Collecting Sales Tax

[tattoo.dan 0]

I've heard that if you pay tax to your supplier on sign materials etc. that you don't have to collect sales tax. I am in Illinois and have been a legit storefront since Nov. 1 last year. Former owner of business only collected sales tax on clothing as we don't pay sales tax when we purchase clothing. Everything else didn't get charged tax. Is this legal? All opinions welcome. Thanks

[BannerJohn 1,324]

Don't know about where you live..but in Tennessee if you sell it, you collect tax...unless the buyer is tax-exempt.

[lynnpromotions 0]

In California wholesale sales are not taxed but retail is. But, if I were to pay sales tax on materials that I resell I would still charge sales tax on the final sale for sales within the State. When I fill out my tax form at the end of the year I would account for the sales tax paid on resold items and take that off of what I owed to the State for taxes collected.

One more item, Sales tax is a levy and even if it is not collected it must be paid. There is nothing that says you must charge your customers sales tax, only that you will pay that to the governing agency that imposes it.

[tlzimmerman 11]

If you sell it, you must collect tax here.  However, when you buy it, you should be able to give a copy of your sales tax number to your supplier, and then you don't have to charge tax to you.

Wholesale is not taxed, goods should only be taxed once when sold to the consumer...or at least thats how it is here in kansas.

[hockeygirl 30]

I collect sales tax on goods, not services... so if I'm installing a banner, I'll collect sales tax on the banner but not on the installation fee. Eventually, any goods you sell (whether or not you paid sales tax on) will be taxed and anything you purchased with your reseller ID or from out of state where taxes weren't collected, you'll still pay tax, you just pay it later.

[BannerJohn 1,324]

In tenn, I have to charge sales tax on my labor. When I did business in Kentucky, I did not. So here in TN...I have to charge sales tax on the FULL price, including install. Check with your state tax people.

[Dakotagrafx 7,297]

I collect sales tax on goods, not services... so if I'm installing a banner, I'll collect sales tax on the banner but not on the installation fee. Eventually, any goods you sell (whether or not you paid sales tax on) will be taxed and anything you purchased with your reseller ID or from out of state where taxes weren't collected, you'll still pay tax, you just pay it later.

+1 in Michigan

[mabscotthandyman 1,410]

Same in West Virginia we must collect 6% tax on all services labor and material if you do not you must pay it your self you file for a tax exempt certificate number that must be filed with each vendor to be tax exempt when purchasing material then we file a quarterly report and pay the collected taxes on total sales

Dan

[sdgirl 13]

South Dakota is the same way. I just asked that question a few months back to my state tax guy. I have to file a resales tax form every 2 months. Even if you pay sales tax on the material you still have to pay it on the good sold since you are marking it up! If I get stuff from uscutter like squegees, transfer tape business use stuff. I have to claim the sales tax on that if I don't pay for it at the time also!

Christi