Taxes on Engineering Fees

[OHIOMatt]

The current governor of Ohio is proposing a "sales" tax on professional services. Do any other states or countries apply a tax like this. To me it seems like double taxation. We pay taxes on the profits (hopefully we have some), and on our wages. It seems that this may be setting us up for competitive disadvantages with firms based in other states.

 

[zdas04]

New Mexico has had that law for decades (professional services collected at local sales tax levels, so the rate of sales tax is based on your community and county). It only applies to work done within the state (work outside the state or country is exempt, you have to report it to the state, but then you repeat the number in the "exemption" column). It is intended to be collected from the consumer not the producer. So when I do work within the state, my invoice includes 7.125% tax. Then at the end of the month I pay the state exactly the collected amount--revenue neutral to me.

Biggest pain is that in the last 5 years, I've collected tax in three months, but I have to file a zero balance report every single month.

David Simpson, PE
MuleShoe Engineering

"Belief" is the acceptance of an hypotheses in the absence of data.
"Prejudice" is having an opinion not supported by the preponderance of the data.
"Knowledge" is only found through the accumulation and analysis of data.

 

[msquared48]

Washington no..


Mike McCann
MMC Engineering

http://mmcengineering.tripod.com

 

[MiketheEngineer]

MO is a NO -- no service is taxed but I have heard about in a few states. I have rented a few tools here and they try to tax me - and I refuse since it is service. They back down - but how many people don't??

 

[hokie66]

Since you asked about other countries, in Australia the 10% GST (Goods and Services Tax) applies to engineering services.

 

[Ron]

Florida tried it about 25 years ago. Didnt' work. No services tax at this point. I'm sure it will be revisited.

 

[berkshire]

New Jersey Used to have a tax on labor,
B.E.

 

[OHIOMatt]

Thanks for the replies. This just seems like another layer of compliance and compliance takes time and money.

 

[KENAT]

I believe VAT in the UK is applied to most types of services.

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