How will a move to PA affect our tax situation?
April 29, 2008 9:45 AM Subscribe
What are the sales (and other) tax implications of moving an advertising agency / creative services company from Delaware to Pennsylvania?
We're looking for new office space and have found what looks to be a perfect place in PA. But does that mean we'll have to start charging all our clients sales tax on our services? Are there any other tax related things we should worry about?
Here's basically what we do:
* Design services (be it logos, websites, posters, mailers, online banners, email, stuff like that...)
* Copywriting.
* Video services (promotional movies, ad spots, wedding videos, event recording, etc) Now we normally provide the DVDs to a business, which then sells them. We don't really sell DVDs directly to consumers.
* Photography portraits.
Any help would be greatly appreciated. I did some online research and it looks like (to me, the language is dense on the PA tax code site) that agencies are mostly just taxed when they provide physical goods... so for instance on the markup of a ton of postcards printed, but not on the design of those postcards. But I wanted to be more sure.
We're looking for new office space and have found what looks to be a perfect place in PA. But does that mean we'll have to start charging all our clients sales tax on our services? Are there any other tax related things we should worry about?
Here's basically what we do:
* Design services (be it logos, websites, posters, mailers, online banners, email, stuff like that...)
* Copywriting.
* Video services (promotional movies, ad spots, wedding videos, event recording, etc) Now we normally provide the DVDs to a business, which then sells them. We don't really sell DVDs directly to consumers.
* Photography portraits.
Any help would be greatly appreciated. I did some online research and it looks like (to me, the language is dense on the PA tax code site) that agencies are mostly just taxed when they provide physical goods... so for instance on the markup of a ton of postcards printed, but not on the design of those postcards. But I wanted to be more sure.
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I'm not sure about PA, and every state is different. In NJ if you go to the deli and have them make you a sandwhich, it is taxed, but you do not pay tax if you buy bread, salami, mustard, and cheese. In maryland you pay tax on just about everthing.
Most business do not pay tax on things that will be resold, or used to promote the business, whether it is goods or services, as long as they have a valid tax ID #.
if you are in doubt, simply charge tax, it is up to the customer to provide documentation of their exempt status.
posted by Mr_Chips at 12:43 PM on April 29, 2008