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eBay now adds out-of-state sales tax


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Thanks Dan. :cheers:

 

On another tax vein, I know a portrait and wedding photographer who wasn't charging sales tax the last time I asked. That was a few years ago, and I wonder what the fines would be if the state ever caught up with him. He had a rather cavalier attitude about it which didn't impress me.

 

He also had some very expensive photo/video editing software on his computer that was pirated... oy!

 

 

When an eel hits your eye like a big pizza pie, that's a Moray.
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In Virginia and Maryland its not clear how the Supreme Court ruling will affect sales tax. My understanding is the state will have to pass legislation which turns the ruling into law. This will take time but Im betting it will eventually happen. In the mean time Sweetwater is not charging sales tax and Im pretty sure same for MF and probably any other out of state retailers.

 

I think Ill preorder one of everything that may be developed over the next 40 years to take advantage of this.

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Thanks Dan. :cheers:

 

On another tax vein, I know a portrait and wedding photographer who wasn't charging sales tax the last time I asked. That was a few years ago, and I wonder what the fines would be if the state ever caught up with him. He had a rather cavalier attitude about it which didn't impress me.

 

He also had some very expensive photo/video editing software on his computer that was pirated... oy!

 

 

I of course could be wrong, but I think it falls on the buyer to pay the tax. Now as others have said, perhaps once the business does more than a certain amount, they may be required to collect the tax. But the tax is actually on the buyer, not the seller.

 

Dan

 

Acoustic/Electric stringed instruments ranging from 4 to 230 strings, hammered, picked, fingered, slapped, and plucked. Analog and Digital Electronic instruments, reeds, and throat/mouth.

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I of course could be wrong, but I think it falls on the buyer to pay the tax.

 

Here we go:

 

"In a states eyes, sales tax returns show them that you are still in business and that you do or dont owe them any sales tax. If your company is in the type of business that sells taxable products or services then not filing a sales tax return may raise a flag to the state that you are doing something incorrectly or even illegally. Some state taxing authorities can levy huge fines or worse. It is a simple issue to eliminate by just filing your periodic sales tax returns."

 

"Even more serious than the threat for audit, is the threat for criminal implications for sales tax issues. Seriously? Jail time for failing to file sales tax returns? Thats correct because most states impose a criminal penalty for business owners who knowingly fail to file sales tax returns. For example, my home state of Florida has a misdemeanor criminal charge for business owners who knowingly fail to file sales tax returns. Further, states, such as Florida regularly enforce this law. Every couple of weeks the Florida Department of Revenue boasts about business owners who were recently put behind bars for failing to pay and file sales tax returns. This past June, our friends at the Florida DOR reported a Longwood car dealer was thrown in jail for collecting and not remitting tax and not filing his businesss returns. Almost every state with a sales tax has similar criminal provisions!"

 

 

When an eel hits your eye like a big pizza pie, that's a Moray.
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In North Carolina - any business in the state, with very few exceptions (such as a lawn care business) MUST file and remit sales tax. In the past, the tax was only applied to merchandise sold, but this all changed a couple of years ago. Now everything is taxable - labor, travel time and expense, merchandise, whatever. The frequency of filing returns depends on the amount that the business does - my firm is small enough in sales to file quarterly. Some really large businesses have to file on a weekly basis. The state greatly prefers that all of this be done online.

The state also collects taxes for the counties. There is some variation in amount for counties, which have a limited ability to increase by 0.5 to 1%. I don't know if there are any towns/cities in the state that have their own local tax, or how it is collected. Which county the tax goes to is dependent on where the service was performed. (example, I am in Craven County. If a client who lives in Pamlico County has work done at my shop, the tax goes to Craven, if the work is performed at their location, it goes to Pamlico.

 

If too little tax is collected from the customers, the business is still liable to pay the tax. If too much tax is collected from the customers, it must be given to the state. Due to adding up a bunch of smaller transactions, it is very frequent that a few cents (in my case) too much is collected - the customers were not cheated, but the smallest increment is a cent (when I was a kid, tax was to a tenth of a cent, and the state had some stiff paper coins in the different mil amounts)

 

Wholesale sales - no tax is collected. However, one MUST have the proper forms on hand, signed by the other business to prove that the sale is wholesale. Sales to out of state individuals depend on whether the sale was done locally or if it was something like a mail or Internet transaction.

 

There are criminal penalties for larger offenses. Small things, like not filing on time but filing within a limited time later, receive add on charges. Filing can be done using bank draft at the amount due. They also permit payment by credit card, with a fee imposed. Having said that, I have personally found that the personnel of the Sales Tax Division are generally courteous and helpful in assisting a vendor when there are legitimate questions.

 

Use tax, on the other hand, is not imposed on the business; but each taxpayer that has to file in NC must pay use tax in theory for ANY purchase made that for any reason, sales tax was not paid. A signature on the tax form indicates that this is done, and signing and not doing so is considered perjury. Having said that, I'm sure that there is widespread disobedience to that aspect.

 

One of the very first things I learned decades ago in business is that state tax auditors want things RIGHT NOW, that they have apparently unlimited time to spend harassing one if that is not done, and that it is YOUR responsibility to keep records in a manner that makes their job easier. (NC tax people are really good guys compared to my experiences when I lived in the People's Republic of Virginia)

 

Howard Grand|Hamm SK1-73|Kurz PC2|PC2X|PC3|PC3X|PC361; QSC K10's

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"Now faith is the substance of things hoped for, the evidence of things not seen."

Jim

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I have felt it was a huge sham that sales via the Internet did not require the seller to collect sales tax, while sales via brick and mortar did require the store to collect it. The reason that brick and mortar stores have been required to do so is that people realize that if the store does not collect it, people are not going to self-report it. This problem has existed for decades.

 

(Outside of Keyboard Corner, not here) One can debate whether the state they live in spends money wisely, and whether the state they live in collects money fairly from the proper sources (income tax? sales tax? real estate tax? use tax? etc) - but that is not a topic for here.

 

But if I have to pay sales tax on a used keyboard I buy when I walk into a Sam Ash store, why should I also not have to pay sales tax if I buy a used keyboard over the Internet?

 

(please note I am not saying that it is good or bad for a state to have a Sales Tax law - I am just saying it should apply the same to purchases made in a physical store, and purchases made over the Internet). .

 

 

I always thought there should be a Federal Internet Sales tax that part gets divided between the states and part goes to maintaining the internet infrastructure. That would save all the insane hassle for small internet businesses try to track, collect, and pay sales tax to 50 states. Many states like California have had Use tax that state citizens are suppose to pay when buy large items from other states and amazing how the Use tax is same rate and the income tax. Problem most people don't even know it exists and those that do usually don't pay unless caught. California had/has a big problem with people going to Oregon and Nevada to buy cars. piano, etc to avoid or pay lower taxes.

 

Internet charging taxes could help bring some business back to brick and mortar stores. I saw an article a couple days ago that brick and mortar sales are getting better and some internet only businesses are starting to open a new type of brick and mortar store that combines physical and internet item available from the store. That all sounds good to me.

 

 

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California had/has a big problem with people going to Oregon and Nevada to buy cars.

 

You can't avoid sales tax on a vehicle here in PA by going outside the state. They charge it here when you register your car...

 

 

 

When an eel hits your eye like a big pizza pie, that's a Moray.
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California had/has a big problem with people going to Oregon and Nevada to buy cars.

 

You can't avoid sales tax on a vehicle here in PA by going outside the state. They charge it here when you register your car...

 

There are indeed legal ways to avoid sales tax.

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Problem most people don't even know it exists and those that do usually don't pay unless caught. California had/has a big problem with people going to Oregon and Nevada to buy cars. piano, etc to avoid or pay lower taxes.

 

Everybody knows about the CA Use Tax if they Efile which most do. You get an Efile error for CA if the Use Tax part of the return isn't checked off so you're forced to go back into the software to correct that. And it's correct CA collects the sales tax on an out of state vehicle purchase when you register it. To not pay the tax you have to prove you owned the car for some period of time before bringing it into the state like 6 months maybe, not sure. I helped a pilot years ago bring in a plane he paid about a quarter mil for and that was the deal then. He kept it in Vegas for months before registering it in CA.

 

When I go to seminars I'll run into preparers from all over the country, the big joke is which state is the toughest to deal with. It always boils down to NY and CA. I've dealt with both and yep, they can both be a bear to deal with on certain issues. To be fair more routine stuff is no problem the agents on the phone are courteous and helpful but, if you owe the tax their help is basically giving you different options to pay and they will note your account so the state won't go after your bank account. If you get a notice from the state don't be afraid to call them or get someone like me to do it for you.

 

Bob

 

Hammond SK1, Mojo 61, Kurzweil PC3, Korg Pa3x, Roland FA06, Band in a Box, Real Band, Studio One, too much stuff...
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As a business, in Virginia, each month I pay Sales and Use tax. The Use part is what you are technically supposed to pay on items you bought from out of state but "use" in Va. It's already on the books is my point. Just sayin'
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Works the same way in California. When I was manufacturing things, I would not need to pay tax on raw materials, so my resale ID was on file with Digikey, Mouser etc. Or if I did pay tax on raw materials, I would get a credit for it when I filed my sales tax return. Then at the time of sale, the final assembly was subject to sales tax, if the buyer was also in California.

 

I'm not manufacturing anymore, but still buying raw materials for engineering prototypes, and those purchases are subject to use tax if sales tax was not charged to me.

 

It took me quite a while to get this all set up in Quickbooks, because Quickbooks wasn't designed to track transactions that never occurred. For example, I was using Fulfillment by Amazon for awhile and they never charged sales tax in California, and I ended up having to eat that. In Quickbooks I would show the tax as being charged for California (because I needed that number for the state return), and then I had a discount account called "sales tax that Amazon failed to charge" that backed the amount back out so that sales amount was correct. That was the only way I could get the books to balance.

 

Fortunately I only need to file annually, and it takes a little work between quickbooks and a magic Excel sheet to get the accounting done correctly.

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