When to Charge Sales Tax on Services: Navigating State-Specific Rules and Exceptions

• Products are generally taxable, while services are typically non-taxable.
• Exceptions exist as each of the 46 US states with sales tax has its own rules.
• States are expanding tax bases, sometimes including services that were previously non-taxable.
• The digital world complicates the distinction between products and services.
• Services are categorized into business, personal, professional, and maintenance and repair services.
• Five states do not impose general sales tax on goods and services.
• Four states tax services by default, with exceptions for exempted services.
• The remaining states and DC do not tax services by default, but some services may be taxed.
• Businesses must understand state-specific rules for their products or services.
• Staying informed on sales tax changes is crucial for compliance.

Source: taxjar.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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