Thread: Sales tax on ad revenue?

Does anyone know if you are required to charge/collect sales tax if you sell ad space on your website?

If you are a registered business and you show your online revenue to the gov, then yes you could charge tax (or you could pay it on behalf of the client).

My friend has his online business registered with the gov and he files his taxes every year. He does not collect taxes on his ad revenue. He simply charges a flat rate. If you do not want to pay the client's taxes, then sure you can charge it. However, I never came across someone who was charging a tax online.

Edit: I live in Canada and so does my friend.

If you live in the USA, whether or not you have to charge sales tax depends upon the tax laws in your state. In some states "services" are taxable. You will need to talk to a tax professional or contact your state's tax office.

I do not know how taxes work in other countries.

Thanks. I'm in Texas, if anyone knows TX state laws. I know there is tax on hosting at 80% of the normal rate, but not sure on ads. Some services are sales taxable in Texas, but some are not.

I guess I'll have to contact the tax office to be sure.

When you sell ad space to Google via adsense the money is reported as regular income.