Invoicing Inquiry for US Agency Owners
I’m sending out invoices for my first permanent placements and need some clarity on sales tax.
As a New York City-based business invoicing a client in Virginia, what sales tax, if any, should I include on the invoice? Thank you!
RCadmin
As a NYC-based agency invoicing a client in Virginia, you generally do not need to charge sales tax on your service of placing employees, as employment services are typically exempt from sales tax in both New York and Virginia. However, there are a few important points to consider:
Service Type: Since you’re providing a placement service and not selling physical goods, this usually qualifies for exemption from sales tax in many jurisdictions. Always double-check if your specific services might fall under different tax rules.
Client Type: If your client is a business and they are utilizing your services for a business purpose, that might strengthen your case for not needing to charge sales tax.
Consult a Tax Professional: Tax laws can be complex and subject to change, so it’s advisable to consult with a tax professional or accountant who is familiar with the laws in both New York and Virginia for the most accurate guidance.
Keeping Records: Maintain good records of your transactions, including invoices, in case there are any future inquiries about tax compliance.
In summary, you likely won’t need to add sales tax to your invoice, but it is always best to confirm with a tax expert to ensure you’re compliant with all relevant laws.