Q: Hello, I reside in Georgia and do social media for clients in Connecticut. Do I need to charge sales tax?
Social media consists of posting graphics on Facebook and Instagram.
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A:
In general, if you are providing a service (like social media management) to clients in another state, you typically do not need to charge sales tax. This is because most states only require businesses to collect sales tax if they have a physical presence or "nexus" in that state.
However, there are a few important considerations:
1. Some states have enacted "economic nexus" laws that require businesses to collect sales tax if they make a certain amount of sales or transactions in the state, even without a physical presence. Connecticut does not appear to have such a law that would apply to your situation.
2. The service you provide (social media management) is generally not considered a taxable service in Connecticut. Connecticut mainly taxes tangible personal property and certain enumerated services, which do not include social media services.
3. If any part of your service involves the transfer of tangible property (like sending physical promotional materials), that portion may be subject to sales tax.
It's always best to consult with a tax professional or contact the Connecticut Department of Revenue Services for the most up-to-date and accurate information specific to your business. Keep in mind that tax laws can change over time, so it's important to stay informed and review your tax obligations regularly.
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