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Ask Dr. Fiona Chen Your Own Question
Dr. Fiona Chen
Dr. Fiona Chen, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 482
Experience:  Former IRS Revenue Agent
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I do have some questions, I have several questions related

Customer Question

i do have some questions
JA: The Accountant will know how to help. Please tell me more, so we can help you best.
Customer: I have several questions related to sales tax requirements for services rendered.
JA: Is there anything else the Accountant should be aware of?
Customer: 1. I am a freelance resume and career documents writer and career coach. 2. I am an independent self employed contractor who lives in PA. 3. I offer services to clients from all different states. 4. I email finished work, no physical work delivered. 5. I work virtually - my office is just my computer and cell phone and I travel frequently and work from the road
Submitted: 1 year ago.
Category: Tax
Expert:  Dr. Fiona Chen replied 1 year ago.

Dear Customer,

Most states do not charge sales tax for services. Have you run into any state would like to have you withhold sales tax on your services?

Please kindly follow up.


Fiona Chen, MPA, Ph.D. CPA, ABV, CFF, CITP

Expert:  Dr. Fiona Chen replied 1 year ago.

Dear Customer,

1) Here are website links for the state and localities of some items for service sales tax in PA state and local for us to start the discussion.

Among them, the editing services could be close to your category of services. Because you locate in PA, you need to collect sales for PA if you verify that part of your category of services falls into the tax category. Please also verify the county you live in and the counties of PA you provide services in and their regulations.

2) For another example, the State of CT tax consulting services. Then, your career coach services provided to that state may be subject to the collection of sales tax. See

3) Sales tax on services is a new way for the taxation authorities to broaden the scope of their tax bases. Every taxation authority has its own regulation on who and what services are subject to tax.

4) It is suggested here that for each state you provide services to, at least once a year, verify the new rules and regulations and document your result.

6) There are sales tax software programs. If you subscribe to one or purchase one, then supposedly, the software can update the rules and regulation for you and submit on line your sales tax reports to various states and localities. Once you are used to it, you simply add it to your invoice and make it one line-item. Your customers at the taxation state are used to be collected for such taxes.

So called "sales tax on services", by definition, should not require physical equipment or work product.

If you frequently travel on the road, you need to carefully keep record of your whereabouts. The state you travel to may literally count the days of your presence in their states to determine whether you should have collected the sales tax for them. Traveling exhibitors have such historical issues in their industry. One state may give exemption for presence in their state for one day. Then, the presence of more than one day makes your business being required to collect sales tax and pay over to that state. For example, Arizona has a threshold of two days of presence, "An employee present in the state for more than 2 days per year".

Please feel free to follow up.



Customer: replied 1 year ago.
Thanks for your response. Yes, I am aware that most states don't charge sales tax on services, but does Pennsylvania? And is it about where my primary residence is as an self-employed independent contractor or is it about what states my clients reside in? I found some material that indicated the resume writing services are taxable in PA but I do not provide a physical document but instead a emailed document. Most of my services are sold through website or through referrals from listings with industry associations. Oh I see you sent a second response - will review now.
Customer: replied 1 year ago.
Thank you I will use those links and process that advice. Will I be able to type you back for clarification on this issue as I research ?
Expert:  Dr. Fiona Chen replied 1 year ago.

Dear Customer,

Of course. Please feel free to follow up. The general rule is our presence. It is always a yes to tax our physical location. Then, our client's state is depending on their state's regulation. As long as we are providing services, it is a business. The form of the business is irrelevant to the taxation authorities. We have to collect sales tax even if we use our own names as the business entity name.

Allow me to give you links for software, too. I have no interest in them. However, reading their description may help us understand the status of this issue and the technology help we may get. You may also want to retain tax professionals to help.