Yes, several U.S. states tax professional services, though it is not a universal practice. Hawaii, New Mexico, South Dakota, and West Virginia tax services by default. Others, such as Washington, are expanding taxes to include professional services, while most states tax specific enumerated services (e.g., repairs, landscaping, or custom software).
There are five states (Alaska, Delaware, Montana, New Hampshire, and Oregon) that do not have a state-wide sales tax, so services are not taxable in those states. Four states (Hawaii, South Dakota, New Mexico, and West Virginia) tax services by default, with exemptions listed for certain services.
Services in Florida are generally not taxable, with important exceptions: Nonresidential cleaning services. Some labor to real property, including repair labor (fabrication of materials) and labor on commercial and free-standing residential appliances. Communications services.
Introduction. Sales of tangible personal property are subject to New York sales tax unless they are specifically exempt. Sales of services are generally exempt from New York sales tax unless they are specifically taxable.
Professional services are typically not subject to sales tax in the state of New Jersey. However, the state stipulates that “a business which provides access to any type of information (e.g. stock quotes, financial, legal research, property values, and marketing trends) through any means” is taxable.
Typically, professional services are not taxable in the state of Connecticut unless it includes manufacturing a product for sale.
Starting October 1, 2025, Washington State may begin charging sales tax on many professional services that were previously exempt. This is in addition to the state's existing Business & Occupation (B&O) tax. 2.
Examples of Professional Services Expenses
Fees paid to accountants for tax preparation or auditing. Fees paid to attorneys for legal advice or representation. Fees paid to consultants for business advice.
Generally, services are not subject to Texas sales tax. However, the types of services listed here are subject to Texas sales tax: Amusement Services. Cable Television Services and Bundled Cable Services.
Most states tax some services, and some states tax many services. However, taxation of services is the exception rather than the rule. Few states tax the services of a doctor, dentist, or attorney. Services performed in connection with sale of tangible personal property are often taxed.
The 3% percentage tax is a tax imposed on the gross sales or receipts of a business or professional practice. This tax rate is applicable to those who are VAT-exempt under the Philippines' tax laws.
If you make $75,000 or more in business income, you're required to register for and charge GST (we'll cover this in a sec). This means that you charge an additional 10% on top of your regular fees, which you record and pay to the government when you lodge your next Business Activity Statement (BAS).
The following individuals are exempted to pay Professional Tax: Parents of children with permanent disability or mental disability. Members of the forces as defined in the Army Act, 1950, the Air Force Act, 1950 and the Navy Act, 1957 including members of auxiliary forces or reservists, serving in the state.
Five states have no statewide sales tax: New Hampshire, Oregon, Montana, Alaska, and Delaware. These are sometimes called the NOMAD states. Businesses based in NOMAD states can establish nexus and an obligation to collect sales tax in other states.
Consultant taxes work the same way as any other self-employed person's taxes. Because they are self-employed and not part of a larger organization, they are required to pay taxes on consulting income and lodge them as income tax.
Five U.S. states (Alaska, Delaware, Montana, New Hampshire, and Oregon) do not impose any general statewide sales tax on goods or services. Of the 45 states remaining, four (Hawaii, New Mexico, South Dakota, and West Virginia) tax services by default, with exceptions for services specifically exempted by law.
What are examples of professional services?
Generally, professional services are not taxable in Pennsylvania. However, editing services are taxable.
In most states, construction labor is NOT considered a taxable service. However, in some states, like Arizona and New Mexico, you must charge sales tax for construction labor. Sales tax must be paid to the state — whether paid by you upon purchase from your vendor or deferred to your client to pay.
Classifying professional services expenses
Code Regs. § 117-308.1 - Professional Services. Receipts from the performance of professional services are not subject to the sales tax.
Consider GST and Other Tax Registrations
If your projected annual turnover will exceed $75,000, you must register for Goods and Services Tax (GST). For many photographers just starting out, GST registration won't be required immediately – but it's good to keep an eye on your revenue and register when needed.
Sales taxes are paid by the consumer when buying most goods and services. These taxes provide state and local revenue, funding services like education, transportation, and health care.