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heritagelaceandtreasuresboutique



Posts: 97

PostPosted: Fri Apr 12, 2019 11:24 am    Post subject: Sales Tax License Reply with quote

Hello Everyone!

Trust that everyone is having great sales and I have a question.

How are you as sellers handling the sales tax per state situation? Did any of you get other state licenses other than your own state? Am I understanding that it is $100,000 total sales or 200 transactions per state or combined total of all 50 states.

I went online recently and was so surprised at how many states have implemented or will be in the future.

You talk about a confusing mess, this is a total mess. Every state has their own set of rules.

Your thoughts would be greatly appreciated.
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MoonwishesStore



Posts: 15378

PostPosted: Fri Apr 12, 2019 4:42 pm    Post subject: Reply with quote

Here on eCRATER, I collect sales tax on taxable things for my state. I have no business in any other state at this point. Each state has its parameters ($$ and numbers of items sold) and please note that there are states in the US that do not collect sales tax so if you see someone collecting for all the 50 US states, they shouldn't be.

I would be more than happy to collect and pay sales tax on all the states if I was making the amount that would bump me into those ranges of states and amounts sold in each state. AND, I could afford an accountant to deal with it all! I track where each sale is going to and at this point in the year, I haven't had even 20 sales yet in one state. Don't think I am going to get to 200 orders anywhere. Nor am I even close to making $100K in sales much less that much from one state! Those parameters are rather dumb anyhow. A person could sell 19 items at $10K/each so they sell $190,000 in value so they don't have to pay sales tax. Someone else sells 201 items at $5 so they make $1005 and they do have to collect and pay sales taxes on that amount. So very screwy. Your best bet is finding a tax accountant that knows something about sales taxes for the USA. That isn't necessarily Joe down the street, that generally does the taxes for the local gas station and local restaurant and those types of places. Never does anyone's taxes outside of the town folk. Most likely you will need to find someone with a big office (staff) and bigger rates to work with you.

Not all the states have the same thresholds, so make sure at least you are doing your sales tax correctly, and I am not going to send a state 30 cents worth of sales tax for them buying a $5 item from me. I have heard that some states charge you for applying to even collect sales taxes! Yeah sure, I will pay the state $50+ to collect 30 cents!

You definitely do need to research all this. First off be sure you know your state's rules and that you are doing that correctly as there are generally no parameters on your own state. You either collect it or you don't. And then track how much you are selling to other states. If you start getting close to 200 orders for one state (or the max number for the states that are different than 200 orders) an/or close to $100K in sales for one state. If so congratulations!
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heritagelaceandtreasuresboutique



Posts: 97

PostPosted: Fri Apr 12, 2019 7:06 pm    Post subject: Sales Tax License Reply with quote

Moonwishes,

I always enjoy reading what you have to say. Very informative reading!

I only wish like you, I could get 200 or more sales to one state but at the moment that is a long ways down the road, if ever. I am blessed if I have 200 sales for the year and I sell on Ecrater and have my own website store.

I have collected sales tax in my own state for years, so no problem.

I did do some research on other state sales tax license and you are absolutely right. Some states charge to obtain a sales tax permit. Highest I have found is $50.00. My own state was free.

My main concern was if the overall sales total was $100,000 or 200 transaction for all 50 states combined or per state. I can perhaps do 200 transactions or more for all 50 states combined but I never have per state.

How I long for the good-ole days when selling online was much easier and it was fun, now it is staying ahead of all the changes and a lot of work.
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A-Better-Way



Posts: 3116

PostPosted: Fri Apr 12, 2019 7:46 pm    Post subject: Reply with quote

My quick take on the situation is that if one is buying things wholesale for resale (because they you to have a sale tax license to be able to get the lower price and access) must pay sales tax, or collect the tax.

That paper allows you to buy stuff tax free.

If you are selling your own items that you already paid sales tax on, must not be collected. Period. !

However they still have "income" to tax for that, LoL Shocked
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MoonwishesStore



Posts: 15378

PostPosted: Fri Apr 12, 2019 8:40 pm    Post subject: Reply with quote

@heritage - Did I say I had 200 sales to one state? Didn't mean to, but I was in the middle of doing my taxes which just got done. My brain is fried. The most I have ever had in one state was CA with 120 orders last year. With TX at 50% of that. This year CA and TX are neck and neck and most of this year TX has been ahead! All combined and with eCRATER and Amazon I do go over 200 orders a year, but never in one state. Back in 2014, Cosmicray mentioned something and it got me checking out all the states where my sales are from and it has been interesting indeed to see where they come from!

The thing is, I think small sellers are in panic mode about this for no reason. Some really small sellers are running around like Chicken Little trying to find ways out of collecting and paying sales tax (Amazon does the collecting and paying on the states that are demanding it currently). You know what I mean, Small sellers that maybe have 10-20 orders a year and they are thinking of quitting selling in some states, which won't work here as you have to sell to all 50 states. They just need the time to go eat a Snickers, some ice cream, and/or if they do these things smoke a cigarette or have a swish of something from a bottle and relax. THEN read some accurate info and absorb the main content about state sales tax and collecting it. They would realize that they are not going to get caught in the mess. They simply don't even begin to make enough money.

Most wouldn't even have to look at their bookkeeping to know this. If their trips to the mailbox are only hoping to find a letter from Publisher's Clearing House telling them they won, they clip coupons and can only buy some of the specials at the grocery store (never the yummy stuff). They have needed a cavity filled or new glasses for the past few years, but put it off as they don't have the money - period. They aren't selling much unless they are trying to support 32 relatives all at once. Now some that might be making good money, generally know it and are just being tightfisted with their money. They know that they have bank accounts of way over several hundred thousand dollars and all they have done for the last 10 years is selling online. They most likely will need to be collecting some taxes.

Perhaps one of the problems is I keep bumping up against so many sellers on Amazon that don't keep any records of their own apparently. They depend on Amazon to keep all records for them. I track everything myself, so I know how my business is going. Like I have let it slide while getting these IRS & State taxes done, which had a few oddball items that I will never have to face again! But let's just say it wasn't fun! But whenever I am not focused on the business, The business tells me to get to work. Nevertheless, This weekend is for me!
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slyravengear



Posts: 120

PostPosted: Mon Apr 15, 2019 12:44 pm    Post subject: Reply with quote

I only tax for my state, if any state tries to come after me for their citizens buying from me, I will forward those complaints to my states treasury and let them know other states are trying to steal taxes from them.
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cosmicray



Posts: 6603

PostPosted: Mon Apr 15, 2019 3:03 pm    Post subject: Reply with quote

A-Better-Way wrote:
My quick take on the situation is that if one is buying things wholesale for resale (because they you to have a sale tax license to be able to get the lower price and access) must pay sales tax, or collect the tax.

That paper allows you to buy stuff tax free.

If you are selling your own items that you already paid sales tax on, must not be collected. Period. !

However they still have "income" to tax for that, LoL Shocked

Let's see …

A resale certificate allows you to tell the person you are buying from you have one. If they normally collect sales tax, then they probably will honor your certificate (assuming you are both in the same state), but some sellers always collect sales tax. In that situation (and this is how Florida does it) you should keep track of the sales tax paid (for exempt purchases) and enter that on your periodic sales tax report form (as a credit). You can only get credit for taxes paid (in Florida) up to the amount of tax you collected. Beyond that, you have no recourse.

You are required (in Florida) to collect tax on all non-exempt goods sold, unless the buyer presents you with a reseller/exemption form from the DoR. It has nothing to do with the fact you did, or did not, pay sales tax when you acquired it.

Note that shipping charged is supposed to be taxable (in Florida) in most cases.
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slyravengear



Posts: 120

PostPosted: Mon Apr 15, 2019 3:34 pm    Post subject: Reply with quote

cosmicray wrote:
A-Better-Way wrote:
My quick take on the situation is that if one is buying things wholesale for resale (because they you to have a sale tax license to be able to get the lower price and access) must pay sales tax, or collect the tax.

That paper allows you to buy stuff tax free.

If you are selling your own items that you already paid sales tax on, must not be collected. Period. !

However they still have "income" to tax for that, LoL Shocked

Let's see …

A resale certificate allows you to tell the person you are buying from you have one. If they normally collect sales tax, then they probably will honor your certificate (assuming you are both in the same state), but some sellers always collect sales tax. In that situation (and this is how Florida does it) you should keep track of the sales tax paid (for exempt purchases) and enter that on your periodic sales tax report form (as a credit). You can only get credit for taxes paid (in Florida) up to the amount of tax you collected. Beyond that, you have no recourse.

You are required (in Florida) to collect tax on all non-exempt goods sold, unless the buyer presents you with a reseller/exemption form from the DoR. It has nothing to do with the fact you did, or did not, pay sales tax when you acquired it.

Note that shipping charged is supposed to be taxable (in Florida) in most cases.


Thats evil, tax you buying the items, then you tax the buyer. State gets to double dip.

Time people rose against taxes like this
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MoonwishesStore



Posts: 15378

PostPosted: Tue Apr 16, 2019 6:56 am    Post subject: Reply with quote

Quote:
Thats evil, tax you buying the items, then you tax the buyer. State gets to double dip.

Time people rose against taxes like this


Talk about double-dip (and not thinking of a double-dip ice cream cone!), Someone buys something new at a retail store. Tax is charged. Then the original buyer is tired of the item or wants to get rid of it. Lists and sells it on Amazon, another sales tax. Then that purchaser decides to donate it to a thrift store, and I buy it, yet another sales tax, I then put it up for sale (again!), it sells and they pay sales tax again. And it keeps circling around the drain and over the course of its life much sales tax has been paid on it. I don't know how many actual times it is sold and sales tax paid. Confused

The thing that really amuses me, is I think the states have a really overwhelming erroneous idea of what they are going to be able to collect in sales tax. SD, the state that first made an official announcement about this, in the last 5 years that I have tracked states sales, I have shipped 15 sales total to them. I doubt the total value was more than $200, but let's assume it was and with a sales tax rate of 10% (I have no clue what it really is) And so over 5 years, SD gets a total of $20 in sales tax from me. Then SD has to pay the workers involved in the collection, upgrade their computer system, etc. I know some companies will be paying more, but I don't think it will be in the long run doing much for SD, especially if they have to track down the bad internet online sellers that didn't send them $1.23 this year!
JUST MY HUMBLE OPINION ONLY!!!!!
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Chakracord



Posts: 151

PostPosted: Tue Apr 16, 2019 7:07 am    Post subject: Reply with quote

[quote]"Talk about double-dip (and not thinking of a double-dip ice cream cone!), Someone buys something new at a retail store. Tax is charged. Then the original buyer is tired of the item or wants to get rid of it. Lists and sells it on Amazon, another sales tax. Then that purchaser decides to donate it to a thrift store, and I buy it, yet another sales tax, I then put it up for sale (again!), it sells and they pay sales tax again. And it keeps circling around the drain and over the course of its life much sales tax has been paid on it. I don't know how many actual times it is sold and sales tax paid"
Quote:


I thought about this years ago when it comes to used cars.
How much tax you pay the first time purchase and the second and so on.
That's why I don't mind the buyer "fudging" a purchase price.

The other thought is, if we had to pay taxes on used items that 1% or 2% across the board and that's it.
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cosmicray



Posts: 6603

PostPosted: Tue Apr 16, 2019 1:20 pm    Post subject: Reply with quote

MoonwishesStore wrote:
Talk about double-dip (and not thinking of a double-dip ice cream cone!), Someone buys something new at a retail store. Tax is charged. Then the original buyer is tired of the item or wants to get rid of it. Lists and sells it on Amazon, another sales tax. Then that purchaser decides to donate it to a thrift store, and I buy it, yet another sales tax, I then put it up for sale (again!), it sells and they pay sales tax again. And it keeps circling around the drain and over the course of its life much sales tax has been paid on it. I don't know how many actual times it is sold and sales tax paid. Confused

In Florida, you would be able to claim the highlighted tax as a credit against your collected taxes due.
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cosmicray



Posts: 6603

PostPosted: Tue Apr 30, 2019 8:39 am    Post subject: Re: Sales Tax License Reply with quote

heritagelaceandtreasuresboutique wrote:
I went online recently and was so surprised at how many states have implemented or will be in the future.

And lo, the big-E has realized the problem must be dealt with …
https://www.ebay.com/help/selling/fees-credits-invoices/taxes-import-charges?id=4121#section4
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MoonwishesStore



Posts: 15378

PostPosted: Tue Apr 30, 2019 9:37 am    Post subject: Reply with quote

Quote:
In Florida, you would be able to claim the highlighted tax as a credit against your collected taxes due.


I don't think we have that in PA, but I have found it prudent in some cases, one in particular, to not produce a sales tax certificate! When buying something from one company, they may be thinking I am in business reselling what I buy from them, but not knowing for sure. I don't want them telling me I can't buy at a special price. Nothing in the fine print says that I can't, but the one time I placed a HUGE order from them, I got an email that was weirdly phrased but asking if these were all for me. I answered yes and they let it go at that. If they had asked if I was planning on reselling them, I would have also said yes. But anyhow rather than taking a chance at getting cut off, I don't use my certificate at all.

Still seeing people on the Amazon forum asking if they can cut off buyers from certain states, even though Amazon is doing the collecting and remitting and it doesn't affect them at all! Amazon is like eCRATER - you have to sell to all 50 states (as well as PR, Gaum and the American VI I believe). At least I get orders for those places. The sales tax is taking nothing away from their sales price. They get exactly the same amount for a sale as they would have without the sales tax. Do people not understand math anymore? Been a long time since I had a kid in school, but have they stopped teaching arithmetic or math assuming everyone has a calculator and doesn't need to learn how to add 2+2 and not get 5.
Laughing
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cosmicray



Posts: 6603

PostPosted: Tue Apr 30, 2019 11:42 am    Post subject: Reply with quote

MoonwishesStore wrote:
The sales tax is taking nothing away from their sales price. They get exactly the same amount for a sale as they would have without the sales tax. Do people not understand math anymore?

From the seller's perspective, you are correct. From the buyer's side of the fence, there is a tangible difference. Some buyers will search for the lowest total price, and they consider sales tax to be part of that total.

My concern about this has to do with how eCRATER is going to deal with it (or if they are or are not). Technically, from what I've read, the venue does not have to handle the collection and remittance. That Amazon and eBay are doing so (plus possibly a few others like walmart.com) suggests that the day may come when the state DoR will beging looking at venues who are leaving it up the to the sellers. eCRATER is in the top 10 fixed price marketplaces, so it has to attract that attention.
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SheilaDeesPostcards



Posts: 3843

PostPosted: Tue Apr 30, 2019 1:15 pm    Post subject: Reply with quote

Each state makes their own rules regarding Sales Tax. One really big difference between eCRATER and other marketplaces is how the money is handled. All money transactions between the buyer and seller on eCRATER is handled by the buyer & seller. With Amazon, they handle all the money, Etsy now handles all money, and eBay is moving in that direction. With South Dakota, that makes a difference and, from what I have read, excludes eCRATER. There really is no way eCRATER could collect the tax where they have no financial interaction with the buyer.
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