Paying Taxes on CAD Drawings?
Paying Taxes on CAD Drawings?
(OP)
I was told that I have to pay taxes on CAD drawings that my firm produces. Does that sound right?
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Paying Taxes on CAD Drawings?
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RE: Paying Taxes on CAD Drawings?
RE: Paying Taxes on CAD Drawings?
It can get ugly if you "have a presence" in several states. In that case you have to collect the local tax in the states that you have an office on the work done for clients in that state. In the case of multiple offices in multiple states/counties, you'd better already have an accountant and you shouldn't be asking a bunch of engineers.
Once you collect the sales tax, you then have to remit it to the state monthly or someone goes to jail. States are really cranky about that.
Another thing they are cranky about is they want their tax whether you collected it or not. If you fail to collect it, you are still liable for it. It can get complex to determine if the $100 check you got is actually a taxable $100 or $93.45 plus $6.55 tax. In the first case you owe the state $7.00 (if the tax is 7% like it is here) in the second you owe $6.55. You can decide how you want to do it, but then you must do it consistently from then on.
I just finished my 2007 taxes and found that the 1099's that I got from companies that I charged sales tax had included the tax amount in the total reported to the IRS. This just means that you have to make sure that you claim the sales tax submitted to the state as a legitimate business expense. It felt really odd to deduct a passthru expense, but that is the way it works.
David Simpson, PE
MuleShoe Engineering
www.muleshoe-eng.com
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RE: Paying Taxes on CAD Drawings?
If you do have to pay sales tax on your CADD drawings, then you would also have to do the same on your calculation sets.
The way to get around this is to not charge for the calcs or drawings, but have a set number of sets of drawings and calculations paid for within the bid price. Anything beyond this can be sent out of house to print electronically, and the owner can pay the bill there.
Mike McCann
MMC Engineering
RE: Paying Taxes on CAD Drawings?
RE: Paying Taxes on CAD Drawings?
So what happens if you e-mail it and they print it out on their own paper????
RE: Paying Taxes on CAD Drawings?
Dan - Owner

http://www.Hi-TecDesigns.com
RE: Paying Taxes on CAD Drawings?
If I charge for CAD drawings, this is tyoically for the labor to prepare the files and perhaps some consumables like a CD and packaging, plus the cost of postage - all instruments of service, and only the net income is taxes. Again, no sales tax.
Don Phillips
http://worthingtonengineering.com
RE: Paying Taxes on CAD Drawings?
David
RE: Paying Taxes on CAD Drawings?