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TexLaw, Attorney
Category: Legal
Satisfied Customers: 4430
Experience:  Lead trial/International commercial attorney licensed 11 yrs
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We are a Germany based limousine service provider. We offer

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We are a Germany based limousine service provider. We offer that service worldwide, also US. Once a customer has booked a trip (servers are in Germany), we commission a US limousine service provider with the service. But only we bill the end customer - so our question: do we have to pay sales tax as Germany based principal in following states: Missouri, Ohio, Florida, New York, Arizona, Maryland and California

Thank you for your question.

Because there is a service being offered through the drivers you hire which take place on the ground in these states, and you are collecting payment, you will be required to register and collect sales tax, regardless of the fact that you are based out of Germany.

The information I've located indicates that limousine services are subject to sales and use tax in each of the states you have cited.

Please let me know if you have any further questions. Please also kindly consider rating my answer positively so that I am compensated by the website for my work on your question. Rating positively does not cause an additional charge and does not prevent us from further discussing your questions.

Best Regards,
Customer: replied 3 years ago.

Dear Sir,


thanks a lot. May I ask, what is the legal argumentation behind the fact, that the German company has to collect sales taxes even though the US company serves the end customer? Has that anything to do with the "nexus" or what is the reason? Because the German company bills the customer in the end?


kind regards

Your company is arranging the transport which takes place in the state and then charging for it. When the service is actually provided in the state, it does not matter that the payment is being processed by a foreign entity, sales tax is due on the service.

This is different from the sale of a good. Where there is a sale of a good by an out of state seller which has no physical presence in the state, there is no nexus on which to base the sales tax.

Here, there is a nexus in that the actual service for which you are charging is being provided in the state. It does not matter that you are hiring a third party to provide the service. You are charging the customer for a service provided in the state, and it is the tax on that transaction in connection with that service which provides the nexus for the sales tax.
TexLaw and 3 other Legal Specialists are ready to help you
Customer: replied 3 years ago.
thank u so much. So in my understanding the nexus principle also applies for a case like that in which an outside Usa based entity is doing Business in a state. Can that vary from state to state or is it a General principle?
It is a general principle, but it does in fact vary state to state as to the exact application of the general principle.

Thank you for the rating and please let me know if there is anything further I can do for you.

Customer: replied 3 years ago.

Hi Thanks a lot. So in the states I named it is taxable for the Germany company?


2nd question: Could you do another recherche regarding that issue (other states I still name )over the weekend till sunday or monday, if I pay you additionaly?

I'd be happy to. Let me know what further states you need researched on this regard.


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