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Tax Laws regarding reselling....




Posted by cabweb, 03-20-2002, 06:38 PM
Does anyone know if selling hosting requires charging taxes for the service. Location: Tennessee USA. Regards CAB Last edited by cabweb; 03-21-2002 at 12:11 AM.

Posted by AcuNett, 03-20-2002, 08:39 PM
Tennessee... where do you live? This might help. http://www.knoxcounty.org/clerk/business_tax.asp I'm in Williamson btw.

Posted by Neo3Net, 03-20-2002, 10:24 PM
Well you don't need to charge taxes if your a legit company who files taxes every year. It also depends on state.

Posted by cabweb, 03-20-2002, 11:09 PM
I do file taxes on business earnings. I was concerned because it is tax time. I didn't think that I needed to charge sales tax. Thanks Neo

Posted by 4solutions, 03-20-2002, 11:49 PM
This is an interesting question... I noticed that Rackshack is charging sales tax because most services in Texas are subject to the state sales tax. So if I have a server in Rackshack and I sell hosting accounts on that server, does that mean that I also have to charge sales tax to those customers? Does renting a server in Texas establish a nexus for my company in that state? As far as your specific question, Cabweb, I believe that you will find a possible answer at http://www.state.tn.us/revenue/rulings/sales/97-54.pdf I would definitely call the Tennessee Department of Revenue to clarify the matter. Best of Luck, Keith Last edited by 4solutions; 03-21-2002 at 12:02 AM.

Posted by 4solutions, 03-21-2002, 02:40 AM
To answer an email inquiry: 1) The ruling is on page 5 of the pdf document; paragraphs 4 & 5 relate to web hosting activity. 2) This is a private letter ruling from the Tennessee Department of Revenue. While yes, it technically only applies to the taxpayer who asked the specific question, it clearly gives an indication of how the Dept. of Revenue would rule if the same situation is encountered again. 3) I do not know if the federal law that generally bans taxation of internet activities would supersede this state law. It's a good point, but I do not currently have the time to research it. 4) No, I am not an expert on Tennessee law. I was just trying to help with some quick and dirty research. Kind regards, Keith



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