What do I need to know about taxes for my virtual event?

Feb 19, 2021 | Ask Alfred

Dear Alfred,
What do I need to know about taxes for my virtual event?
– Robin Smith Jackson, Mississipi

The short answer is: “A lot!”

Your virtual event may create a variety of tax liabilities. The most common on is the sales or service levied by most states. Thanks to recent court decisions, your liability is based on the location of the person paying for the goods or service. This means that if you are charging a registration fee or sell goods to participants, you might be liable for paying state tax in the state for each participant. It gets more complex in that some states allow local counties and other jurisdictions to set different rates (and rules) for such taxes.

The good news is that most states have an annual threshold at which tax liability starts. For some states, this is set at $100,000, but others have limits as low as $10,000. Complying with sales and service tax requirements can still be a daunting task. Some services will take care of this for you; for example, EventBrite handles collection and remittance of sales tax in 25 jurisdictions. If you want to handle it on your own, the virtual platform provider Swoogo offers a free guide on “US Sales Tax For Virtual, Live, and Hybrid Events” that gives details on a state-by-state basis.

Of course, there may be other tax liabilities to consider. For example, if you pay speakers to present at your event, you may be liable for income and other taxes. The rules may be different if the speaker is located in your country or in a different country.

As you can see, the matter can get complex in a hurry. And tax liability is one of those areas where it’s far better to get permission in advance than count on forgiveness after the fact. If you have any doubts, consult a tax lawyer or accountant who is famili