KealyWalker provides automated tax compliance and regulatory support, simplifying complex sales tax, telecom tax, and other industry-specific requirements with accuracy and expertise.

Are professional services subject to sales tax?

Sometimes. Most states exempt traditional professional services such as legal, accounting, and management consulting — but several states (notably Hawaii, New Mexico, South Dakota, West Virginia, and to varying degrees Connecticut, Texas, and Washington) tax broad categories of services. The right answer always depends on what specific service is delivered, where, and to whom.

Do law firms have to collect sales tax?

In most states no — legal services are generally exempt. The notable exceptions are states like Hawaii, New Mexico, and South Dakota that tax services broadly under a gross receipts or general excise framework. Law firms with clients or work in those states should evaluate registration and collection obligations carefully.

Does my consulting firm have sales tax nexus?

Possibly. Consulting firms commonly create nexus through traveling consultants performing on-site work, satellite offices, remote employees, and economic nexus thresholds in states that tax consulting services. Even firms that believe their services are non-taxable should run a nexus study, since nexus determinations and taxability are evaluated separately.

Which states tax professional services?

States that tax professional services most aggressively include Hawaii, New Mexico, South Dakota, and West Virginia (broad service taxation), along with Connecticut, Texas, and several others that tax specific service categories such as data processing, information services, security services, or staffing. The list of taxable service categories has been expanding over time, so an annual review is recommended.

Industries · Professional Services & Staffing

Professional Services & Staffing Compliance

Professional services sales tax compliance is often misunderstood — most firms assume "services are not taxable," and then discover the exceptions the hard way. KealyWalker provides a consulting firm sales tax service and MSP sales tax compliance practice that maps which of your offerings are taxable, where, and gets your registrations and filings buttoned up.

Who this is for

1
Law firms with multi-state client engagements
2
Management consulting and advisory firms
3
Staffing agencies and PEOs operating across states
4
IT consultancies, MSPs, and managed services firms
5
Marketing, design, and creative agencies

Industry-tuned: compliance guidance built around how you actually operate.

Who This Is For

Built for your business model

We specialize in the compliance patterns common to your industry — so you get advice grounded in how your business actually operates.

Law firms with multi-state client engagements
Management consulting and advisory firms
Staffing agencies and PEOs operating across states
IT consultancies, MSPs, and managed services firms
Marketing, design, and creative agencies

Key Compliance Challenges

The compliance terrain you face

Service taxability varies by state

States like Texas, Connecticut, Hawaii, New Mexico, and South Dakota tax broad categories of services that most others exempt.

MSP and IT services exposure

Managed services often bundle SaaS, support, and labor — each of which may be taxed differently in the same state.

Staffing services rules

Several states tax temporary staffing or labor as a service, with very specific carve-outs and definitions.

Multi-state engagements

When work is performed in one state for a client headquartered in another, sourcing rules drive who taxes it.

Reimbursable expenses

Pass-through expenses can pick up tax if they are not separately stated and properly handled.

Historical exposure

Firms that have under-collected for years often need a VDA strategy before extending into new states.

How KealyWalker Helps

A focused services bundle

Our work for this industry is anchored by our Sales & Use Tax Compliance practice.

Service taxability mapping

State-by-state treatment of your service lines.

Nexus study

Identify where your firm has tax presence.

Registrations & permits

Get authorized to do business and collect tax.

Filing & remittance

Monthly and quarterly SUT returns.

Voluntary disclosure

Resolve back exposure on favorable terms.

Audit defense

Represent your firm under examination.

FAQ

Frequently asked questions

Let us map your compliance footprint

Schedule a working session — we will review your exposure and outline a practical next-step plan.

Schedule a Consultation