Question about invoicing for US agency owners:
I’m preparing invoices for my initial permanent placements, but I’m a bit confused about sales tax.
As a New York City-based agency billing a client in Virginia, what taxes (if any) should I include on the invoice?
RCadmin
When invoicing for services like perm placements, the general rule is that sales tax does not apply to services in many states, including New York and Virginia. However, some specifics should be considered:
New York City (NYC) Rules: In NYC, services are generally not subject to sales tax. Since you are providing a service (recruiting/placement) and not selling tangible goods, you typically do not need to add sales tax on your invoices.
Client Location Matters: Since your client is located in Virginia, you need to be aware of Virginia’s tax laws as well. Generally, Virginia does not impose a sales tax on services rendered, including recruitment services. Therefore, you likely do not need to charge sales tax on the invoice.
Nexus Considerations: While you may not need to charge sales tax for these placements, consider whether your business has a physical presence (nexus) in Virginia. If you were to establish a physical location in Virginia or if you regularly conduct business there, tax obligations could change.
Consult a Tax Professional: Tax situations can be complex and vary by specific circumstances. It may be beneficial to consult with a tax professional or accountant familiar with inter-state taxation to ensure compliance and get advice tailored to your situation.
In summary, it’s likely you don’t need to add sales tax to your invoices for perm placements from NYC to Virginia, but double-checking with a tax professional can provide peace of mind.