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Posted by Misfit on May 17, 2008, 3:21 pm
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>
>
> > On May 2, 1:19 pm, se...@panix.com (Seth) wrote:
>
> > > In article
>
> > > >A colleague has queried me about providing a service for a Not For
> > > >Profit organization and has claimed the invoice I send need not
> > > >include tax fees. As it is a good cause, I'd like to help. I wish to
> > > >charge him much less than my normal fee. If I charge 1K for services,
> > > >do I need to pay tax on those earnings?
>
> > > You need to pay income tax on all your earnings.
>
> > > In some states, sales of services are subject to sales tax.
>
> > > In some states, certain non-profit organizations (e.g. 501(c)(3)) are
> > > exempt from paying sales tax on their purchases.
>
> > > Seth
>
> > Thanks. I appreciate the feedback.
>
> Misfit, just be sure you get a certificate from the organization
> documenting that it is eligible to purchase your services without
> sales or use tax (an exemption certificate). Otherwise you generally
> must assume that the sale is taxable, and you will be responsible for
> paying the tax to the state whether or not you have collected
> reimbursement from the organization.
>
> Katie in San Diego
Wonderful. I have asked for the documentation. His legal provider is
supposed to produce the certificate this week. Thanks very much for
all the assistance.
M.
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