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Thread: New Sales Tax Rules

  1. #151
    pendennis's Avatar
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    Re: CA Internet Sales Tax

    Quote Originally Posted by Bob Salomon View Post
    The dealer has large signs in their booths stating Tax Free Sale or We Pay the Tax.
    They can post all the signs they like with those statements, but they still collect sales taxes if the jurisdiction requires it. Somewhere in the calculation of the dealer's profit margin, is a line where the seller calculates his profit margin. He may have $1000 on that camera, but he's already figured in the sales tax, table rental, sales overhead, etc. It may not be marked as such on your receipt, but in that $940 (net of $1000 - $60) you paid the sales tax.

    Around here, and I'm quite sure it's the same way elsewhere, the appliance and furniture stores are always running sales that state what you cited. However, they're still paying taxes to the state on their gross taxable sales.

    The same holds true for pro athletes. If a pro basketball player from Chicago, plays a game in New York City, he pays income taxes on his earnings for that game to New York City (state, county, etc.). The player from New York likewise pays income tax to the city of Chicago when he plays there. And those jurisdictions regularly audit players for compliance. The same goes for entertainers.

    Early in my finance career I was a specialist in sales taxes for our company. A friend of mine and I also ran a small business setting up books of account for professionals like doctors, lawyers, dentists, etc. Taxes of every type were always set up on the books so there was no chance of the bookkeeper making a mistake of omission. We also had a CPA as a partner, and he was as thorough an accountant as you could want.
    Best,
    Dennis

  2. #152
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    Re: New Sales Tax Rules

    Merged with existing sales-tax-on-Internet thread.

  3. #153
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    Re: CA Internet Sales Tax

    Quote Originally Posted by BrianShaw View Post
    I don’t mind paying the sales taxes I’m obligated to pay... and totally bewildered by the notion that others feel it’s such a travesty to do so as well.
    Sales tax, income tax, use tax, property tax, gas tax, sin tax, hotel tax, capital gains tax, payroll tax, gift tax, estate tax...

    Hell, I guess we should just give all our money to the gov't! They do a great job anyway . Is there an office where I can get some gov't-mandated 4x5 film rations?
    Bryan | Blog | YouTube | Instagram
    All comments and thoughtful critique welcome

  4. #154

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    Re: CA Internet Sales Tax

    Quote Originally Posted by pendennis View Post
    They can post all the signs they like with those statements, but they still collect sales taxes if the jurisdiction requires it. Somewhere in the calculation of the dealer's profit margin, is a line where the seller calculates his profit margin. He may have $1000 on that camera, but he's already figured in the sales tax, table rental, sales overhead, etc. It may not be marked as such on your receipt, but in that $940 (net of $1000 - $60) you paid the sales tax.

    Around here, and I'm quite sure it's the same way elsewhere, the appliance and furniture stores are always running sales that state what you cited. However, they're still paying taxes to the state on their gross taxable sales.

    The same holds true for pro athletes. If a pro basketball player from Chicago, plays a game in New York City, he pays income taxes on his earnings for that game to New York City (state, county, etc.). The player from New York likewise pays income tax to the city of Chicago when he plays there. And those jurisdictions regularly audit players for compliance. The same goes for entertainers.

    Early in my finance career I was a specialist in sales taxes for our company. A friend of mine and I also ran a small business setting up books of account for professionals like doctors, lawyers, dentists, etc. Taxes of every type were always set up on the books so there was no chance of the bookkeeper making a mistake of omission. We also had a CPA as a partner, and he was as thorough an accountant as you could want.
    I didnít say that no tax was paid to the State, City, County, District, etc. I said that the dealer did not charge the buyer tax. He sold product at a sale price and the dealer paid the tax.
    This was to let them make the sale and compete with mail order pricing where the mail order sale did not include sales tax on out of state sales where the mail order dealer did not have a physical location or warehouse.

    In days gone by it was a fairly common practice with retailers of high end product like camera stores, jewelers (including Tiffany) to deliver product over the counter to customers who lived out of state and ship them an empty box to save the customer sales tax. Eventually NY wised up and there was a major tax suit that the state won.

  5. #155

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    Re: CA Internet Sales Tax

    Quote Originally Posted by BrianShaw View Post
    I donít mind paying the sales taxes Iím obligated to pay... and totally bewildered by the notion that others feel itís such a travesty to do so as well.
    Working dealer shows, like the Hunt Show in Boston when Hunt rented out the entire exhibit hall and charged no admission but $1.00 for their ďshow paperĒ which was the special sales price each exhibiting company was offering at the show it was common to have consumers come to the booth with the latest edition of Shutterbug Ads magazine (its original name) to compare show prices vs mail order prices. Forgetting that they had driven to and from the show location on the wharf in Boston and paid event prices for parking.
    Hunt had all vendors sell their products at dealer cost or with a very small markup.
    They did charge sales tax except for special orders that would be dropped shipped by the vendor to out of MA locations. But all sales originally were cash only.

    Today their show is totally different then those days.

  6. #156
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    Re: CA Internet Sales Tax

    Quote Originally Posted by Bob Salomon View Post
    I didn’t say that no tax was paid to the State, City, County, District, etc. I said that the dealer did not charge the buyer tax. He sold product at a sale price and the dealer paid the tax.
    This was to let them make the sale and compete with mail order pricing where the mail order sale did not include sales tax on out of state sales where the mail order dealer did not have a physical location or warehouse.

    In days gone by it was a fairly common practice with retailers of high end product like camera stores, jewelers (including Tiffany) to deliver product over the counter to customers who lived out of state and ship them an empty box to save the customer sales tax. Eventually NY wised up and there was a major tax suit that the state won.
    While the dealer may advertise that he eats the sales tax, don't believe that the sales tax wasn't in the calculus of the selling price. Dealers and anyone else in retail should be considering every aspect of cost, from sales tax, to income taxes, to cost of the show. No one stays in business very long with out it. Now, the dealer may think he can eat the tax, but he won't be in business very long if he forgets to add all the cost elements into his selling price.

    A dealer may think he can match B&H, Adorama, Hunt, etc., but over time he's playing a fool's game. He'll get killed on the volume margins, and he likely has to mark up something else. Local dealers do this all the time. They count on folks coming in and not demanding the "meet" price.
    Best,
    Dennis

  7. #157
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    Re: CA Internet Sales Tax

    Quote Originally Posted by HMG View Post
    You can't draw conclusions about a specific tax rate without understanding the overall tax burden as well as the services provided. Those Brits may or may not be paying as much in income and property taxes as we do in the US. And I suspect those Brits aren't complaining about the VAT when they're walking out of the hospital without a bill. (Well, they probably are but shouldn't.)
    I'm an American and never walked out of a hospital with a bill other than a small deductible of a few hundred dollars. My employers always paid my health insurance and now being over 65 years old I'm covered by Medicare which I pay around $1400 a year for.

  8. #158
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    Re: CA Internet Sales Tax

    Quote Originally Posted by Drew Wiley View Post
    Just get a resale permit. It exempts materials that go into the finished product that is being sold from taxation. This would include things like printing paper and ink, matboard, framing supplies etc, but not film, chemistry, or equipment. In turn, you are expected to collect appropriate taxes from whom you sell your artwork to, and remit these. Of course, specific state laws apply, so sorting this all out going forward might get a little complicated. And Bob, there is really no such thing as "we pay the sales tax". That is just a marketing gimmick by which certain stores temporarily reduce the price of something an equivalent percent, which is generally a lot smaller amount than during a normal sale. The sales tax still has to be factored.
    If you sell your final work to an intermediary, they should be able to provide you with their resale certificate so you don;t have to collect sales tax from them as well. I use to do that in the construction field.

  9. #159
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    Re: New Sales Tax Rules

    From our Guidelines:

    Discussions of religion or partisan politics are forbidden everywhere on this Forum. More generally, this Forum is not an appropriate venue for debates over divisive social or political issues.

    This Forum is not the place for debates about tax burdens or what governments do with tax dollars.

  10. #160
    Alan Klein's Avatar
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    Re: CA Internet Sales Tax

    Quote Originally Posted by pendennis View Post
    They can post all the signs they like with those statements, but they still collect sales taxes if the jurisdiction requires it. Somewhere in the calculation of the dealer's profit margin, is a line where the seller calculates his profit margin. He may have $1000 on that camera, but he's already figured in the sales tax, table rental, sales overhead, etc. It may not be marked as such on your receipt, but in that $940 (net of $1000 - $60) you paid the sales tax.

    Around here, and I'm quite sure it's the same way elsewhere, the appliance and furniture stores are always running sales that state what you cited. However, they're still paying taxes to the state on their gross taxable sales.

    The same holds true for pro athletes. If a pro basketball player from Chicago, plays a game in New York City, he pays income taxes on his earnings for that game to New York City (state, county, etc.). The player from New York likewise pays income tax to the city of Chicago when he plays there. And those jurisdictions regularly audit players for compliance. The same goes for entertainers.

    Early in my finance career I was a specialist in sales taxes for our company. A friend of mine and I also ran a small business setting up books of account for professionals like doctors, lawyers, dentists, etc. Taxes of every type were always set up on the books so there was no chance of the bookkeeper making a mistake of omission. We also had a CPA as a partner, and he was as thorough an accountant as you could want.
    Of course the seller collects and pays the sales tax. But your amounts aren't correct. It's not $60 tax on $1000 since the $1000 also includes the sales tax despite the seller telling the public there;s no sales tax. You have to work the numbers backwards. If he collects $1000 from his customer and the state sales tax is let's say 6%, the actual product was sold for $943.40 + 6% sales tax ($56.60) = $1000. The seller must send the state $56.60. He's left with $943.40 to cover his costs, overhead and profit. To figure the tax due in situations like this, the formula is to divide the final selling price by 100% + sales tax percent to get the original net selling amount. So in this example of 6% sales tax, $1000/106%= $943.40. Sales tax: $1000-943.40= $56.60.

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