What is Taxable Sales and Services?

Taxable sales are the amount of sales of tangible goods or services resulting from transactions subject to sales tax. Most states impose taxes on transactions that take place within their limits, and these are known as taxable sales. Each state sets its own sales tax rules, so a sale that is taxable in one state may not be taxable in another. Taxable assets include sales of real estate and most retail products.

Taxable services include a variety of professional functions, such as car repair, car rental, or dry cleaning. Every state in the country maintains its own percentage rates for the taxation of retail sales, meaning that the prices consumers ultimately pay for goods and services vary from state to state. Total sales (also known as gross sales) are the sum of all your sales, regardless of whether you collected sales tax in a transaction or not. Taxable sales (shown as taxed sales in your TaxJar reports) are the total of only transactions where you collected sales tax.

Sales tax is imposed on sales when the transfer of title or possession occurs within tax jurisdiction. Sales tax is generally applied to sales to the end user or to the end consumer. Sales tax is usually added to the sales price and charged to the buyer. If you are organizing a wedding in a facility organized by the wedding party (not on your premises or in a facility organized by you), you will need to collect and remit sales taxes on all beverages (soft drinks, beer, wine, mixed drinks, etc.).

However, in the case of sales that require an exemption document, you must collect sales tax, unless the buyer gives you a duly completed exemption document. Services such as polishing or repairing shoes, repairing appliances, restoring or upholstering furniture, repairing or cleaning jewelry, and caring for dogs are subject to taxes. However, an exemption certificate allows the buyer to make tax-free purchases that would normally be subject to sales tax. If a property or service is tax-exempt for all buyers, the seller is not required to obtain an exemption certificate. If the breakfast in your bed (&) has five or more rooms, you must charge sales tax on the total amount charged. The Sales Tax Institute mailing list provides updates on the latest sales tax news, tips and training. You must collect and remit sales tax on all sales, including rentals, except sales of consumer food outside the facilities where they are sold.

If you are licensed to perform a food service operation in accordance with section 3732.03 of the Ohio Revised Code, you have the right to request an exemption for the purchase of items that are primarily used directly to prepare and preserve food for human consumption for sale (not including items used to display the foods that the consumer selects) and to clean items used to prepare or preserve food for human consumption for sale. For example, if you organize a wedding on your premises, you will have to collect and remit the tax on the sales of food and beverages and on the rental of chairs, tables, crockery, glasses, cutlery, napkins, tablecloths, silk flowers, etc. Massage parlors include any business that offers massage services for a fee but do not include massage services performed by a licensed physical therapist or masseuse. Professional, personal and insurance transactions are not subject to tax when any transfer of tangible personal property is a small item for which no separate charge is made. The term taxable services is defined in section 151.0101 of the Tax Code as including 17 broad categories of services.

Kirk Streets
Kirk Streets

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