Do I charge sales tax to a tax exempt org?

by vabusiness. Posted on Sep 17, 2020    1    10

I run an online IT consulting business in Virginia. One of my clients is a tax exempt college. Do I charge them sales tax for my services?


MarketedPotential 1

You shouldn't charge them sales tax for a service anyway. It's not a tangible product and in VA isn't taxed.

vinthesly 1

I have always chared them tax anyway and they can claim the taxes back themselves, but maybe best to ask them this question directly.

SafetyMan35 3

No. You need to get their tax exempt certificate, but you don't charge tax to tax exempt organizations/...because they are exempt from paying taxes.

Rossim0 1

this guy is correct

  vabusiness 1

Okay, makes sense. Follow up question: will I have to pay taxes for this particular job next year?

SafetyMan35 1

No. You pay the state/county tax you collect. You don't need to pay taxes if they are exempt.

jasdeep_singh_ct 1

For every job you do for this organization, their tax exempt code should be used so you do not have to pay taxes.

I can be a bit cumbersome the first time you try it, so having an accountant's help wouldn't hurt.

  vabusiness 1

Is that supposed to be marked on every invoice? I missed it on the first one.

jasdeep_singh_ct 1

Yes, every invoice. You could also code the customer that is tied to the tax exempt number so all the invoices are organized with that company and thus easy to track.

EnthGuy 5

Probably no, they should have a exemption certificate for you. If they don't provide it then you charge the sales tax.