Navigating Sales Tax in Interior Design: A Designer's Guide

The requirement to charge sales tax for interior design projects in different states depends on the specific tax laws and regulations of each state, as well as various factors such as the nature of the services provided and the location of the client. Here are some general guidelines:

1. Nexus: In the United States, the concept of "nexus" is important when determining sales tax obligations. Nexus refers to a connection or presence in a state that triggers the requirement to collect and remit sales tax. This presence can be physical (e.g., having an office or employees in a state) or economic (e.g., generating a certain amount of sales in a state).
2. Services vs. Tangible Goods: Sales tax typically applies to the sale of tangible goods, not services. However, some states may consider certain interior design services as taxable if they involve the sale of tangible property (e.g., furniture, fixtures) along with the design services.
3. Resale Certificates: In some cases, if you are purchasing items on behalf of a client and reselling them to the client as part of your design services, you may be able to use a resale certificate to exempt those purchases from sales tax.
4. Location of the Client: If you provide interior design services to clients located in different states, you may need to consider the sales tax laws of each state. Some states have destination-based sales tax, which means you collect sales tax based on where the customer is located.
5. Consult a Tax Professional: It's important to consult with a tax professional or accountant who is knowledgeable about sales tax laws in your specific situation and the states where you do business. They can help you determine your sales tax obligations and ensure that you are in compliance with the relevant laws.
6. Registration: If you determine that you need to collect sales tax in certain states, you may need to register with the state's taxing authority and obtain any necessary permits or licenses.

Sales tax laws can vary widely from state to state and can be complex, so it's essential to seek professional advice to ensure compliance. Additionally, tax laws and regulations can change over time, so staying up to date with the latest requirements is crucial for your interior design business.

 Angela Roork, Studio Designer Financial Consultant