Home: Message List - Collecting Sales tax for out of state Business

Re: Collecting Sales tax for out of state Business

Santa Fe CPA — Tue, 17 Jun 2008 22:32:27 GMT

WOW!, we have really opened a can of worms with this sales tax q & a.

A few years ago, I sat in on an (I think thta itis called) "The Interstate Tax Commission" mettings where the State Tax Authorities discussed the significant problems caused them by "Quill" in collecting all the sales and use tax that they count. (It is never enough.) It will probably take a Philadelphia Lawyer to put the whole puzzle together. (Offense intended.)

The fancy word is "Nexus". What is the connection between the puchase and sale to the end user customer of a tangible product or taxable service? What is the jursidictional location of both buyer and seller? If broker Printer in FL puts together a deal between and printer job shop in GA who sells to a client in NC who has the finished job drop shipped to a customer in VA, I say that the VA customer owes use tax. If all transactions occur within the same jurisdiction then the final seller collects the tax from the retail customer and pays it over to the Renenuers.

I would look the the location of the actual final sale and change in ownership of the product.

Re: Collecting Sales tax for out of state Business

Lighthouse24 — Tue, 17 Jun 2008 22:09:30 GMT

That's another good point, DublinCPA -- it's possible that the type of printed matter being delivered would be sales tax exempt in the recipient's home state anyway. Thanks for the response!

Re: Collecting Sales tax for out of state Business

dublincpa — Tue, 17 Jun 2008 21:53:06 GMT

The few states that I have dealt with would require the business drop shipping the order to charge sales tax if sold to a reseller but drop shipped to a non exempt customer. This is very confusing for a normally tax exempt reseller invoiced by a supplier with tax.

Re: Collecting Sales tax for out of state Business

Lighthouse24 — Tue, 17 Jun 2008 21:38:30 GMT

SantaFeCPA, I'm wondering (honestly don't know) . . . if this member (in FL) brokered the job for a client in another state, and the job was actually printed in a shop in that client's home state and shipped from there, would there be any issue? I understand that if the work is printed in and shipped from FL, no problem -- but what if it were printed in another state and shipped to a client in that same state? Thanks.

Re: Collecting Sales tax for out of state Business

Santa Fe CPA — Tue, 17 Jun 2008 21:13:17 GMT

PRINTERS

No, you do not have to collect the Use Tax. That is the responsibility of your customer to pay to his tax authority.

Re: Collecting Sales tax for out of state Business

PRINTERS — Tue, 17 Jun 2008 20:32:20 GMT

Do i need to collect the use tax from that client.

Re: Collecting Sales tax for out of state Business

Santa Fe CPA — Tue, 17 Jun 2008 19:02:12 GMT

PRINTERS:

According to the "Quill" decision by the Supreme Court of the US of several years ago, unless you have some sort of a physical presence in that State you do not have to collect or pay the sales tax there. Your costomner may have a local use tax issue to contend with though.
Mailing a catalogue or having a sales rep travel through there does not constitute a physical presence.

Collecting Sales tax for out of state Business

PRINTERS — Tue, 17 Jun 2008 17:47:45 GMT

I am getting oppurtunity to send printing works to other states. Do i need to collect sales tax for the item send out of state. If Yes, How to know the taxrate for other states. I am print broker from florida.