Freelance Graphic and Web Design Tax?

Should I charge Washington state sales tax for computer programming,web design?

• I am currently living in Washington state and had a question regarding sales tax on services. I am a computer programmer & web designer and need to know if I should be charging my Washington state customers the state & local sales taxes. A few other designers in town are charging the sales tax. Is it pretty standard to charge sales tax for these type of services? Of is it more of a CYA move?

• Answer:

  Hi atherix, In my nonprofessional opinion, you need not charge your customers sales tax. Sales tax is to be charged on the "selling price of tangible personal property and certain services purchased at retail, i.e. by consumers." Source: http://dor.wa.gov/docs/reports/2005/Tax_Reference_2005/04sales.pdf Section 82.04.050 of the Revised Code of Washington (RCW) spells out what transactions are considered retail sales and therefore subject to the tax. Paragraph (6) says: "The term shall also include the sale of prewritten computer software other than a sale to a person who presents a resale certificate under RCW 82.04.470, regardless of the method of delivery to the end user, but shall not include custom software or the customization of prewritten computer software." Source: http://apps.leg.wa.gov/RCW/default.aspx?cite=82.04.050 "The term" here refers to "the term 'sale at retail' or 'retail sale'" in paragraph (3). So assuming you are providing custom software or the customization of prewritten software, your services are not subject to sales tax. (Of course, if you sell, say, Windows XP in a retail box, that is another story.) The chapter of the RCW that deals with retail sales tax is chapter 82.08. Paragraph (6) of section 82.08.010 on Definitions refers to chapter 82.04, cited above, for the definitions of "sale at retail" and "retail sale." I can't give you an opinion on local sales tax without knowing the locality involved, but I think it is unlikely to be applied in a way that is inconsistent with the state sales tax. Additional Links Washington State Department of Revenue Tax Reference Manual 2005 http://dor.wa.gov/content/statistics/2005/Tax_Reference_2005/default.aspx The section of this Tax Reference Manual on retail sales tax lists "customized computer software" under "EXAMPLES OF EXEMPTIONS - OTHER ITEMS," meaning it is not taxable. http://dor.wa.gov/docs/reports/2005/Tax_Reference_2005/04sales.pdf The Department of Revenue's main page on the Retail Sales Tax has a list of services that are taxable. None of them looks similar to what you do. http://dor.wa.gov/content/taxes/sales/ Important Disclaimer Google Answers does not provide professional legal or tax advice. I hope this is a satisfactory answer to your question. If you need any further information about this, please ask for a clarification. --efn