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magicman
07-24-2009, 01:58 AM
On the sales tax form for NYS, column D is "purchases subject to tax." What does that mean?

Evan
07-24-2009, 09:50 AM
I don't know what form you are referring to. But it'd refer to whatever your taxable purchases are.

If you made a sale out of state, you don't charge NYS tax on it, so it'd be a purchase that WAS NOT subject to tax. So it is whatever you sold in the state that is subject to tax.

magicman
07-25-2009, 01:53 AM
Since I will be demonstrating items, does anyone know what happens with the one demo of each item as far as taxes go?

Since it is never sold, is there never sales tax paid?

Evan
07-25-2009, 06:32 PM
Sales tax is only collected when there is a SALE.

Presumably there will be a point when it IS sold. Otherwise you'll end up keeping potentially obsolete items in inventory.

magicman
07-26-2009, 12:02 AM
If I buy something from the wholesaler for myself (ex: a large pack of magicians flash paper or a new magic box), do I pay sales tax on it? I never sold it.

If there is sales tax for it, is it the rate for the county I live in? If I purchase it wholesale, can I write it off my regular taxes on the schedule c, as if I bought it from a store?

Evan
07-26-2009, 12:11 AM
If I buy something from the wholesaler for myself (ex: a large pack of magicians flash paper or a new magic box), do I pay sales tax on it? I never sold it.

If it isn't for resale, yes, you need to pay sales tax.


If there is sales tax for it, is it the rate for the county I live in? If I purchase it wholesale, can I write it off my regular taxes on the schedule c, as if I bought it from a store?

If that company is located in your county, yes. Otherwise, probably not. If they are located in your state, they'd collect state sales tax. And if they are outside of the state, no sales tax is generally collected.

Whatever the total amount you pay would be deductible as an expense.

magicman
07-26-2009, 12:34 AM
I am confused by the second half of your response.

A wholesaler does not charge sales tax. If I order something for my self from the wholesaler (at wholesale cost) I don't have to pay tax to use it?

Evan
07-26-2009, 11:44 AM
You SHOULD be paying sales tax on items that you plan on using personally. So the time it SHOULD be collected is when the wholesaler is sending you the order.

vangogh
07-26-2009, 01:20 PM
magicman if you plan on reselling things you buy from a wholesaler you should be able to give the wholesaler your tax id so they know you are going to be reselling what you bought. Naturally you'll need to get the tax id if you haven't already done so.

Then you wouldn't have to pay sales tax when you buy from the wholesaler and you'd have to apply the sales tax when you later sell the goods.

Like Evan said if you are buying something for your own personal use then you would pay sales tax when you make the purchase. The idea is that sales tax is collected only once on an item being sold.

Evan
07-26-2009, 01:28 PM
If they gave you 200 of ITEMX, and you decide to take one or two units personally, the proper thing to do would be to pay the "use" tax when you file your personal state tax return.

Very few people actually file that return, though you run into a few honest people that feel "good" about doing the right thing.

Say you made $2,000 worth of purchases not subject to sales tax, or subject to a tax that was lower in another state (because you went there to purchase it), the USE tax would force you to pay the difference.

States don't really enforce it. But if you'll sleep better at night knowing you paid your taxes, then go ahead. I have my own thoughts on the tax issue myself! :D

vangogh
07-26-2009, 03:46 PM
I would think that would be close to impossible for states to enforce. And we probably all know people who do use their tax id just to not have to pay sales tax on their personal purchases.

Evan
07-26-2009, 04:06 PM
And we probably all know people who do use their tax id just to not have to pay sales tax on their personal purchases.

This is why many stores collect copies of resale certificates and such. On a sales tax audit, they could look at that list and go after you. Let's face it, if you are a bakery, you're not going to be reselling a new PC, printer, paper, toner, etc.

vangogh
07-26-2009, 05:52 PM
True. I used to think that there was more checks as to whether or not you would realistically be reselling the product you were buying, but apparently not. Makes sense to collect the resale certificate.

Maybe the bakery is expanding their core business and moving into new markets. :)

Evan
07-26-2009, 07:29 PM
Maybe the bakery is expanding their core business and moving into new markets. :)

As this isn't a court thing, the burden would be on you to prove that.

You are then subjecting yourself to audit by other state agencies as well... and in many instances, the state and feds do [sometimes] correspond.

vangogh
07-26-2009, 07:43 PM
We'll have to bribe the feds with cookies then. :)

Guess our fictional bakery probably isn't going to get away with buying all the components of our IT infrastructure without having to pay taxes. Or they'll find themselves in jail for bribery.

magicman
07-26-2009, 11:29 PM
If I use something for myself that was purchased wholesale, is the use tax rate for the county I am in? I assume that it is on the wholesale price I paid.

Evan
07-27-2009, 12:20 AM
Yes, it's on the price you paid. It should be on the tax rate for your county. Again, I'm not sure on the specifics of New York State. I deal with Rhode Island and Massachusetts generally, and a speckling of Connecticut and New Hampshire.