Updated - January 13, 2002
Basic sales tax rate is 5.125 percent.
Joe LaFace
joe.laface@dfa.state.ar.us
There have been no major changes in the taxation of services since publication of the 1996 Report.
Joe Fitz, California
Board of Equalization
jfitz@boe.ca.gov
Delaware
Essentially, there are no new changes
to the DE section. In 1996 when the Sales Tax Survey was last published,
legislation reducing the gross receipts tax was passed, but not effective until
January 1, 1997. The footnotes from the '96 version mentioned the coming
law change.
Rebecca
Goldsmith
rebecca.goldsmith@state.de.us
There
have been no major changes in the taxation of services since publication of
the 1996 Report.
Christian Weiss
weissc@dor.state.fl.us
There have been no major changes in the taxation of services since publication of the 1996 Report.
James Husted
jhusted@tax.state.id.us
1996
1998
1999
2001
1. The sales and use tax rate was increased to 5.3 percent effective July 1, 2002. The rate is scheduled to decrease to 5.2 percent in July 2004, and 5.0 percent in July 2005.
2. Landscaping services and construction services (labor and other) are exempt if used in new construction or residential remodeling. Previously, only services in new construction were exempt.
3. Professional services in developing custom computer programs is taxable at the full sales tax rate.
Richard Cram
richard_cram@kdor.state.ks.us
Kentucky
Effective Jan 01, KY extended its 6% sales tax to interstate communications
services. Also, in 02 we adopted the uniform language for mobile telecommunications
sourcing to conform with the Federal Telecom Act. Other than these changes,
our state still taxes only minimal services that are explicitly defined under
retail sale in KRS 139.100.
Richard Dobson
Richard.Dobson@mail.state.ky.us
Louisiana
Louisiana changes are as follows:
Item #9 – *Subject to 3% tax 7/1/98 – 6/30/00, 4% tax 7/1/00 –
6/30/04; exempt for periods thereafter.
Item #19 – Automotive Storage is not subject to sales tax (E).
Item #20 – O.K.
Item #23 – Mini storage units are not subject to sales tax (E). Remove
the footnote.
Item #25 – O. K.
Items #30 and #38 – Subject to 3% tax.
Items #32 through #34 – *Subject to 3% tax 7/1/98 – 6/30/00, 4%
tax 7/1/00 – 6/30/02, 3.9% tax 7/1/02 – 6/30/03, and 3.8% tax 7/1/03
– 6/30/04; exempt for periods thereafter.
Items #35 – O. K.
Items #40 through #42 – *Subject to 3% tax 7/1/98 – 6/30/00, 4%
tax 7/1/00 – 6/30/02, 3.9% tax 7/1/02 – 12/31/02, 2% tax 1/1/03
– 6/30/03; exempt for periods thereafter.
Item #43 – *Butane, propane, or other liquefied petroleum gas subject
to 3% tax 7/1/98 – 6/30/00, 4% tax 7/1/00 – 6/30/04; exempt for
periods thereafter.
Item #58 – O. K.
Item #62 – O. K.
Item #72 – O. K.
Items #86 and #90 – O. K.
Item #94 – O. K.
Item #100 – O. K.
Items #108 through #110 – *Subject to 4% tax prior to 7/1/02, 75% of price
subject to 4% tax 7/1/02 – 6/30/03, 50% of price subject to 4% 7/1/03
– 6/30/04, 25% of price subject to 4% tax 7/1/04 – 6/30/05; exempt
for periods thereafter.
Item #114 – O. K.
Item #115 – O. K.
Item #119 – O. K.
Item #121 – O. K.
Item #127 – O. K.
Item #128 – *Subject to 3% tax 7/1/98 – 6/30/00, 4% tax 7/1/00 –
6/30/0; exempt for periods thereafter.
Linda Denney
LDenney@rev.state.la.us
1. Custom computer programming EXEMPTED.
2. Rental of audio tapes, audio equipment, and furniture by establishments like rent-to-own companies became subject to sales tax.
3. Prepaid calling cards and prepaid calling arrangements became taxable at the time of sale.
4. Transmission and distribution of electricity is defined as a taxable service.
Jerome
D. Stanhope
jerome.d.stanhope@maine.gov
In Maryland, there have been only two changes with respect to the taxation of services since 1996 of which I am aware.
The first is that the General Assembly expressly provided that the tax shall apply to delivery services for sales of electricity and natural gas if the underlying sales were subject to tax. The second is that the tax was made applicable to sales of a prepaid telephone calling arrangement (phone cards, mostly).
In both cases, the changes occurred as a result of substituting the sales and use tax for utility gross receipts taxes.
Beyond the foregoing, nothing else.
Stephen Cordi
scordi@comp.state.md.us
Howard
Merkowitz
MERKOWITZ@dor.state.ma.us
There have been no major changes in the taxation of services since publication of the 1996 Report.
Mark P. Haas
haasm@michigan.gov
Updates and clarifications for Minnesota footnotes from the 1996 report are given below. The sales tax rate remains at 6.5%. Note that Minnesota now has 14 jurisdictions (13 cities and one county) with a local general sales and use tax.
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"Pet grooming (except for horses) is taxable." |
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"To the extent allowed under federal law, interstate telephone service is taxable in MN regardless of where service originates." |
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(Eliminate footnotes; waste collection and disposal charges are now out of the sales tax base.) |
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Add to list "...wood, hot water, and steam..." |
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Add: "sports and health club membership dues are taxable." |
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"Detective, security, armored car, and burglar and fire alarm services are taxable." |
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"6.5%" (Installation charges are now taxable whether installation is performed by the seller or a third party.) |
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(Remove footnote; 6.2% additional tax on short-term vehicle rental is deemed for rental of TPP and is not a taxable service. As mentioned, waste services are out of the sales tax base.) |
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MN is one of four states to have enacted the Streamlined Sales Tax Project's definitions (mostly). The project's situsing rules have been adopted. |
Thomas F. Ellerbe
Minnesota Department of Revenue
Tax Research Division
tom.ellerbe@state.mn.us
Missouri
Click here to see MO's changes.
Linda Bushman
linda_bushman@mail.dor.state.mo.us
The telecommunications
excise tax rate is 3.75%. This is a change. The public service commission and
consumer counsel taxes also apply to telecommunications. This is a correction.
The combined rate for the three taxes is 4.06%.
Dan Dodds
Nebraska
These are changes in the sales tax on services from Nebraska. They are
copied from our revenue rulings:
Sales and Use Tax - Mobile Telecommunications Service. CHARGES FOR MOBILE TELECOMMUNICATIONS
SERVICE, INCLUDING WIRELESS PAGING, WIRELESS TWO-WAY RADIO AND ANY OTHER WIRELESS
PERSONAL COMMUNICATIONS SERVICE ARE SUBJECT TO TAX AT THE RATE IMPOSED AT THE
CUSTOMER'S PLACE OF PRIMARY USE.
Neb. Rev. Stat. §77-2706.02 (Laws 2002, LB 947), imposes a tax on charges
for "mobile telecommunications service" beginning August 1, 2002.
The term "mobile telecommunications service" means one-way and two-way
wireless communication service carried on between mobile stations or receivers
and land stations and by mobile stations communicating among themselves. Mobile
telecommunications service includes, but is not limited to, local and intrastate
cellular telephone service, wireless paging service and wireless two-way radio
service.
Although local and intrastate cellular telephone services are currently subject
to sales and use tax, beginning August 1, 2002, the new law provides for the
taxation of these services at the customer's place of primary use which is defined
as the residential street address or the business street address of the customer,
representative of where the customer's use of the service primarily occurs.
Providers of mobile telecommunications services are required to obtain and maintain
a record of the customer's place of primary use. Service providers may rely
on an enhanced zip code for identifying the proper taxing jurisdiction and are
entitled to the hold harmless protections provided by the federal Mobile Telecommunications
Sourcing Act, P.L. 106-252.
The definition of "intrastate" service has also been changed to include
calls which originate and terminate within the same state. Therefore, if the
customer's place of primary use is within Nebraska, services which originate
and terminate within Nebraska and services which originate and terminate in
another state are both subject to Nebraska and applicable local option sales
and use tax. If the customer's place of primary use is outside Nebraska, services
which originate and terminate within Nebraska are not subject to Nebraska or
applicable local option sales and use tax. These provisions bring Nebraska into
compliance with the federal Mobile
Telecommunications Sourcing Act.
Beginning August 1, 2002, charges for wireless paging, wireless two-way radio,
and other wireless personal communications service are subject to tax at the
customer's place of primary use.
Revenue Ruling
1-02-09
Sales and Use Tax - Gross Receipts Defined. EFFECTIVE OCTOBER 1, 2002, THE PROVISIONS
OF LAWS 2002, LB 1085, IMPOSE SALES AND USE TAX ON THE GROSS RECEIPTS OF CERTAIN
SERVICES.
Beginning October 1, 2002, providers of the following services are retailers
and must collect and remit the Nebraska and applicable local option sales and
use tax on the sale of such services:
Building cleaning and maintenance services;
Pest control services;
Security services;
Motor vehicle washing and waxing;
Motor vehicle towing;
Motor vehicle painting;
Computer software training;
Installation and application labor; and
Labor associated with the sale of property by an Option 1 contractor.
Building
cleaning and maintenance services include both interior and exterior cleaning
of commercial and residential buildings, homes, apartments, outbuildings and
agricultural buildings.
Pest control services consist of providing inspection or certification reports,
and identifying, preventing, controlling, neutralizing or
eliminating by use of chemical or mechanical means infestations of pests in
or on buildings, trees, lawns, shrubs and any other property.
Security services consist of consulting and training services on security matters,
protecting property from theft, vandalism and destruction, or protecting individuals
from harm.
Motor vehicle washing and waxing services include the washing, waxing, polishing
and detailing the exterior or interior of a car, van, bus, truck, trailer, tractor
and semitrailer, recreational vehicle and motorcycle. Coin-operated facilities
are included and may commingle the amount of tax in the selling price of the
service.
Motor vehicle towing consists of towing, pulling, or transporting a motor vehicle
and includes pulling or winching a vehicle out of a ditch and uprighting overturned
semi-tractors and trailers or other motor vehicles.
Motor vehicle painting includes painting and refinishing processes on cars,
vans, buses, trucks, trailers, tractors and semitrailers, recreational vehicles
and motorcycles.
Computer software training charges are taxable when paid to the retailer of
the software. The training can be conducted by the retailer of the software
or on its behalf by another person. The charges are taxable regardless of whether
the training is an optional or a mandatory part of the sale, lease, rental or
licensing of computer software, or whether the training is provided at a different
time than the actual sale of the software.
Installation and application labor is subject to tax when associated with property
that is subject to tax. Charges for the installation and application of property
are taxable whether performed by the seller of the property or another person.
Labor performed by an Option 1 contractor is subject to tax and consists of
annexing, fabricating, installing, applying, and repairing building materials
and fixtures annexed to real estate.
Dave Dearmon
ddearmon@rev.state.ne.us
Here is a NJ update to the 96 survey:
Richard Kaluzny
rkaluzny@tax.state.nj.us
New
York
1996
Data Entry services exempted (9/1/96)
Municipal parking service exempted (12/1/96)
1997
Internet access services exempted (2/1/97)
Coin-operated car wash services exempted (12/1/97)
Clarification of exemption of Web design service (6/97)
Art Friedson
Arthur_Friedson@tax.state.ny.us
The state general sales tax rate applicable to goods and select services increased from 4% to 4.5% for the period October 16, 2001 through June 30, 2003. Effective July 1, 2003, the state general rate will decrease to 4%. (The 1996 Update used the 4% rate.) A local levy of 2%, 2.5%, or 3% depending upon location is added to the basic state rate for transactions subject to the state general rate. (The 1996 Update used the 2% rate.)
In addition to the above rate changes, significant changes have been made regarding the taxation of telecommunications, direct-to-home satellite service, and piped natural gas since the 1996 Update. Effective January 1, 2002, all telecommunications services became subject to a 6% state sales tax. No local taxes apply.
Telecommunications services subject to 6% rate include:
- Receipts from local, intrastate, interstate, toll, private, and mobile telecommunications service.
- Charges for directory assistance, directory listing that is not yellow-page classified listing, call forwarding, call waiting, 3-way calling, caller ID, and other similar services.
- Customer access line charges billed to subscribers for access to the intrastate or interstate interexchange network.
- Charges billed to a pay telephone provider who uses the telecommunications service to provide pay telephone service.
The sale or recharge of prepaid telephone calling arrangements is taxable at the general rate of tax. Local taxes apply.
Also effective January 1, 2002, gross receipts of direct-to-home satellite service became subject to a 5% state sales tax rate. No local taxes apply.
Effective July 1, 1999, gross receipts of piped natural gas became subject to the piped natural gas excise tax and were no longer included in the sales tax base.
Please refer to the documents Changes for North Carolina – Appendix A Survey Results. The changes outlined above along with other explanatory information pertinent to recent law changes have been incorporated into both the original survey charts and footnotes for North Carolina that were published in the 1996 Update.
Karl Knapp
<karl.knapp@ncmail.net>
North
Dakota
In North Dakota, the only change to the taxation of services since 1996 is the
imposition of a sales tax on short-term auto rentals, which was enacted by the
2001 legislature. Car rentals are now subject to the 5% state sales tax
rate and a 3% surcharge which the rental companies can "use" to reimburse
themselves for the motor vehicle excise tax (sales tax) paid on the purchase
of new vehicles for the fleet. If the total of the 3% surcharge for the
year exceeds the payment of excise tax on new vehicles, the excess must be remitted
to the state. For purposes of your study update, you can list it as a
rate of 8% on short-term auto rentals.
Kathryn
Strombeck
kstrombeck@state.nd.us
1. Prepaid calling cards and prepaid calling arrangements became taxable at the time of sale, effective March 30, 1999.
2. An exclusion is provided from taxable telecommunications services for coin-operated telephone services, effective September 2001.
3. Certain other changes were made to accommodate the deregulation of certain public utilities.
Mike
Sobul
michael_sobul@tax.state.oh.us
There have been no major changes in the taxation of services since publication of the 1996 Report.
Mike Pillow
mpillow@oktax.state.ok.us
Effective July 1, 1997, computer services (including custom software) were exempted from sales and use tax in Pennsylvania. Canned software remains subject to tax.
Brenda Stoner
bstoner@state.pa.us
Texas
Since 1996, Texas has enacted two limited reductions in sales taxability of
services:
1- Exemption of
the first $25 of a monthly charge for internet services;
2- Exemption of 20% of the taxable charges for information services and data
processing.
There was also a technical change in sourcing mobile telecommunications services
upon the location where the customer's use primarily occurs.
James LeBas
james.lebas@cpa.state.tx.us
Doug MacDonald
dmacdonald@utah.gov
In general, there have been no fundamental changes to Washington's policy in this regard. Major categories of personal and professional services are not subject to retail sales tax, but the providers of these services are taxable under the state's gross receipts business tax at a rate of 1.5%. This applies to services such as barber/beauty services, legal services, accounting services, medical services, etc. However, we do apply retail sales tax to most repair services, labor charges associated with construction, and several recreational services such as golf and bowling.
We did adopt legislation this year which specifically makes use tax applicable to the following items or activities: (1) repair of tangible personal property performed outside the state on items used within the state; (2) delivery charges (sales tax already applied to these); and (3) direct-mail circulars that are printed outside the state but distributed to Washington residents.
Don
Taylor
dont@dor.wa.gov
1. Telephone answering services and other custom calling services (caller ID, call waiting, etc.) are taxable.
2. Electricity and fuels used in farming are exempt.
3. Other services: cable television services and installation are taxable; repair, servicing, towing, cleaning, painting, coating, inspection and maintenance of other tangible personal property is taxable if the sale of the tangible personal property is taxable; and producing, fabricating, printing or imprinting tangible personal property for consumers who furnish the materials is taxable except for printing or imprinting tangible personal property to be used for advertising purposes outside Wisconsin.
Blair Kruger
bkruger@dor.state.wi.us
There has been
no major changes in the sales taxation of services in West Virginia since 1996.
However, a few minor changes were enacted including the following:
Roger Cox
RCox@tax.state.wv.us