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Category Archives: Sales Tax

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New states added & links updated: Sales Tax & Business Registration

The Sales Tax & Business Registration link page is up to 22 states now, & new links have been posted for some of the states that were already there:


Alabama Arizona
California Colorado
Connecticut Florida
Illinois Kentucky
Louisiana Massachusetts
Michigan Minnesota
New Jersey New Mexico
New York North Carolina
Pennsylvania South Carolina
Tennessee Texas
Washington Wisconsin


If a state isn’t there and you’d like to see links please leave a comment with the state and I’ll add it to the top of my list!





Sales Tax & Business Page–updated with more states

I’ve updated the new Sales Tax & Business Registration link page–we’ve now got info for these states too:

Colorado
Tennessee
Texas

If a state isn’t there and you’d like to see links please leave a comment with the state and I’ll add it to the top of my list!


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Sales Tax & Business Page–updated with more states

I’ve updated the new Sales Tax & Business Registration link page–we’ve now got info for the following states:


Alabama
Arizona
California
Connecticut
Florida
Illinois
Kentucky
Louisiana
Massachusetts
Michigan
New York
North Carolina
Pennsylvania
South Carolina
Washington
Wisconsin

If a state isn’t there and you’d like to see links please leave a comment with the state and I’ll add it to the top of my list!

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New: Sales Tax & Business Registration Page

Well I’ve been meaning to do this for the past few years and now that Etsy is trying to add a sales tax feature to the site there’s been an even greater need for info on sales tax & business registration requirements.

I’ve got a hundred or so links bookmarked for sales tax issues in many states that have come up in the Etsy forums and I’m putting them up on the blog’s new:

Sales Tax and Business Registration Page

So far I’ve got info for only 10 states up, but I’ll be adding to the page as much as possible. If your state isn’t there yet and you’d like to see some links for it, please leave a comment on this post with your state and I’ll put your state at the top of the list for states to be added.

I’ve got direct links to answers many of the frequently asked questions from the forums–links that take you to official government pages because I believe you should only get your answers from the authorities.

Any other place you get answers–be it forums or unofficial websites–may or may not have accurate answers, and that’s just not good enough if you want to be obeying the law.

This post from 2008 should still prove very useful in your quest for information–it lets you know what questions are asked repeatedly by sellers, so finding out your state’s answers to these questions should help you understand issues you may not have faced yet, so you’ll be prepared to handle them when they arise:

Sales Tax Questions
You Need to Know the Answers To

Here’s to everyone getting legal!



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Download Your Paypal History


Visit our Etsy shop: GoTo
Go To Great Panes, Kathryn Maloney ©2010
This post is copyrighted–you do not have permission to repost this content elsewhere but you are welcome to link to it if you’d like to share the information.

Looking for your Paypal fees history or sales tax you collected through Paypal? It’s all in the history download from Paypal!

To download your history:

1. Log in to your Paypal account & hover over the History link, click the Download History link from the pop up menu.



2. On the right there’s a box with links, click Customize Download Fields.

That allows you to control the information you get & how you get it. Be sure to select shipping amount, insurance amount, sales tax and any other information you need. Click save at the bottom of that page.

I like to download it all and save it for my business records.



3. Select Custom Date Range and put in the dates you need records from.

If you have hundreds of transactions during the time frame you select you may have to change the dates and download a few months at a time so the download won’t time out.



4. From the drop down File Types for Download menu select Tab Delimited.

I like the all activity version.



5. At the bottom click the “Download History” button.



6. When download box pops up click to save the file to your computer.

We have a folder where we keep all our business transactions, I save it there, some folks save items to “My Documents”, wherever you’ll be able to find it is fine. I give it a name that reflects the contents and the date range, for example my March 2010 file name will be: PP history 03 10.txt



7. Once you’ve saved the file, go to the folder on your computer where you saved it and change the file extension from .txt to .xls so that Excel can open it and will automatically put all the data in separate columns for you.

To change the extension right click on the file name and select rename, edit it then hit enter (on a Mac, use ctrl + click for the right click):

From: PP history 03 10.txt
To: PP history 03 10.xls



8. Double-click the file name to open it. All your transaction data should be there now, separated into individual columns.



To add up a column, for example, your sales tax:

9. Click once on the first sales tax collected entry–that selects that box (I’m not sure what the column header is as we can’t use Paypal to accurately collect NY sales tax so our file doesn’t have that column).



10. Hold down the shift key and then hold down the down-arrow key to highlight the cells until you reach the end of the numbers you want to add, then click the down arrow one more time, highlighting one empty box at the end of the column. It should look like this:



11. At the top of the page click the big funny looking E in the menu bar–that will “auto-sum” the column. It will put the total in the empty box you highlighted at the bottom of the column. It should look like this:



12. All added up! In this example the total was $3.75.



This post is copyrighted–you do not have permission to repost this content elsewhere but you are welcome to link to it if you’d like to share the information.



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Go To Great Panes, Kathryn Maloney ©2010

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Starting a Business in NY

Go To Great Panes, Kathryn Maloney ©2012


As with all information from non-official websites please check your responsibilities with your state & local authorities–I do my best to link directly to them here, but you should always go read the source yourself to be sure what you see here, or anywhere else, is accurate for you & your business.


Starting a business in NY? These will help you find out what you need to do it properly:

The Official NYS License Center (formerly done through OPAL):
See the Business Wizard link on that page for a questionnaire of what types of issues your business may be involved with, and it will present you with your filing requirements and advisory sheets.

The hardest part of using this cool tool is the first step–picking your business type. The design for this section is really poor, and after a lot of clicking I settled on Craft/Hobby Vendor since I don’t have a public location and sell both handmade and supplies. You can use the search box to put in key words to see if there’s something that better suits you.

NYS Sales Tax
In NY you must register with the Dept of Revenue (before you start to sell) to collect sales tax for your on-line sales, for live events where you are a vendor, or for your brick & mortar store if you’ll sell tangible goods to the public:
http://www.tax.state.ny.us/sbc/starting_business.htm

Please note that sales tax is a tax on the buyer and is totally separate from any income tax you will owe at the end of the year for income made through your sales.


You should also contact your city/county offices to be sure you know what local business laws there might be in your area. City/county business offices are where you’ll register your “Doing Business As” name (DBA), which is a requirement in NYS for sellers who are not selling under their given/real name:

NY General Business Code Article 9-B, Section 130

While you can achieve selling without a DBA, it’s not allowed. And if you want to open a business bank account under your business name, a DBA is what you’ll need.


Also see the links on the right for more info on the IRS, Sales Tax and business registration and more.





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Sales Tax Questions

During the course of business many sales tax issues can come up. Below I’ve compiled a list of questions that will get you the general information you need to know about your state’s sales tax laws.


Look for answers to the questions below on your state’s website, the paperwork they sent you when you registered or give them a call and ask one of your state’s employees. That’s how to best get facts about your state’s laws, not someone else’s interpretation or opinion.

There are links to official state websites in this post that should help you find the answers to the questions below:

US Sales Tax & Business Registration:
Links to Official Government Websites

Sales tax laws are different from state to state and the answers to the questions below vary widely.

There is only one law that applies to all states when it comes to collecting sales tax:

You don’t charge sales tax to buyers outside your business nexus. That is:
1. outside of the state you sell from,
2. outside of states you are registered in (if you are registered in more than just your home state) or
3. from states you don’t have a business representative in.
What does that mean?
1. Most sellers need to collect sales tax from buyers in their own state. Most states require you to register before you can collect sales tax, then collect only from in-state buyers unless 2 or 3 below applies to you.
2. If you are registered in a state other than the one you live in, you need to collect sales tax for that state too (like for doing an out of state craft show).
3. If you have a business nexus (see below) in another state you may need to register and/or collect sales tax there too, depending on that state’s sales tax laws.

What’s a nexus? The description varies a bit, but generally if you don’t have a physical presence in a state (be it a place you ship from, a public storefront of your own, a representative who presents your items for sale in a state, do a craft show in a state), you generally don’t have a business nexus there.

The questions…:


• Must I register to collect sales tax in my state?


You may think your business is too small or that you are just a hobby seller therefore you don’t need to register to collect sales tax for your state. From what I’ve seen, that’s probably not true. Many states require you register before you start selling, regardless as to whether or not you ever make a sale to someone in your state, make a sale at all or turn a profit, or whether or not you are a business or just an individual.


• Is there an amount of sales I can make before I am required to register?


Most states with sales tax require you to register straight away–rarely there’s a “You can sell $XXX worth of goods before registering to collect sales tax” rule so you need to find out what your state’s rules are for when registration is required.

Usually it’s “Intend to make a sale? Register before you start selling whether you are a business or just an individual planning on selling to the public”.


• Can I just include sales tax in my price?


Some states allow it, some don’t, and some allow it so long as you mention tax is included. There may be other stipulations, but none I have heard of off-hand.


• Can I just pay the sales tax for my customers?


Some states allow it, some don’t. Some allow it so long as you don’t advertise it.


• Can I advertise that I pay sales tax for my customers?


Some states have specific laws about publicizing that you will pay sales tax for your customers.


• What rate do I charge?


There’s two main types of sales tax for those of us in the mail-order/internet-sales business, you need to find out which of these applies in your state:

1. Origin-based sales tax: You charge the rate of where you sell from *to buyers your state*, just like when you purchase something in-person. When the package is shipped outside areas where you are obligated to collect sales tax (usually just your home state), you don’t charge sales tax.
2. Destination-based sales tax: You charge the rate of tax at the address to which you mail the package. That’s a bit of a hassle, but if that’s what the state requires that’s what you need to do. Here in NY, I must find out what county a buyer is in before I know what rate to apply.

There’s also a hybrid–some states have both state & local taxes and they require sellers to only collect the local taxes when items are being shipped within their home region (which makes it a bit like destination based sales tax–but only for those in their own area). So if the buyer is in the seller’s city or county, they collect state+city or state+county tax from that buyer, and only state sales tax from buyers in all other parts of their state.


• Are there different rates depending on the items or services I provide?


Some states have different rates for food, clothing, shoes, services… be sure to understand how they apply to your business.


• Do I collect sales tax on shipping?


In some states all shipping is taxed, in some only shipping of taxable goods (and the shipping might be partially taxable if only part of the order is taxable), in states the cost shipping isn’t taxable but any amount over the actual cost of shipping is taxable (so if you have a handling fee it would be taxed, or if you just round up the amount that would be taxable (for example from $1.72 actual shipping rounded up to $2.00, 28 cents would be taxable).


• Must my receipts to customers specify the amount of sales tax the customer paid and/or state that sales tax is included in the purchase price?


Some states require that you show how much tax the customer has paid/you paid for the customer. If the customer doesn’t know how much tax they paid, they won’t know if “use tax” is due on their purchase. (Use tax is due on purchases that should have had tax collected by the seller but didn’t. Many (most/all?) states with sales tax also have use tax which applies to internet and mail order purchases where the seller didn’t collect sales tax, though many people think that purchases from the internet are sales tax-free.)


Need help getting your business registered & finding answers to these questions for sellers in your state? Start here:

US: Sales Tax & Business Registration
–links to official state websites–

gotogreatpanes.com/blog/sales-tax-business-registration


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NY State Sales Tax Exemption Forms

Go To Great Panes, Kathryn Maloney ©2010

NY State Forms

In New York your Certificate of Authority to Collect Sales Tax is needed before you can collect sales tax from in-state customers.


If you sell taxable items from New York State (NYS) should have one regardless of how little you sell, or whether or not you consider yourself just a hobby and not a business. You then remit the sales tax to NYS according to the schedule NYS gives you. It’s quarterly the first year, then the frequency is determined by the State based on how much you collected the first year.


Your Certificate of Authority to Collect Sales Tax is also what gives you the ability to purchase certain goods without paying sales tax. You can buy as a reseller, buy supplies and tools for use in producing tangible personal property that you will sell and buy some promotional materials without paying sales tax.


To purchase eligible items without paying sales tax, you need to fill out and present the proper form–see below. Most stores will keep a copy of your filled out form on hand if you will be buying from them regularly, others want a copy for each purchase.


You should never photocopy or otherwise reproduce your Certificate of Authority to Collect Sales Tax.


Resale Certificate: ST-120

If you are buying items that are for direct resale–you won’t be making anything from them, just selling them as-is. ST-120 PDF Instructions & Form:
http://www.tax.ny.gov/pdf/current_forms/st/st120_fill_in.pdf


Exempt Use Certificate: ST-121

For purchasing “Machinery and equipment, parts, tools, and supplies used or consumed in the production of tangible personal property for sale”. PDF Instructions & Form ST-121:
http://www.tax.ny.gov/pdf/current_forms/st/st121_fill_in.pdf


Certificate of Exemption for Purchases of Promotional Materials: ST-121.2

For promotional materials that are delivered by mail to customers or prospective customers, for which there is no charge to them.
PDF Instructions & Form ST-121.2:
http://www.tax.ny.gov/pdf/current_forms/st/st121_2_fill_in.pdf


More on NYS Sales Tax exemption forms

There’s a great chart at the end of this page listing exemptions by the type of certificate:

Exemption Certificates for Sales Tax

and the chart here lists them by the type of goods is also useful:

Quick Reference Guide for Taxable and Exempt Property and Services


NYS Dept. of Revenue Forms and Publications Page:
(sales tax forms, income tax, property tax…)
http://www.tax.ny.gov/forms/default.htm


More on NYS sales tax & business law help here:

NY Sales Tax & Business Registration Information





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New York Sales Tax–continued

Go To Great Panes, Kathryn Maloney ©2010-2012
This post is copyrighted–you do not have permission to repost this content elsewhere but you are welcome to link to it if you’d like to share the information.



This post is a continuation of our “New York Sales Tax” post.

5. Employer Identification Number:

Your business may not be required to get a:

Taxpayer Identification Number (also referred to as TIN),
Employer Identification Number, EIN, or
Federal Taxpayer Identification Number, FTIN.

These all refer to the same thing, I don’t know why it goes by so many names!

You’ll need to check the IRS website to see if you have to get one–there’s a link in our “The IRS Website–Links for Businesses” post. While we didn’t need to get one, we chose to, see the linked post for my reason.

If you have an EIN and you register with NY to collect sales tax, your NY Sales Tax ID Number will be the same as your EIN. Just having an EIN does **NOT** mean you are allowed to collect NY sales tax, you must apply for a “Certificate of Authority to Collect Sales Tax” before you are permitted by the state to collect sales tax. (Links to apply for your NYS Certificate of Authority, EIN and other business info will be posted shortly.)

6. Certificate of Authority:

Having a NY Tax ID means you have a NY State “Certificate of Authority” to collect NY sales tax. (Links to apply: NY Business Info)

Certain business tool, supply & promotional purchases can be made tax exempt when you have NY tax id–see here:

NY State Sales Tax Exemption Forms

7. Collect Sales Tax from Customers, then Remit it to the State

Once you have your NYCertificate of Authority, you collect sales tax from your customers who have packages shipped to New York addresses, and report and pay the sales tax you collect to NYS.

The New York State Department of Taxation & Finance sends you the paperwork once you have been approved to collect sales tax with instructions for collecting from your customers and remitting the money you collect to NYS.

For us, the first year we were required to file quarterly. After the first year, the state assessed our business to be small enough that now we only file once a year. Sales tax is completely separate from your annual state and federal income taxes.

8. You can’t over-charge or under-charge NY sales tax.

I asked the state employees, repeatedly, in hopes of learning it would be ok to so I could either charge a higher rate and refund any overage or I could charge a lower rate and make up the difference out of pocket. The response was always no.

Along that same line, the payment receipt, like the Paypal receipt, must show the accurate amount of sales tax collected:

“You must separately state the total amount of sales tax due on any receipt or invoice that you give to your customer.”

See it on this NYS web page–the last sentence in the paragraph under “Showing the sales tax on the invoice”:

Tax Bulletin ST-860 (TB-ST-860)


Go To Great Panes, Kathryn Maloney ©2010-2012
This post is copyrighted–you do not have permission to repost this content elsewhere but you are welcome to link to it if you’d like to share the information.

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New York Sales Tax


Go To Great Panes, Kathryn Maloney ©2010-2012
This post is copyrighted–you do not have permission to repost this content elsewhere but you are welcome to link to it if you’d like to share the information.

This information doesn’t cover all areas of sales tax and when/how to apply it. This is based on my knowledge of NY State business info, and I advise you to re-check the info with NYS publications and employees yourself which is why I try to link to the info on the state website for reference.

Please-please-please–Always double check info you get on-line with the authorities.

Each state has its own regulations–posts for other states can be found here: Sales Tax & Business Registration Help

This NYS document is a great place to start, it has the basics for NY Sales Tax–it’s a PDF file:

Pub 750: A Guide To Sales Tax in New York State

Be sure to register before you start collecting NYS sales tax. NYS start up info here: NYS Business Links

Some commonly asked about NY Sales Tax issues:

1. New York has destination-based sales tax:

Destination-based sales tax means you collect sales tax at the rate where the buyer takes possesion of the goods–if you mail an item that’s the rate at the address you mail it to, not the location you mail it from/the seller is located in.

To find the tax for a specific New York address use this on-line tool:

http://www8.tax.ny.gov/STLR/stlrHome

Don’t forget to make sure your items fall under the general sales tax rate by checking the blue “Limitations on Use” link on that page. Clothing, food items and other products may not get the same rate as everything else gets at a particular location.

Limitations on Use: http://www.tax.state.ny.us/e-services/stlr/stlrinfo.htm

2. What sales tax rate do I use?

In-Person Sales–Use the Local Sales Tax Rate:

For in-person sales, you charge the state and local tax for the location where the buyer takes possession of the item.

For example, when you are at a craft show, you charge the rate based on the street address of the show. It’s still destination based–as far as the tax rate is concerned the destination is where the seller hands the goods off. See it on the NYS website here:

In-person rate is based on where the buyer takes possession.

Shipping Items You Sell–Use the Ship-To Address to Get the Rate:

If you sell through the internet, by mail or by phone, the location is the address to which the item is shipped regardless of the location of the buyer or seller.

This means that collecting the tax based on your location is not correct unless you happen to live in a zone with the same tax rate as the delivery address. (You’re also not allowed to over-charge or under-charge–see NY Sales Tax continued, link at the end of this post.)

See it on the NYS website here:

Shipped goods sales tax rate is based on “point of delivery”.

3. You can’t use Paypal’s sales tax calculator for NY Sales Tax
(nor Etsy’s sales tax feature)

NY has more than 10 different tax rates across the state based on our 60+ counties that can only be determined by using the buyer’s street address AND zip code, which means you can’t set up Paypal (or Etsy) to accurately charge NY sales tax.

Even if you put all the 5 digit zip codes for NY in the sales tax function, it will not charge sales tax appropriately for NYers because the sales tax rates are determined by political zones (counties) which are not defined by 5 digit zip codes since 5 digit zip codes can cross county lines–you’d need the full 9 digit zip code to determine the right zone. (You cannot put 9 digit zip codes in the tax calcualtor, so even if you wanted to spend a week doing it, you can’t.)

You can even have two houses next to each other in the same zip code and each has a different sales tax rate because they are in different counties and so they fall under different political jurisdictions. Here’s what we do for our NY Etsy sales:

Have Trouble with Destination-based Sales Tax on Etsy?

4. There is Sales Tax on Shipping if items are taxable:

NY sales tax is also applied to shipping charges for taxable items, unless you use a third party service to ship your items, in which case they charge you tax on their service (so you don’t charge it to your buyer).

For example, a pack and ship store will charge you sales tax on their services, and you pass that cost on to your buyer in the total cost; you don’t re-tax that amount since sales tax has already been paid on it. That’s different than when you mail an item to a buyer.

See it on on the NYS website: http://www.tax.ny.gov/pubs_and_bulls/tg_bulletins/st/taxable_receipt.htm

It gets more complicated if only some of the goods in the transaction are taxable–see here for full details:

Technical Services Bureau TSB-M-92 (2)SPDF

Commonly asked questions about NY sales tax is continued here:

New York Sales Tax–continued



Go To Great Panes, Kathryn Maloney ©2010-2012
This post is copyrighted–you do not have permission to repost this content elsewhere but you are welcome to link to it if you’d like to share the information.


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