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Sound Reinforcement - Forums for Live Sound Professionals - Your Displayed Name Must Be Your Real Full Name To Post In The Live Sound Forums => LAB: The Classic Live Audio Board => Topic started by: scottstephens on March 16, 2016, 10:12:21 am

Title: Does anybody line item a B&O tax or city income tax?
Post by: scottstephens on March 16, 2016, 10:12:21 am
Hi guys,
    I think the subject line pretty much states the question. A local city now charges a fee for the "privilege" of doing business in the city. So, do you all just build it in the price or state it as a fee?
    Thanks. Have a good one.
scott
Title: Re: Does anybody line item a B&O tax or city income tax?
Post by: Riley Casey on March 16, 2016, 11:24:42 am
We line item sales taxes and if the tax in question is a percentage of that particualar billing then I'd do the same.  If it's simply a tax on your net income and not directly relatable to an individual event billing then probably not.

Hi guys,
    I think the subject line pretty much states the question. A local city now charges a fee for the "privilege" of doing business in the city. So, do you all just build it in the price or state it as a fee?
    Thanks. Have a good one.
scott
Title: Re: Does anybody line item a B&O tax or city income tax?
Post by: Rob Spence on March 16, 2016, 11:48:16 am
What does B&O stand for? Baltimore & Ohio?


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Title: Re: Does anybody line item a B&O tax or city income tax?
Post by: Keith Broughton on March 16, 2016, 12:11:50 pm
Hi guys,
    I think the subject line pretty much states the question. A local city now charges a fee for the "privilege" of doing business in the city. So, do you all just build it in the price or state it as a fee?
    Thanks. Have a good one.
scott
Any tax or fee outside of the production cost is a line item.
This way the client sees where the actual costs are.
Also, in some cases, the tax might be deductable for the client.
Title: Re: Does anybody line item a B&O tax or city income tax?
Post by: Brian Jojade on March 16, 2016, 01:27:58 pm
There isn't a blanket rule that works everywhere for taxes.  As a general rule, however, you can list sales tax as a line item. I don't know of anywhere in the US that doesn't allow that.  As far as other charges, that varies by jurisdiction.  Sometimes you can add that on, other times, no, you can't.

What you need to be careful of is having too many 'add on' charges on your invoice that will upset the customer. Sales tax is something they expect, so I suggest adding that on to the total.  Other taxes or charges, not so much, so tread with caution.
Title: Re: Does anybody line item a B&O tax or city income tax?
Post by: Ray Aberle on March 16, 2016, 02:15:47 pm
B&O is (typically) "Business & Occupation Tax," something that you would pay a jurisdiction (here, it's the State of Washington) for doing business in Washington. Services I deliver to out of state (like Oregon, a hop and a skip away), or products sold and shipped out of state, are not charged the B&O tax.

As for the OP, if this is a charge per event (or as Riley said, a percentage of the event billing) I could see passing that along to the client. Like, a special event permit, or an income tax on your revenue for the show. But, if it's a one time city business license fee, then no-- CODB, and now you have it settled for future shows in that city.

-Ray
Title: Re: Does anybody line item a B&O tax or city income tax?
Post by: Don T. Williams on March 16, 2016, 08:02:29 pm
You should be careful if you are providing services to another state.  In some states services are taxable, and in other states they are not.  Line item is the way to go.  The customer may point out that services are not taxable or that they are exempt to them. 

In my state, services (but not merchandise sales) are taxable to normally tax exempt organizations.  When I rent or provide event services to churches, a local entity, or the state government here, it is still taxable.  Just because an organization claims to be exempt, they may not be exempt!

I have heard of taxation departments from states (other than your home state) coming after "out of state providers" and collecting taxes and adding penalties for not collecting and paying taxes for services you may have provided in their state.
Title: Re: Does anybody line item a B&O tax or city income tax?
Post by: Ray Aberle on March 16, 2016, 09:36:59 pm
Fortunately, there are no general sales taxes collected for merchandise sales or services provided in Oregon.

In Washington, there are tax exempt organizations (501(c)(3) and the like) that are exempt from federal income tax on their revenues, but that doesn't make them exempt from Washington State Sales Tax for taxable purchases. Likewise, as a business, even if I purchase something tax free, I am still obligated to pay the 6.5% state Use Tax on the purchase. (As is *anyone* who brings non-taxed-at-the-point-of-sale merchandise in from out of state, people who order online, etc etc. Just because tax isn't collected on a purchase when you buy it doesn't mean tax isn't owed on the purchase.)

I hear you about the risks of out-of-state revenue agents, though, and it is certainly our duty to be knowledgeable about and collect all applicable taxes for our services.

-Ray
Title: Re: Does anybody line item a B&O tax or city income tax?
Post by: Craig Hauber on March 16, 2016, 11:18:55 pm
Hi guys,
    I think the subject line pretty much states the question. A local city now charges a fee for the "privilege" of doing business in the city. So, do you all just build it in the price or state it as a fee?
    Thanks. Have a good one.
scott
If it's a fee or tax you would not otherwise have if you were not providing services to that client then they get it added as a definite item on the invoice.

If it not a "double-dip" in that the fee/tax is the same as what you pay on your home turf -and you get to exempt that gig from your assessment in your home region then there's no mention of it.

If it happens frequently with multiple clients my rates are just increased for all (and I go "nasty" on competition whom I know are operating in the same area without paying the required fees/taxes/licenses.)

Same goes for above-the-normal insurance or bonding requirements -client gets billed those if they aren't "happy" with what I carry that's fine with all other clients.