to attract business.

Edward


And their efforts seem to be... uneffective. I am considering the idea of moving back. It's not a bad place to live, all things considered.


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Yolanda Broad  Identity Verified
United States
Local time: 21:47
Member (2000)
French to English
+ ...
California and other states Jun 25, 2015

I have some memory that about fifteen years ago, California was trying to tax translations as part of their sales taxes, but they dropped that idea pretty quickly. Translations are services, not goods.

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Michael Wetzel  Identity Verified
Germany
Local time: 03:47
German to English
complicated Jun 25, 2015

US sales-tax law is extremely federal and it is difficult for anyone thinking in terms of a VAT-system to really grasp:

Just a little taste of the issues involved:
http://www.bizfilings.com/toolkit/sbg/tax-info/sales-taxes/sales-tax-in-service-industries.aspx

You can see that there were some states taxing all services (probably more states by now) and other states taxing some services.
You can also see that there are special regulations for retailers and manufacturers that are at least partially comparable to VAT refunds for businesses.
Once interstate sales are involved, things can get very complicated with "use taxes", etc.
It is correct that the (probably vast) majority of states do not tax services (including translations), but it is not correct that no states tax them.
You need to refer your client to a good accountant who is familiar with the issues involved in this.


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