I have the same question. There are certain vendors that charges me sales tax
on goods that I intended for resale.
Do we then still charge my customers sales tax on the marked up price of
goods that I sell?
We have been doing so and then reporting all the sales tax we have collected
to the state through our monthly Sales and Use Returns. Are we doing the
right thing? It seems we are paying taxes twice but if that is the law then
that is the law.
We have a sales and use tax certificate issued by the state of MD.
Michael J. Fleming | Window Shopper |
2/28/2013 - 6:10 pm
Show Replied Text…
I have the same question. There are certain vendors that charges me sales tax on goods that I intended for resale.
Do we then still charge my customers sales tax on the marked up price of goods that I sell?
We have been doing so and then reporting all the sales tax we have collected to the state through our monthly Sales and Use Returns. Are we doing the right thing? It seems we are paying taxes twice but if that is the law then that is the law.
We have a sales and use tax certificate issued by the state of MD.
Thank you!
The way that most states would like to see this transaction done are for you
to issue a resale certificate to your vendor and then collect the full amount
of the tax from your customer. Although some states are more forgiving then
others, not following the way the state would like to see it done can
sometimes become expensive. For instance, in the state of Texas they now make
it very tough for you to claim a credit in a sales tax audit. They will often
asses the tax plus penalties and interest and then make you file a refund
claim for the tax you already paid.
JGabriel | Community Moderator |
2/21/2013 - 11:07 am
Show Replied Text…
I have the same question. There are certain vendors that charges me sales tax on goods that I intended for resale.
Do we then still charge my customers sales tax on the marked up price of goods that I sell?
We have been doing so and then reporting all the sales tax we have collected to the state through our monthly Sales and Use Returns. Are we doing the right thing? It seems we are paying taxes twice but if that is the law then that is the law.
We have a sales and use tax certificate issued by the state of MD.
Thank you!
If you sell products and your state collects sales tax, then you need to be
collecting it. As SeattleCPA mentioned, you should have obtained a
reseller/sales tax permit before you began purchasing product. You will very
likely be audited at some point and you will have to pay sales tax on all the
products you sold in the past.
If you buy a widget for resale, you don't pay sales taxes when you buy the
widget. Rather, you collect sales taxes from your customer when you sell the
widget.
For help on the mechanics of doing all this, contact the state and/or local
tax agency that you report and remit sales taxes to. In Washington state
where I live, for example, the Department of Revenue deals with both state
and local sales tax reporting and collections. So they're very happy to help
businesses get this stuff right.
BTW, some bad news: Probably if you've been selling stuff and should have
been collecting sales taxes, you now owe the sales taxes you should have
collected.
Stephen L. Nelson, CPA, Author QuickBooks for Dummies
ccalmonte | Window Shopper | 2/20/2013 - 6:52 pm
on goods that I intended for resale.
Do we then still charge my customers sales tax on the marked up price of
goods that I sell?
We have been doing so and then reporting all the sales tax we have collected
to the state through our monthly Sales and Use Returns. Are we doing the
right thing? It seems we are paying taxes twice but if that is the law then
that is the law.
We have a sales and use tax certificate issued by the state of MD.
Thank you!
Michael J. Fleming | Window Shopper | 2/28/2013 - 6:10 pm
to issue a resale certificate to your vendor and then collect the full amount
of the tax from your customer. Although some states are more forgiving then
others, not following the way the state would like to see it done can
sometimes become expensive. For instance, in the state of Texas they now make
it very tough for you to claim a credit in a sales tax audit. They will often
asses the tax plus penalties and interest and then make you file a refund
claim for the tax you already paid.
JGabriel | Community Moderator | 2/21/2013 - 11:07 am
BizResearcher | Window Shopper | 8/21/2012 - 1:38 pm
collecting it. As SeattleCPA mentioned, you should have obtained a
reseller/sales tax permit before you began purchasing product. You will very
likely be audited at some point and you will have to pay sales tax on all the
products you sold in the past.
SeattleCPA | Window Shopper | 8/20/2012 - 9:28 pm
widget. Rather, you collect sales taxes from your customer when you sell the
widget.
For help on the mechanics of doing all this, contact the state and/or local
tax agency that you report and remit sales taxes to. In Washington state
where I live, for example, the Department of Revenue deals with both state
and local sales tax reporting and collections. So they're very happy to help
businesses get this stuff right.
BTW, some bad news: Probably if you've been selling stuff and should have
been collecting sales taxes, you now owe the sales taxes you should have
collected.
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