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Topic: Sales Tax  (Read 28081 times)
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KnitAddictions
« Reply #20 on: June 22, 2004 11:28:13 PM »

I'm not sure if this has been addressed somewhere, but I'm going out of my mind trying to figure it out. 
Ok--if you sell on the internet, you only have to charge sales tax on items sold within the state where you have a physical presence (i.e. where you live, where your shop is whatever).  If you buy your supplies for your crafts within your state, you don't have to pay sales tax because you are going to resell items you make from those supplies.  Now, my question is, if you didn't pay sales tax on those supplies, and the customers you sell to on the internet are not from your state so they don't pay sales tax on your merchandise, how does sales tax get paid on that merchandise?  I order the majority of my supplies online from outside my state so I don't pay sales tax.  Or if I were to buy locally, you can often get a tax exemption at the store (i.e. the Joann's tax exempt card discussed earlier in the thread).  I can't imagine that the government wouldn't want sales tax paid on that merchandise one way or another, so I am responsible for paying sales tax on items that I am buying out of state and then selling out of state?   Huh  I am totally confused?HuhHuh??
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lexscreations
« Reply #21 on: June 23, 2004 07:26:01 AM »

I'm not sure if this has been addressed somewhere, but I'm going out of my mind trying to figure it out. 
Ok--if you sell on the internet, you only have to charge sales tax on items sold within the state where you have a physical presence (i.e. where you live, where your shop is whatever).  If you buy your supplies for your crafts within your state, you don't have to pay sales tax because you are going to resell items you make from those supplies.  Now, my question is, if you didn't pay sales tax on those supplies, and the customers you sell to on the internet are not from your state so they don't pay sales tax on your merchandise, how does sales tax get paid on that merchandise?  I order the majority of my supplies online from outside my state so I don't pay sales tax.  Or if I were to buy locally, you can often get a tax exemption at the store (i.e. the Joann's tax exempt card discussed earlier in the thread).  I can't imagine that the government wouldn't want sales tax paid on that merchandise one way or another, so I am responsible for paying sales tax on items that I am buying out of state and then selling out of state?   Huh  I am totally confused?HuhHuh??

I honestly don't think the government has anything in place yet to enable them to collect sales tax for out-of-state Internet sales.  So I would guess you don't have to worry about it.  (I don't think it means you have to pay tax on your supplies.) 

If anyone knows otherwise, please enlighten us.  Wink
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Serendipity
« Reply #22 on: July 14, 2004 01:12:41 PM »

Technically, customers are supposed to pay sales tax directly to the gov't when they make out-of-state internet purchases on which they haven't paid sales tax (assuming they're not buying for resale). Most people don't even know about this law and it's not really enforced yet, but it probably will be at some point in the future. Anyway, sellers are NOT required to collect sales tax on out-of-state sales even if they have not paid sales tax on the materials used. It is the responsibility of the buyer. Does that make sense?
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lexscreations
« Reply #23 on: July 14, 2004 07:26:08 PM »

Technically, customers are supposed to pay sales tax directly to the gov't when they make out-of-state internet purchases on which they haven't paid sales tax (assuming they're not buying for resale). Most people don't even know about this law and it's not really enforced yet, but it probably will be at some point in the future. Anyway, sellers are NOT required to collect sales tax on out-of-state sales even if they have not paid sales tax on the materials used. It is the responsibility of the buyer. Does that make sense?

Yes.  In fact, I learned as much recently from my boyfriend, who is taking a public policy class.  Smiley
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sadielouwho
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« Reply #24 on: September 16, 2004 09:22:29 PM »


BTW, I mailed in the application for my sales tax id today -- Yippee!
See, I got mine in the mail a few days ago and I was really confused by some of the questions. Like what did you fill out for," Projected gross sales"? It's like, how the heck should I know and why do you care? Also, after you get your application approved, they ask you questions like," Give a list of your suppliers" How do I know who my suppliers are? Most of them won't even talk to you until you have that stupid certif! As you can tell, I'm not frustrated or anything...it just seems like I've been spinning my wheels lately. You can't get a business lic. until you have a seller's permit and you can't get a seller's permit until you have a business...hello?!
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shes crafty
« Reply #25 on: September 23, 2004 12:02:55 AM »

I'm trying to wrap my head around all the terms here-EIN, tax ID #, business license, etc.  Are these the same things?  Are they the same as a wholesalers license?  I'm throwing around the idea of starting my own business, but not sure really where to start legally.
Is there a small business bureau (in CA) that could answer these questions, or can someone spell it out for me (a little slow to this, sorry Huh)

« Last Edit: September 23, 2004 12:05:01 AM by she's crafty » THIS ROCKS   Logged
OldQlts
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« Reply #26 on: September 23, 2004 06:33:12 AM »

I'm trying to wrap my head around all the terms here-EIN, tax ID #, business license, etc.  Are these the same things?  Are they the same as a wholesalers license?  I'm throwing around the idea of starting my own business, but not sure really where to start legally. Is there a small business bureau (in CA) that could answer these questions, or can someone spell it out for me (a little slow to this, sorry Huh)

i'm in california, so i'll jump in here! this is the state of california's business portal: http://tinyurl.com/4ybsx (the actual URL was waaaay too long). i'm not sure you'll be able to find anyone to "advise" you at the state level, although they'll be happy to get you set up with the proper permits & licenses.

if you're wanting to start a small home-based crafts biz in california, then all you'll probably need are the sales tax license (aka "seller's permit") from the BOE (board of equalization) and maybe a city or county license, depending on where you live (check with your local municipality for that info). the seller's permit is free (yay!), but your local folks may charge you a bit (go figure!).

two organizations that are helpful are the SBA (small business administration) and SCORE (service corps of retired executives). they both have terriffic web sites. just google for them and you'll find them easily enough. Smiley  they have TONS of online info, and may be willing to talk to you in person (i'm not sure how interested they really are in small, home-based businesses however).

to answer some of your other questions, EIN (employer identification number) is probably only required if you're going to have employees, tax ID # is probably the seller's permit #, and the seller's permit is what you'll need in order to buy wholesale. keep in mind that buying wholesale often involves minimum orders in excess of $100, and sometimes quite a bit more than that, however it will also allow you to escape paying sales tax when you go to your local joann's fabric store (for example) to buy supplies at retail! (most, but apparently not all retail stores ... based on my personal experience ... will allow you to bypass the sales tax when you have a seller's permit.)

hope this helps! feel free to holler for more help as you grow your business!


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jjgirl
« Reply #27 on: September 23, 2004 04:50:15 PM »

Hey! I'm 15 years old and from PA, which seems like didn't come up in this conversation.  I too had the sales tax problem.  I googled, and called about 15 toll free numbers that I found online, in the phonebook, etc, but nothing seemed to work.  I finally just called a number and filled out a machine survey and requested that they send me a form for a PA Salex Tax License. (actually, i think it's called a sales, use, and hotel occupancy tax, or some other junk like that...)
But I got the form in the mail about a week later and it gave clear instructions about what to put in each section - much better than what they have to off online at www.paopenforbusiness.state.pa.us or http://www.revenue.state.pa.us/.  But I though it would be quicker if I just submitted my info online - I did and winthin two days, I had an e-mail with my sales tax id # in it.  I recieved all the official documents around 1 1/2 weeks later, so it did take some time.
And all that just because I wanted to sell my hats and scarves at two craft fairs.  Man. 
Oh, and just a quick question about filing the quarterly returns: since I technically sell "clothing accessories" I don't have to collect tax, right?

Hope this helps and if anyone in PA has anyother questions, feel free to e-mail or PM me!
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OldQlts
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« Reply #28 on: September 23, 2004 08:05:24 PM »

hi jjgirl!

first, i really have been wanting to say how terriffic it is that younger folks are interested in marketing their crafts! i've sold my handmade things since around 6th grade or so (that was MANY years ago!).

sales tax is a state thing, and every state seems to have a different name for the department or agency that handles this stuff! i'm glad you finally got the paperwork you needed!

yep, many fair promoters are getting picky about whether one has a tax number. but you've got yours now! and DO remember to use it to "avoid" paying sales tax when you buy supplies!   Cheesy  you might ask your favorite suppliers if they offer any sort of discount. i know joann's (fabric store chain) has a card you can get that is good for 15% off ALL items, as long as it's not a coupon sale. (meaning if they just offer 40% off and you don't need a coupon to get that sale price, then you can use the discount card and get a total of 55% off! woooo hoooo!!!) [you can contact joann's thru their web site to get this card, at least that's how i did it.]

whether you have to collect tax on "clothing accessories" is something that's determined by your state. my best guess would be if you don't pay tax on similar items at the mall (for example), then there's no reason that you should have to collect tax on the items you're selling. but you may want to check with someone at your state sales tax authority just to be on the safe side!

best of luck at your craft fairs!

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jjgirl
« Reply #29 on: September 24, 2004 11:03:57 PM »

Thanks for the advice - and about the Joann Fabric discount card, I looked and search their site, but couldn't find any info on how to obtain one.  Any directions would be great!
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