Intro to the Taxation of Services Flashcards
What are 8 common tapes of taxed services?
- Services to TPP
- Services on real property
- Business Services
- Professional services
- Amusement services
- Personal services
- Digital & Information Services
- When the service is provided as part of the sale of TPP
FOB (Freight on Board) Origin transportation charges are usually …… (taxable/exempt) and FOB Destination charges are usually …… (taxable/exempt).
Exempt, Taxable
What is the difference between FOB Origin and Destination?
- FOB Origin: The customer takes ownership at the seller’s location. The sale is complete once the product is picked up by the customer.
- FOB Destination: The seller is responsible for delivering the product to the customer. The sale occurs at the time of delivery.
True/False: Bundling taxable and nontaxable charges may cause the entire invoice to be taxable.
True
What is the True Object Test and what are 2 other names for it?
- A test to determine what was ultimately provided, rather than on how the seller characterized the transaction (substance over form)
- “Essence of the Transaction” or “Dominant purpose test”
What is a telecomm service?
Any service transmitted by wire or cable
If a service is necessary for the completion of a sale of TPP, that service will likely be …… (taxable/nontaxable)
What are the 2 acronyms for FOB and what is it?
- “Free on Board” or “Freight on Board”
- The point at which the seller’s obligation ends.
What are the 2 acronyms for FOB and what is it?
- “Free on Board” or “Freight on Board”
- The point at which the seller’s obligation ends.
True or False: The person performing a taxable service is the consumer of the machinery, equipment and supplies used in performing said service and will usually owe tax on said items.
True
What 3 things will happen if more and more services become taxable?
- The tax base will get bigger.
- The tax rates will be lower.
- The tax revenue will either increase or remain the same.
Personal services are easier to tax because the taxpayers are ….., and business services are harder to tax due to a stronger business lobby.
individuals and do not successfully unite into a recognizable group.
The current trend shows that (more/less) services will be taxed in the future.
more
What are 6 common types of real property services?
- Landscaping
- Janitorial
- Pest control
- Security
- Painting
- Repairs (Building, maintenance, plumbing, etc)
What are 4 common types of services related to TPP?
- Assembly/Fabrication
- Installation
- Repair and Maintenance
- Painting/Refurbishing
What are 6 common types of professional services that can be taxed?
- Printing/Graphic design
- Credit reporting
- Temporary labor
- Lobyists
- Accounting
- Business Mgmt/Consulting
What are 5 common types of digital and information services?
- Website access and design
- Database access and sales
- Digital downloads
- Cloud computing
- Data warehousing
…… refers to computational resources on demand via a computer network where the user’s computer contains minimal software or data and requires a subscription for online access.
Cloud computing
What are the 3 conditions that are looked at when applying the two-out-of-three rule to a tax imposed on a telephone call? (does NOT apply to mobile calls since mobile calls can occur over multiple state lines during a single call)
- Did the call originate in the taxing state?
- Was the call terminated in the taxing state?
- Was the price of the call charged to a service address in the taxing state?
