[Hidden-tech] Taxes, taxes, taxes

[Bruce Hooke]

This second question raises an important point about taxes: if your customer is out of state (or out of the country) then the whole sale tax question is moot, unless they have a physical presence in Massachusetts (or unless delivery of the product takes place in Massachusetts (meaning you hand them the product in person, in Massachusetts, or do something the law sees as equivalent)). They may or may not owe sales tax in the place where they are located but that's up to them to figure out and pay (unless you have a physical presence in the place where they are located, in which case you need to comply with the sales tax rules there). The basic in-state, out-of-state/country concept is pretty simple but as all my parenthetical comments and qualifications indicate, if there are questions about where the product was delivered and whether a customer has a physical presence in-state then it's time to consult an accountant or a tax attorney or to do more careful research on your own. 

As to long-distance payment: within the US a physical check is the obvious and straight-forward solution. From outside the US the ideal solution is bank-to-bank transfer. If your customer is in Europe (I can't speak to other parts of the world as I've never had customers outside of Europe and North America) this is likely what they will expect to do (or even insist on as the only way they will pay) and the only question will be can your bank receive an international bank-to-bank transfer and will they charge you an exorbitant fee for doing so. The US banking system is woefully behind the times on this count but it is slowly entering the 21st Century. This is one place where large banks are often better than small banks. If bank-to-bank transfer isn't an option then the next fall-back I'd look to is PayPal. This should work fine as long as your customer is a person or small business that can handle using PayPal. An accounts payable department at XYZ multinational company isn't likely to be willing to send you money via PayPal, but a small business might. The other big down side of PayPal is that they take a fee out of the transfer so you don't get as much as the customer sent. If the customer is willing to they could send it to you using PayPal's system for transferring money between friends and family and suchlike and then there's no fee, but the sender is also effectively waiving many of PayPal's protections, but this should be relatively moot if the product has already been delivered. International checks are a real hassle so I'd only go that route as a last resort. If you do have to go that route talk to your bank first and find out what they need to be able to cash a check from overseas.

Good luck and congratulations on generating your first invoice!
Bruce


      From: Lambertus Louw <hello at lplouw.com>
 To: hidden-discuss at lists.hidden-tech.net 
 Sent: Monday, October 3, 2016 8:34 PM
 Subject: Re: [Hidden-tech] Taxes, taxes, taxes
   
 Also, if I may, what method of payment do you recommend - especially concerning long-distance payments (so cash or physical check might be impractical)?
   Sincerely LP Louw hello at lplouw.com
 portfolio.lplouw.com
 +1-310-498-6062  On 10/3/2016 8:30 PM, Lambertus Louw wrote:
  
 
Hi all Prepping my first invoice tonight for services rendered when I suddenly realized I have no idea if there are any legal requirements and whether or not I should be charging any kind of sales tax or some such?? I've been trawling the web, but the info is confusing an ambiguous. Found this on tax on software developing:  http://www.mass.gov/dor/docs/dor/law-changes/faqss-computer-software-2013.pdf but I'm not sure it applies?
  The invoices is for a set of hours work on graphic and web design - no physical products. Any advice?
  -- 
 Sincerely LP Louw hello at lplouw.com
 portfolio.lplouw.com
 +1-310-498-6062  
 
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