In some US states, Turno is required by law to collect and remit the sales tax from cleaners for Marketplace projects completed in these states. The sales tax rate is dependent on the location of the project and varies by state, county, and city. 🌎
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⚖️ What does "sales tax" mean?
A sales tax is paid to a governing body for the sales of specific goods and services. Usually, laws allow the seller to collect funds for the tax from the consumer at the point of purchase.
When a consumer pays a tax on goods or services directly to a governing body, it is usually called a use tax.
⚖️ What are the states Turno collects and remits sales taxes for?
Currently, in compliance with Marketplace regulations, sales taxes on Turno apply solely to transactions involving US cleaners in specific states - currently, Hawaii, Pennsylvania, Texas, and Ohio.
Turno collects and remits sales taxes on behalf of cleaners in these states, paying at the state level, and the tax address is established based on the location where the cleaning is performed.
Consequently, cleaners are relieved of the obligation to remit sales tax for projects completed for Turno Marketplace customers in the following states:
Hawaii starting October 1, 2022.
Pennsylvania starting October 1, 2022.
Texas starting January 1, 2023.
Ohio starting January 1, 2024.
However, please note that there are specific considerations for cleaners in certain states. ⚠️
Cleaners in Hawaii may still be subject to wholesale GET taxes. More details can be found here: Hawaii GET Tax Information.
Pennsylvania state law requires that sales tax be paid when working with Marketplace facilitators. Additional information can be found in this Pennsylvania Sales Tax Guide.
Cleaners may still be required to pay franchise taxes in Texas. More information can be found under "Marketplace Seller" in the Texas Comptroller's Marketplace Providers and Sellers Guide.
⚖️ How much do I pay in sales taxes on Turno?
Most states have a sales tax ranging between 4% and 8%. The average sales tax for a state is 5.09%. Thirty-two states fall above this average, and eighteen states fall below this average. However, it is essential to remember that the different taxing jurisdictions within a state, such as cities, counties, special-purpose districts, and transit authorities, can impose sales and use taxes up to 2 percent above the average.
Currently, we are collecting the following percentages in sales taxes from cleaners in the states where it currently applies:
Hawaii: average of 4.00% - 6.00%
Pennsylvania: average of 6.00% - 8.00%
Texas: average of 6.25% - 8.25%
Ohio: average of 5.75% - 8%
Please bear in mind that sales and use tax rates can change on a monthly basis. 🚨
⚖️ How does Turno collect these taxes?
Sales taxes are collected when a cleaner receives a payment from a Marketplace customer.
Cleaners can view this information under the payment history page, where they can see the amount paid in tax and how much they will receive by clicking on the question mark (?) icon next to a payment amount. The information is displayed like in the example below.
Project Value: total price of the project, or cleaner rate (usually the same amount as the accepted bid).
Platform Fee: amount paid to Turno.
I receive: total amount after deducting Turno's platform fee.
Sales tax [state]: the sales tax percentage determined based on the location of the property where the cleaning occurred.
Net after tax: represents the final amount that the cleaner will receive in their account after deducting the platform fee and applicable sales tax.
⚖️ Relevant Resources
In case you would like to know more about sales taxes in your state, the following pages may be of help: