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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7320
Experience:  15years with H & R Block. Divisional leader, Instructor
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I have a client that contracts for their customers throughout

Resolved Question:

I have a client that contracts for their customers throughout the country to provide classrooms and training facilities for the customers employees for classes. My client only owns one location in the state of Georgia. They rent all other facilities from other companies outside of Georgia in various states to provide rooms for businesses needing training facilities. Some of these companies charge my client sales taxes even though we are out of state. Should they be charging these taxes and should my client be charging their customers sales taxes for these facilities?
Submitted: 3 years ago.
Category: Tax
Expert:  Robin D. replied 3 years ago.

Robin D :

Hello and thank you for using Just Answer

Robin D :

Many states do require a sales tax on rental and services. Since each state is different if you could advise on one of the states in question I could look at their specific requirements.

Customer :

We are in Georgia. We have a customer that wants to rent a room in say - Michigan. We do not have a facility in Michigan so we rent a facitlity from a local provider. After the class is over, the local provider charges us a Michigan sales tax. Should they charge us for a sales tax and subsequently us charge our customer for MI sales tax?

Robin D :

One moment please while I access Mich sales tax

Robin D :

Yes, according to Michigan sales tax the provider of the rental facility would charge the tax to your client. Your client could pass this along to the end client to recoup the charge or use it as an expense against taxes.

Robin D :

Your client is not required to obtain a sales tax license nor are they required to collect and remit for Michigan

Customer :

Would we need to go through this same process with you for every state or is it applicable fairly much across the country except for states with no sales tax?

Robin D :

I would estimate that the same would hold true for all states that your client does not actively have a business presence in. In other words, if your client is only renting a facility in a state other than GA then they are going to use the Mich info to account for the sales tax.

Customer :

Thanks Robin - this has been a big help.

Robin D :

Good, you can always come back even after you click on ACCEPT. Best wishes

Customer :

Okay - thank you.

Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7320
Experience: 15years with H & R Block. Divisional leader, Instructor
Robin D. and 6 other Tax Specialists are ready to help you

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