No, pet sitting is not “tangible” or “business” related, so pet sitters are not subject to the personal services tax. However, some forms of “services for animals” (i.e., veterinary services, groomer services, boarding services, etc.) may include a separate, “taxable” cost of pet seating, depending on whether those services are for the individual or group.
If you intend to charge your customers for services like cleaning their pets, grooming or providing transportation for them, then you will need to keep careful records showing whether the activities constituted a taxable “service” for purposes of the personal services tax.
What is a Service for Animals?
Service for animals is anything else an individual or organization is “services” for. To be a tax-exempt business, an institution must be “charitable” under IRS rules, with an established tax-exempt purpose as a primary goal and that purpose being to provide services for an established group of donors. The IRS regulations include examples of what constitutes the “services for animals.”
In other words, pet sitters provide their customers with animal-related services, such as grooming, boarding for guests, pet sitting, feeding, and grooming, in addition to their standard activities (i.e., business activities).
What makes each type of service different from the others? For example, pet sitting is generally a service for animals for the tax-exempt organizations. It is the only service that can be classified under any of the exceptions listed in the IRS regulations, such as tax-exempt medical, dental, and nursing care services. Therefore, many individuals will provide pet sitting for people other than their own pets.
Who Should Pay the Taxes?
Individuals should not be able to avoid the law or claim that their business expenses are a “tangible” or “business” service, even if those expenses include pet sitting. If you find yourself inadvertently paying an improper charge for pet sitting, it is important to report this “tax” to the IRS, to avoid becoming liable for penalties and interest. If the service is not a “tangible” or “business” tax-exempt service, you can still avoid any liability for taxes, provided you have the evidence listed in the next section:
Documentation to Show Whether Care, Feeding, or Health Existence Is an Exempt or Qualified Operation
A “tangible” or “business” service, even if it is taxable, cannot
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