Generally, bookkeeping services are taxable in Texas. Here’s why:
- Taxable Services: Texas imposes sales tax on a wide array of services, including data processing services. Bookkeeping often falls under this category.
- Exception: A small exception exists if the bookkeeping is an integral part of a larger non-taxable service, such as some aspects of accounting by a CPA firm.
Important Considerations
- Where the Service is Performed: If bookkeeping services are performed in Texas, they are generally subject to Texas sales tax. If the services are performed outside of Texas, there may be a use tax implication for the client if they are based in Texas.
- Who is Providing the Service: The taxability of bookkeeping services can hinge on whether the service provider is in Texas or out-of-state.
- Type of Client: The client’s industry and tax status can also sometimes influence taxability.
How to be Sure
The Texas Comptroller of Public Accounts is the authoritative source to determine the taxability of your specific bookkeeping services. Here’s how to reach out for clarification:
- Texas Comptroller Website: They provide extensive resources on sales and use tax, including detailed breakdowns of taxable services (https://www.salestaxinstitute.com/resources/texas-letter-clarifies-taxability-bookkeeping-services).
- Texas Administrative Code: Rule §3.330: https://texreg.sos.state.tx.us/public/readtac$ext.TacPage?sl=R&app=9&p_dir=&p_rloc=&p_tloc=&p_ploc=&pg=1&p_tac=&ti=34&pt=1&ch=3&rl=330 outlines taxable services.
- Contact the Comptroller: You can call them or submit a question online for a specific ruling on your situation.
