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3 Replies Latest reply: Oct 15, 2011 4:54 PM by sbnewbie2012 RSS

sales tax out of state

chrisking Newbie
Currently Being Moderated

The company that I work for is located in Virginia.  We recently purchased some material from a manufacturer in Florida to resell to a general contractor.  That contractor happens to be working on a job in Florida.  So the material never left the state of Florida even though we were the purchaser in Virginia.  In a nutshell, Florida sold to Virginia but dropshipped to location still in Florida, shoud we be charged for Florida sales tax?

  • Re: sales tax out of state
    LUCKIEST Master
    Currently Being Moderated

    Sales tax is a consumption tax, usually paid by the consumer at the point of purchase,

    itemized separately from the base price, for certain goods and services. The tax amount is usually calculated by applying a percentage rate to the taxable price of a sale.

     

    Most sales taxes are collected from the buyer by the seller, who remits the tax to a state agency.

    Sales taxes are commonly charged on sales of goods, but many sales taxes are also charged on sales of services.

     

    Ask your accountant or try your local SCORE office.

     

    Good luck

  • Re: sales tax out of state
    ACPG_Inc. Newbie
    Currently Being Moderated

    This is actually a more complicated question than a small tax issue. It is necessary to determine whether you have "nexus" (a physical presence) in Florida. Whether you do or not depends on your specific circumstances. The FL manufacturer has to charge sales tax because they shipped the material intrastate. If you don't have a reseller certificate for FL then you just have to accept your loss on that sale. If it is determined that you do have nexus in FL, you would be required to get a reseller certificate (different states have different names so they may call it something different). You would then present that reseller certificate to your supplier and they won't charge you sales tax on their shipments to FL. But, you will then have to remit sales tax for those items sold to the state of FL, so you will be the one collecting the sales tax from your customers. The result of that is a slightly higher sales tax (because the tax is being charged on the second level sale as opposed to the first level sale). So the first thing you need to do is determine whether you have nexus in FL.

     

    You may also want to find out if the supplier has locations in any other state. Even if they ship from the FL location, if they have nexus in TX and ship the items to a customer in TX, that would trigger TX sales tax on the item that you would essentially be responsible for paying.

    • Re: sales tax out of state
      sbnewbie2012 Newbie
      Currently Being Moderated

      This will depend on the laws of Florida, which you probably can't get the best advice on in Virginia.  Are you conceeding the point that you will have to pay Virginia tax?  This is always difficult for small multi-state companies.  I think that there should be broader definitions set forth for the US.  Have you considered using Paycor?

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