alecs0: How are taxes decided if offices of a company reside in multiple states.?
For example company A has offices in many states, they request services from a small company B in state zzz. How are taxes calculated on the invoice?
Are they done based on company’s zzz location, or on the state in which Company A has requested the service on, or Company A chooses from which branch to pay from, to get the cheapest Tax rates ?
If anybody has any useful info, please assist.
Answers and Views:
Answer by KM
I believe you pay taxes according to the state you are buying something from
If the company you are buying from has an office in the state he is shipping to than you must pay sales tax, if not than you are suppose to pay use tax in most states. If you have a resale number give it to Company B than you don’t have to worry about it. Check with your accountant to make sure this is the same in your state, but we do business in all states and only charge where we have employees or our office. Good luck.Answer by Mark S
If you are talking about Sales Tax, they are on intra-state transactions only.
For example: Company A has offices in MA, RI and CT.
Company B is in RI only.
If Company A purchases something from Company B over telephone and had it shipped to MA address, there is no sales tax to RI, but Company A must pay MA Use Tax.
If Company A purchases something at Company B for use in RI office, RI Sales tax applies.
There are more complicated issues that can come into play like Nexus that could change this, but this is the general idea.Answer by wartz
Income is apportioned to the state where the company earns it and taxed accordingly.Answer by StephenWeinstein
Only humans pay taxes based on where one resides. Corporate taxes are based on where the service is provided.