Sales Taxation of Services:

2007 Update: [see note below]

By The Numbers Newsletter Article [July 2008]

Summary Table - Number of Services Taxed by State & Category

Actual Survey Data - 2007 [xls - spreadsheet, 572k] [revised March 2010]

2004 Update: [see note below]

Tax Administrators New Article [May 2005]

Actual Survey Data - 2004 Survey [xls - spreadsheet, 556k]




This report was organized based on the best classification codes available for use at the time the survey was designed. There are shortcomings in using these NAICS codes, however. A solid understanding of how these codes work will help you get the clearest picture of what is -- and what is not -- taxed within a state.

NAICS codes classify types of businesses. They do not classify types of goods or services being sold. For example, gas stations are not the same as sales of motor fuel.

This survey therefore does not specifically identify the services that are taxed in the participating states. Rather, this survey identifies categories of businesses that might provide one or more services that are taxed.

Just because a business category is identified as taxable does not mean that every good or service related to that business is being taxed. Likewise, a single taxed good or service might be reflected under several business categories.

The footnotes are important and will enhance your understanding of what is, or is not, taxable. FTA is planning to re-craft this survey in ways that will allow us to present far more information.

In the meantime, however, we ask that you recognize that a researcher cannot simply count the number of "taxable" checkmarks under a state and develop an informed impression of a state's taxation of services. You will find that revenue earned by a particular business category is not equivalent to the revenue generated by the sale of any particular service. A state may tax a business category in a small, limited way (affecting one or two services), or in a large, broad way (affecting many services).