What are the 6 categories of taxable services?

· bookkeeping

 

When ever we think or talk about taxes all we picture are different kinds of product that we use, or don’t use.  

Often we forget that along with the products we at many points of life or we can say that everyday consume some services as well. Some of them aretaxable some are not. Even professionals, accountants and bookkeeping services provider in California don’t talk much about the taxable services.  

Earlier people were spending much amount on the tangible goods so theywere not focusing much on the services. In this article we are going to talkabout 6 essential categories of tax services-: 

· BusinessServices:- 

Basically, all the services that are performed for various companies and businesses are included in this. Due to the enforcements of the government there are various aspects of business that requires taxation. Services like telephone calling, extermination services, credit bureaus and credit reporting etc. Since all these are essential works for the business so companies have topay in order to avail these services.    

· Services totangible personal property (TPP):- 

This taxation is on the services that are being provided along with the tangible properties that are offered to the customers. Suppose you purchased something like furniture and then after some time you need a repair for the same. So now a taxis levied on this service. Tangible personal property services usually includesthe use of professional knowledge and skill and have a direct contact with itlike earlier stated the repair or installation of some items. Now taxes arebeing levied on all these services.    

· Real propertyservices:- 

Generally speaking, services offered under real property are quite different from the personal property services. In this case, taxability treatment related to the real property services is quite complex and often requires a careful and thorough research and planning of different taxcompliances. This tax structure includes services that are performed like-: 

1.  Services performed for commercial and residential (both) properties 

2. New construction and remodeling of the existing ones 

3. Retail sale possibilities  

4.  Floor modeling 

5. Landscaping etc.   

· Professionalservices:- 

There is a big misconception regarding this that such tax is levied only on the licensed professionals like doctors or healthcare staffs, Chartered accountants,lawyers, attorneys  etc., But the truth is it is levied on all the trade,professionals, employment after the crossing of a threshold limit. So,basically a limit has been put on the income and if anyone from any particularfield is crossing that limit then they have to pay the tax. Even freelancersare also included in this category. However, professional tax rates are not same for every states, it differs from state to state.   

· Personalservices-: 

This is the most evident kind of tax that is being paid by a layman intheir day to day routine. Whenever we visit any salon, parlor or any grooming store, even when we visit any restaurant. All the services that we avail at these places come under personal services taxation. Even a visit to a therapistis a kind of personal service, hence comes in this category. To sum up, all theservices that are related to one’s personal care includes taxation.   

· Amusement andrecreation services 

Yes, you read it right every concert or adventure park you have been toor will go to involve the payment of some taxes to the government. And not onlythis when you buy tickets to go to stadiums to watch any professional sport orgo to movie theatre to watch any newly released movie, a certain amount of that ticket includes the amount of tax that you pay to government.   

So, these were some of the essential 6 categories that somewhat includes all the services that comes under taxation. It is important for us to know such fthings because according to a research done by Bureau of Economic Analysis, nowpeople’s spending has been shifted more towards the services as compared totangible goods.