96-008
Response
January 16, 1996
Dear
XXXXX
Within
the last 6 months a consulting firm was established in the State of Utah. We have contacted the Tax Commission with
regard to the tax status for consulting firms and have found that there is not
an area in which consulting firms are specifically described. We were told that it falls under the
category of professional services and as such is not subject to certain taxes.
We
want to be certain that we follow the appropriate tax procedures for consulting
firms but are not sure exactly what they might be. If you would be so kind as to put into letter form what if any
taxes apply to consulting firms and the correct method to handle them, we would
be most appreciative.
The
firm provides professional assistance to companies and governments in the form
of facilitation of projects and meetings, training of personnel at all levels,
strategic planning, reorganization of companies and governments, and executive
and supervisory leadership training. We
provide no physical items for sale or resale.
We
appreciate your efforts in answering our questions and look forward to your
letter.
XXXXX
XXXXX
RE:
Advisory Opinion - Taxability of consulting services.
Dear
XXXXX
We
have received your request for sales tax information pertaining to charges for consulting
and we find as follows:
Charges
for consulting services are not subject to sales tax. Marketing plans, financial statements and like documents
developed in the course of consultation are considered incidental to the
professional service rendered and they are not taxable. However, if your firm sells books, training
materials, videos or like tangible property, charges for those items are
subject to sales tax.
Your
letter indicates that your firm provides only consulting services and that it
does not provide training manuals or other tangible items to your clients. Therefore, charges to your clients are not
taxable.
For
the Commission,
Alice
Shearer
Commissioner