Sales tax is collected by the state, so you need to ask an accountant familiar with the state(s) you have a nexus in. A lot of other taxes you may be subject to are specific to your state and even county and township. I pay 3 types of state taxes and 3 types of local taxes for my business. It'd be different in another state.
Yup, sales taxes are a state issue. Like i said, state taxes are complicated and i'll try to find the time to dig up that 50 state matrix which is a guide to all the states and how to treat software sales...
I'm in FL and have been trying to figure out how sales tax applies for my startup as well (http://www.spokesystems.com). We are building a web based, subscription paid, application similar in scope to Basecamp, but for construction project management. I would love to get an opinion on the sales tax implications for FL. Thank you in advance to the fantastic HN community.
Honestly, I cant remember off the top of my head the SPECIFIC details related to florida but i can almost guaranty you that you're business is providing a taxable service.
(1) Your business isnt provided a customized system so it isn't a professional service.
(2) A web portal or a web 2.o application is more a service than software, but state tax laws have dealt with it similarly to software.
(3) You could argue that your service is really a report generating service because your helping clients generate management reports on the status of their projects. Reporting services are almost always taxable sales.
Hope this helps, i'll probably post that matrix whenever i find it haha.
Darn. I was thinking along the same lines as your response, but hoping there was an easy answer. I'll definitely do more research into FL's tax laws, but I appreciate your willingness to lend your opinion. [Startup idea: state and federal laws translated into understandable language...a Wikipedia of laws. Probably not the best idea since I'm sure that would result in quite a few law suits do to someone following incorrect or incomplete information]
No problem, that idea actually has 4 major multibillion dollar companies competing right now. Lexis/Nexus, Westlaw, RIA Checkpoint and CCH basically TRY to do this but honestly there's no way to make these laws easy.
I'm a professional that uses these legal research tools and I cant even rely on them. I have to basically do all the work because their conclusions are not reliable when ur client is audited.
Tax, law and etc are just weird areas where you cant automate it on a level higher than turbotax. I think it'll always require a person on the other end to do it just cause its such a labor intensive field that is never the same result on a consistent basis.
