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Living in Ohio, website creation is not taxable. If I build a website for a business in another state, should I be collecting taxes on it and will I be taxed when I file?

I do web development in Ohio as a self-employed side business. I am a registered LLC but I am a sole owner there is no other employ. I don't charge taxes but am receiving a 1099 paperwork from a business that pays for my services and they are out of Florida. (again I live in Ohio) When I submit that 1099 paperwork, will I be able to declare that it's web site creation services and not get taxed or will they hit me with taxes even though in Ohio it's not taxable?

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Accepted Solutions
Hal_Al
Level 15

Living in Ohio, website creation is not taxable. If I build a website for a business in another state, should I be collecting taxes on it and will I be taxed when I file?

"website creation is not taxable"?? What does that mean?

 The service of web site creation may not be  subject to sales tax. But, like ALL income, it's certainly subject to Ohio income tax. However Ohio has a very generous (100%) Small Business deduction (SBD). Effectively nobody pays Ohio income  tax on "side businesses" of any type.

Any income that is exempt from Ohio income tax (e.g. social security benefits and military retirement) is first included on line 1 of Ohio form IT1040. Then it is deducted on Schedule A and line 2b of IT1040.

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2 Replies
Hal_Al
Level 15

Living in Ohio, website creation is not taxable. If I build a website for a business in another state, should I be collecting taxes on it and will I be taxed when I file?

"website creation is not taxable"?? What does that mean?

 The service of web site creation may not be  subject to sales tax. But, like ALL income, it's certainly subject to Ohio income tax. However Ohio has a very generous (100%) Small Business deduction (SBD). Effectively nobody pays Ohio income  tax on "side businesses" of any type.

Any income that is exempt from Ohio income tax (e.g. social security benefits and military retirement) is first included on line 1 of Ohio form IT1040. Then it is deducted on Schedule A and line 2b of IT1040.

LauraVF
New Member

Living in Ohio, website creation is not taxable. If I build a website for a business in another state, should I be collecting taxes on it and will I be taxed when I file?

The Florida business will most likely not withhold taxes (federal or state) on your services.  

You are not considered an employee for your client, which means they are not required to withhold income taxes. However, please keep in mind that as a self-employed taxpayer, your earnings will be subject to self-employment taxes (Social Security and Medicare taxes) at the federal level. 

As a single member LLC, you will report the income shown on your 1099 on Schedule C, and remember to include all business expenses. 


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