Fellow CPAs-Stop telling clients that servcies are not taxable

By March 1, 2011 Retail, Tax Audit

During the past month I’ve been amazed at how many people I’ve talked with who have been advised by their CPA that “services are not taxable” so don’t worry about charging tax.  This statement has been provided without any research or thought as to what the company may be doing.  Especially when we are dealing with multistate services.  True, Georgia does not tax a lot of services that other states do, but they certainly tax a wide variety of transportation, amusement, and entertainment services that could include what your clients do.

Each state taxes different services.  Texas, for example, taxes a wide variety of real property services including certain remodeling services.  I’m trying to help unwind a mess that a company has because their Georgia CPA made a blanket statement that services were not taxable and there was nothing for them to worry about.  They later stated that they really never looked at the Texas rules, they just assumed that everyone was like Georgia.

If you are a CPA please take some time to carefully evaluate what your client’s do before you jump to the conclusion that the services they provide are not taxable.  Many states tax lots of services–New York, New Jersey, Florida, Texas, Pennsylvania, Washington DC, Washington, Ohio, Connecticut, and many more.

Ned Lenhart
Taxation of Services