Texas Data Processing

Is your service subject to sales tax? The devil is in the details 😈

Generally speaking, services are only taxable when specifically identified as such. But sometimes, a ""taxable service"" can encompass many different types of activities. For example, the Texas Comptroller of Public Accounts recently ruled that a software publisher was responsible for collecting tax on website design and editing services. Although website design and editing services are not blatantly stated to be enumerated taxable services in Texas, the state has claimed that these services fall under the “data processing” category for years. Data processing is enumerated as a taxable service. It is important to complete thorough research when determining taxability, as what may seem simple is actually often very complex. Many companies and their advisors make the mistake of not digging deep enough, and while this Texas case is a great example, these types of issues are not limited to the state of Texas nor services.