What do other Pro Sellers Do about Sales Tax?

[justafrog]

I mean on the buying end - when I sell to folks in California, I collect sales tax from them and remit it as required by the SBOE (:::looks nervously at the ceiling, expecting to see California agents descending like ninjas...)

 

But when I buy at a retail shop (i.e, Walmart, Target, the Lego Store, etc.) will they honor my resale certificate? Or am I better off not "outing" myself as a reseller?

 

I know I can get the sales tax I pay out deducted from what I have to fork over on my returns, so it's not a huge deal, I'm just curious what other folks do.

 

(Edited for spelling. Spell check told me, and I didn't listen.)

[jaisonline]

I have a reseller certificate in my state, When buying inventory from Amazon, Target, Walmart, and Yoyo, they honor my resales / tax certificate. When I buy other items for my business, stores like Lowes and Home Depot do the same. I'm very careful to only use my resale certificate for biz use. It is a pain splitting my orders but if I not and i'm audit, I'll be doomed.

My rationale...sooner or later, we'll all be required to lay sales tax. eBay is the only giant web site left not charging sales tax since they have zero warehouses.

[justafrog]

Thanks Jais - All of my buying for the book business has been at charity sales (no sales tax) or venues like auction houses that are used to dealing with resale certificates, so I wasn't sure.

 

Follow-up dumb question: When purchasing online, is there something on the screen that allows me to enter my resale number, or do you do that only at brick and mortars?

[jaisonline]

Follow-up dumb question: When purchasing online, is there something on the screen that allows me to enter my resale number, or do you do that only at brick and mortars?

Every store is diff. Amazon and Target are easy and fine online. Target requires an email while the other has you upload the certificate directly. HomeDepot.com is easy like Amazon.

Target & Lowes stores require you to bring in the cert. Lowes is a one-time deal (they keep a copy of your cert) while Target requires it for every visit

I have not tried TRU (i rarely shop there) and would never try in a lego store.

[kerrmando]

Lego stores sadly do not honor reseller certificates =/ It actually sucks bc sales tax pretty much offsets a lot of coupons etc =( 

 

We report monthly our instate sales in Virginia

[justafrog]

kerrmando, I have to check into this more fully, but it appears to me reading the sales tax agency info (state board of equilization) here in California that I can deduct the sales tax I paid on items I end up selling, from the appropriate reporting period. I have to double check exactly how that works next time I chat with my accountant, but I think at the end of the day on items I buy and resell that I'm going to be able to recoup the original purchase tax.

 

You might want to look up the situation in VA and/or have a talk with your accountant about it, if you haven't already.

[kerrmando]

kerrmando, I have to check into this more fully, but it appears to me reading the sales tax agency info (state board of equilization) here in California that I can deduct the sales tax I paid on items I end up selling, from the appropriate reporting period. I have to double check exactly how that works next time I chat with my accountant, but I think at the end of the day on items I buy and resell that I'm going to be able to recoup the original purchase tax.

 

You might want to look up the situation in VA and/or have a talk with your accountant about it, if you haven't already.

i.e. keep the receipts from sellers who don't honor that (like Lego) and you'll be able to deduct the taxes too? I'll have to ask mine that as well. Hadn't been something I'd stressed before..

[justafrog]

Exactly - I've been buying up a lot of Lego recently and keeping track of the sales tax on the receipts for that purpose. I generally do my own sales tax returns, but the next one I'll pay my accountant to do so I can see how the recouping of the over-paid sales tax works on the form.