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We provide personnel to perform fiber optic and pipeline inspection throughout the US. Should we be charging sales tax?

Full Question: We provide personnel to perform fiber optic and pipeline inspection throughout the US. Should we be charging our clients sales tax for these services?

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Answer:

Diane Yetter photoUnfortunately this question is not only state specific but very fact specific. In order to make this determination, you have to evaluate whether the state where the inspection is occurring consider the fiber optics and pipelines to be real property or tangible personal property. Once this is determined, then you need to understand what your "inspection" charge is for - is it scheduled maintenance service, is it a repair service, is it part of the installation service, is it considered a professional service by the state. Then you need to determine if there is any tangible property transferred in connection with the performance of the service? Once you have all this information, then you can research the issue state by state and the determination of real vs tangible property and how they define the service could vary by state. So, unfortunately this is not something we can answer within this forum. If you are interested in our services for performing this research for you, you can contact me at diane@yettertax.com or 312-701-1800 (ext2) to discuss it in more detail.

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