How to handle sales tax (NYS)?

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How does one deal with sales tax on supplies that go into products sold? I have been buying supplies for my clients and getting reimbursed, and then charging only for my labor. I figure sales tax gets paid on everything once, and everyone should be happy. Is this an acceptable method?
Is it possible to avoid paying sales tax on supplies, and then charge sales tax on the entire project? The net result is the same. If so, how does one get a tax exempt certificate?. (I have two for various non-profits I work with, but I suppose I should have one of my own.)
Any other alternatives? Thanks.
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Call your state dept of revenue on this. They will be happy to answer your question. You will need to register with the state to collect sales tax. You can probably only avoid sales tax on lumber and such going into a specific project. General shop supplies like sandpaper and such you will probably have to pay tax on.
In general, if you are creating a piece of furniture, you will need to charge sales tax on the selling price of the furniture.
I ran a small business and 99% of what I sold didn't require sales tax so I never collected sales tax on anything. I also never paid use tax on mail order purchases. I ended up paying $7,000 in sales/use tax going back 5 years. No penalty as I cooperated and actually did a self audit.
Brian Elfert
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writes:

Nope. Armed with his tax certificate, his materials are all tax exempt. This includes materials like sandpaper, power tools, etc.
--

-Mike-
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"Armed with his tax certificate, his materials are all tax exempt. This includes materials like sandpaper, power tools, etc. "
All supplies related to the manufacturing process are tax exempt. But unless you are re-selling the power tools then you need to pay sales tax when you purchase those items.
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You might just be right about that, but I seemed to recall that if they were used for the business that they were exempt. They did though, become assets. Are you certain about this?
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-Mike-
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Never paid tax on a machine or tool used directly in manufacturing. Tools for maintenance are taxable, as are computers, janitorial supplies. These are general state regulations, your state may vary.
Be sure to pay Use tax also. You will be audited at some point and they look for that sort of thing. Good record keeping is VERY important.
--
Ed
http://pages.cthome.net/edhome/



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wrote in message

I filled out my form #17 tonight. But what the heck is Use tax?!
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wrote in message

I don't believe we have a use tax in NY.
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-Mike-
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Oh, yes you do. Even as an individual you are liable for it. http://www.tax.state.ny.us/pdf/publications/sales/pub852_1297.pdf
Get the proper form here: http://www.tax.state.ny.us/forms/sales_cur_forms.htm
ST-100. It goes in column D
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<snip of some godawful thread about sales tax>
Here in Oregon, I don't pay sales tax on my supplies, tools or even my auto for that matter. I also am not required to send in sales taxes or file reports to the state. Then again, we have no sales tax.
Oh thank you dear Lord! It's so much easier to buy things, sell things, run a business, and live life without sales taxes. I lived in Arizona for almost 10 years and the sales tax department was like the Amish Gestapo. Some years they were all nice and friendly: "no, you do not have to pay sales tax on the film you use to shoot your professional jobs as long as you itemize, bill it to the client and collect the taxes for us." Other years they had specific business sectors all running around like scared little rabbits: "We're auditing all photographers, because there appears to be a trend of purchasing film used to shoot professional jobs under tax-exempt status. It makes no difference if the client is billed and taxed as the original film is no longer in the same form as when it was purchased - therefore the photographer is the end user." Audits, back taxes, interest and penalties.
It is soooo much easier to see a price of abucktwoninetynine, counting the change in yer pocket and forking over abucktwoninetynine.
--
Owen Lowe and his Fly-by-Night Copper Company
____

"Sure we'll have fascism in America, but it'll come disguised
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Here they give you 3% or so of the tax you collected just for filling out the forms and writing the check. What could be simpler?
Certainly not the high income tax you guys pay.
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wrote:

Well I think it all evens out no matter which state you live in - sales tax, use tax, fuel tax, property tax, income tax, it doesn't really matter, they get it in the end one way or t'other. I'm happier paying lump sums in property and income taxes than feeling nickel and dimed to death every day on every purchase.
Additionally I find it incredibly convenient for the price indicated to be the same amount of dough I pull out of my pocket at the register. And I'm happy to no longer have to deal with the state sales tax department - even if the form is simple, they (at least Arizona) had a nasty reputation with collecting requirements which, as I indicated in my previous reply, seemed to fluctuate depending on the season, the moon phase, or the budget crisis du jour. I was much more anxious about a state sales tax audit than one from the IRS.
--
Owen Lowe and his Fly-by-Night Copper Company
____

"Sure we'll have fascism in America, but it'll come disguised
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Convenient? If there's no sales tax, why can't the bozos charge six bucks versus five ninety-nine? I folded my taxes into my show prices after my daughter told me she'd never help sell again as long as I was making change. Most people appreciate that.
Death and taxes, and the occasional bond issue....
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There _are_ reasons for that 'odd amount' pricing. Grounded in psychology, not 'rational reasoning'. Research studies have shown -- repeatedly -- that: (a) people's "resistance point" to a price is almost always an 'even amount', and that it _is_ a "threshold" trigger. sales resistance is a *LOT* less if you're even "a little bit" under that threshold, vs over it. (b) *MOST* people do not compare all the way out to the _last_digit_ when comparing prices, when the 'earlier' digits are different. $19.99 vs $20.00 is _percieved_ differently than $20.40 vs. $20.41
Rational? Heck, no.
"Real world"? Heck, *yes*.
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Yeah, I took some courses in advertising. But it's still stupid.
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Welcome to the real world. <grin>
The fact remains that if you want to maximize sales, you _do_ set prices the 'stupid' way. BECAUSE the competition does it that way, you really don't have much choice about it.
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How about we eliminate pennies? Many ears ago if you bought a pack of cigarettes in a vending machine for a quarter, there were two pennies change in the wrapper. Penny candy would keep a kid happy. They are useless today.
Whenever you make a purchase under $100, the total paid should be rounded off to the nearest nickel. For purchases over that amount, round to the nearest dollar.
--
Ed
http://pages.cthome.net/edhome/



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Why not start with gasoline prices -- *still* quoted in _tenths_ of a penny?
<wry grin>
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I believe it is still used as an advertising gimmick, and a psychological trick. "Honey, look that thingamajig that would fit perfectly in my shop is less than $500, it's only $499.99". You see it all the time even on car prices, because they can honestly say that the $49,999.95 car is less than $50K. Somehow you feel better about buying a product because it costs less than some magical number, but once you are actively aware of it the trick isn't so effective any more. But, let your guard down any they have you again.
John C
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Elimination of the penny and the paper dollar would save a lot of money, and probably be a push in pocket wear. But, as with the "retail dollar" of 0.99, not likely to go away.
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