We are working with an accountant to get this sorted out (you're totally right David - best money ever spent on our business since this is NOT our area of expertise). Here are two links they sent to us, which are not totally clear, so we sent these on to our lawyer. Here are the links:
http://dor.wa.gov/content/getaformorpublication/publicationbysubject/taxtopics/realestate.aspx http://apps.leg.wa.gov/wac/default.aspx?cite=458-20-118 After reviewing these, and doing some research, our lawyer has concluded that the laws in this area are a bit gray. We definitely don't have to pay sales tax on full-time office rentals, and we definitely do have to pay sales tax on anyone using the office on a "drop-in" basis. People sharing an office (one person uses it 2 days a week, another uses it 3 days a week) is a gray area, and the lawyer said we could make our own call on this. The accountant is going to help us figure out our back taxes. We're trying to figure out how to charge and track this sales tax on an ongoing with our customers. -Molly On Feb 7, 8:40 am, Chris Kerins <[email protected]> wrote: > David, are you referring to paying sales tax in CA for coworking > memberships or some other product? As an illustrator, my understanding > of CA sales tax is items are taxable when something tangible is > exchanged. Not sure about WA. Plus I know that illustration is in a > gray area already. BUT I am NO expert in taxes. > > How are some of you veterans handling this? What did you find out? > > I wonder how health clubs treat sales tax. that may be the closest > analog. > > Another line of thought: perhaps an accountant needs office space at > your location and will trade service for service? They would have > exposure to the rest of the members who might need their service too. > > Chris > > On Feb 6, 10:48 pm, "David J. Kordsmeier" <[email protected]> wrote: > > > > > Hi Molly, > > > Can you produce the line of WA tax code that refers to what items qualify > > for sales (use) tax? Would help for some of us none WA residents to look at > > what the situation is. In CA, I pay the FTB (state Franchise Tax Board) > > quarterly. It's up to the business to either charge sales tax on taxable > > items explicitly, or build tax into the price for goods/services. To figure > > this out, you work up a spread sheet of your different revenue sources on a > > quarterly basis, and then figure out which items are exempt from sales tax, > > and take the remainder and apply sales tax to those items. You have > > actually to then (in CA), look at where your revenue occurred (City and > > County), and pay an additional levy on these taxable items (usually some > > small %, like in SF, it's less than one point). Interstate sales are > > treated differently, but you probably won't deal with that in your > > business. I find it surprising that rental services (which is how I would > > classify the co-work) qualifies for sales tax, but maybe. As well, you may > > want to bite the bullet and find a good tax person who does business tax > > prep (not H & R block) in your state who will be able to guide you through > > the process. It will be the best money you ever spend on your business. > > > And not to worry, if you mess it up this year, the state will eventually > > help you correct the problem ;) > > > - > > David > > > On Fri, Feb 6, 2009 at 7:22 PM, Heidi and Molly < > > > [email protected]> wrote: > > > > Hello all. > > > > In preparing our 2008 taxes, we've learned that although sales tax > > > isn't required for anyone renting full-time office space, anyone who > > > is renting part-time office space or using our office on a drop-in > > > basis,, and anyone using our conference room, is required to pay sales > > > tax (at least in WA they are). We haven't been doing that, so we're > > > about to embark on the process of paying back taxes, and then figuring > > > out if/how we need to change our rates to handle these added taxes. > > > > I'm curious if anyone out there knows anything about this, or has any > > > advice or information they can share. > > > > Thanks, > > > -Molly- Hide quoted text - > > - Show quoted text - --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "Coworking" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/coworking?hl=en -~----------~----~----~----~------~----~------~--~---
