- Tax Rates
- Why is tax included or not included with my purchase?
- Tax exemption
- Why do you collect sales tax from Texas residents and not from out-of-state residents?
- What about other countries?
A Small Orange collects Texas Sales & Use Tax and India Service Tax.
*In Texas, web hosting is considered a "data processing service" and 20% of the charge is exempt from tax. The actual amount of tax that is collected is calculated with the appropriate exemptions, where applicable.
If you are outside of Texas or India, then we are not required to collect tax (e.g. sales tax or Service Tax) on your account.
Texas: Any customers with a billing address in Texas will be required to pay a state sales tax on top of the initial invoice. This does affect current customers and will be applied to recurring charges.
India: India now imposes a 18% Service Tax on electronically supplied services sold by foreign entities to customers located in India effective December 1, 2016. As part of our ongoing compliance with India Tax Laws, we will be applying the India Service Tax on all of our products sold to India customers. If you are exempt from the India Service Tax, please contact us via Live Chat or submit a ticket to provide your India Goods and Service Identification Number so that we may exempt your purchase on your next invoice. The India Goods and Service Identification Number should be submitted through your billing portal.
Texas: To be exempt from Texas Sales & Use Tax, we need the proper documentation proving tax exemption status.
For business tax exemption, we will require the appropriate form be completed and emailed or faxed back to us for verification.
For non-profit organizations, we require a copy of your 501(c)3 certificate via email or fax.
Please contact our Billing department via phone or Live Chat to provide the documents or fax them to Billing at (678) 298-6780.
India: To be exempt from the India Service Tax, you need to input your India Goods and Service Identification Number under under My Details in the billing account.
According to United States Supreme Court decisions interpreting the U.S. Constitution, A Small Orange is only required to collect taxes for states in which it physically operates. As such, A Small Orange is not required to collect sales & use tax or service tax for states and countries it does not reside in.
For jurisdictions that A Small Orange does not collect sales & use tax, Service Tax, or VAT for, it is the responsibility of the purchaser to pay any sales & use tax, Service Tax, or VAT due if any. Some jurisdictions require the purchaser to pay a use tax, Service Tax, or VAT directly to the state when purchasing from any out-of-state vendors in certain circumstances (i.e. in some jurisdictions, the tax is still due, but A Small Orange is not required to collect it). Please consult your accountant or government tax office for specific advice.
Data Processing Tax Rate in Texas
The Texas state sales tax is currently 6.25%. In addition to the state sales tax, A Small Orange is also required to charge a 2% local sales tax rate. The 8.25% sales tax rate is imposed on web hosting services, which is considered a "data processing service." Data processing services have been deemed to be taxable services under Texas law, however, 20% of the value of data processing services are exempt. Therefore, only 80% of the web hosting purchase price is subject to the Texas state and local sales tax.
If you are curious or just want to hear it directly from the taxing authority, here are some links to the Texas Comptroller of Public Accounts and India's Central Board of Excise and Customs website which will give you a greater understanding of the law.
If you do business, or plan on doing business in Texas and India, this is a recommended reading.