How to handle sales tax (NYS)?

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wrote:

As one who spots and retrieves most pennies I see on the ground, I'd rather get the 1 cent back than pay it for whole dollar pricing. Yes, it's a goofy mind game in pricing, but that's the way everyone does it, regardless of sales tax. It only takes 100 stoops to get a buck - helps the wallet as well as the waistline!
--
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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OK, I stand corrected in that we do have a use tax as a part of what we all think of as sales tax, but I don't see anything in the code that requires paying tax on mail order items as was the original comment that I replied to. In fact, the instructions for column D on the ST-100 specifically exempt purchases that meet the criteria for exemption of sales tax - even when purchased elsewhere. So - I'll modify my original reply to state that we are not liable for use tax on mail order tools or supplies that otherwise would have met the criteria for exemption had they been purchased locally.
--

-Mike-
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Use tax is what you pay when you buy a taxable item from out of state and the seller did not collect sales tax. Lets say you buy an answering machine from Amazon for $100. They will not charge you tax, but your home state wants their cut. You must voluntarily report and pay it. If not, if an auditor finds it you will pay the tax, plus possible interest and penalties. If you show a pattern of avoiding paying sales tax, they will be sure to audit you frequently. Yes, you have a state employee sitting in your office going over your records. Isn't being in business fun?
--
Ed
http://pages.cthome.net/edhome/



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My former business was audited once. The lady was the sterotypical government employee. She was mean, nasty, and just plain rude. I think she went to anti-charm school as a youth.
My failure to pay sales and use tax was due to lack of knowledge and not deliberate. I self audited everything prior to the current year and didn't have to pay any penalties.
Brian Elfert
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Mike Marlow wrote:

I stand corrected.
"The production exemption applies to to purchases of machinery and equipment used directly and predominantly in the production process."
http://www.tax.state.ny.us/pdf/publications/sales/pub852_1297.pdf
Thanks Mike
So no NYS sales tax on power tools. If you took the time to set up your shop as a business. Just sell a few things you make on e-bay every year:)
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A.M. Wood wrote:

Right. Some states call this "use tax", and collect it at the same rate and through the same channels as "sales tax".
Barry
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Power tools would generally be considered a capital purchase and would be taxable unless the state is exempting tax on capital purchases for manufacturer as many are.
Brian Elfert
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writes:

sales
into
Depends on what you are. If you're a contractor, then yes. If you're a manufacturer or a number of other categories defined by NYS, then no. It's spelled out pretty clearly by the state. For the shop guy who is building tables to sell, the power tools are exempt if they are predominantly used for the manufacturing work. Though it is indeed hard to believe, NYS is actually quite clear on this one... for a change.
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BZZZZT! *ONLY* materials purchased _for resale_ are legally exempt.
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Robert Bonomi wrote:

exempt.
That is what I had believed. However, according to the information posted by New York State on
http://www.tax.state.ny.us/pubs_and_bulls/publications/sales_pubs.htm
a manufacturer does not have to pay sales tax on equipment predominantly used in the manufacturing process.
See Page 14 "Sales Tax Information For: Manufacturers, Processors, Generators, Assemblers, Refiners, Miners and Extractors, and Other Producers of Goods and Merchandise (12/97)"
http://www.tax.state.ny.us/pdf/publications/sales/pub852_1297.pdf
"To be eligible for the production exemption, machinery and equipment must be used directly and predominantly (more than 50% of the time) in the production of tangible personal property..."
See Page 15 "A Guide to Sales Tax in New York State (8/04)"
http://www.tax.state.ny.us/pdf/publications/sales/pub750_804.pdf
"A manufacturer is required to register as a vendor for sales tax purposes in order to use exemption documents to purchase raw materials, machinery, equipment, parts, tools, supplies, and related services without paying sales tax on its purchases."
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writes:

does
sales
into
Not true Robert. Read the NYS code on it - it's really clear. Materials and tools used in the actual production are tax exempt.
--

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Brian Elfert wrote:

What he said is generally true here in CT.
Check with a local CPA or the tax authority. I usually find CPA's to be easier to deal with and sometimes more accurate than the folks answering the phone at the State DRS.
The rules can be slightly different for furniture vs. built-ins or finish carpentry, just as they can in regulatory issues. One is the often the installation of customer provided material (home improvement or construction), the other is sometimes called manufacturing (furniture and cabinets).
Ask a tax pro familiar with your locale. Some states require that collected sales tax be kept in a separate bank account.
Barry
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B a r r y wrote:

charge sales

does one

I work

answer
sales
going into

you
to
be
answering
improvement
(furniture
FYI
NYS Info on Capital Improvements & Repairs to Real Property
http://www.tax.state.ny.us/pdf/publications/sales/pub862_401.pdf
For a list of all of the NYS Sales Tax Publications
http://www.tax.state.ny.us/pubs_and_bulls/publications/sales_pubs.htm
PUB 750, A GUIDE TO SALES TAX IN NYS, has a link to "Important Vendor Registration Information" http://www.tax.state.ny.us/pdf/publications/sales/pub862_401.pdf
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John,
Been awhile but you may not want that tax exempt certificate. As I recall, we had to file a quarterly sales tax report and it was a pain at that time (10 years ago). May just want to pay the tax on the materials and pass that on in the cost of the project and avoid the freakin hassle with NYS.
Bob S.

then
sales
one
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recall,
that
Not so bad an ordeal Bob. The forms are really pretty simple and simple record keeping makes the forms a less than one hour effort every quarter. Having said that, there is a certain value in not providing NYS any more information about yourself than is absolutely necessary.
--

-Mike-
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John wrote:

sold?
and then

everything
Yes, this is acceptable. But I believe you need to get a Certificate of Authority from the state to collect sales tax for the labor portion.
This may be helpful. (Sales tax info is on page 18.)
http://www.tax.state.ny.us/pdf/publications/multi/pub20_703.pdf

sales
does one

work
You do not get a "tax exempt certificate" as you are not tax exempt. When you purchase the materials you indicate to the seller that you are purchasing them for resale. They will ask that you complete a resale certificate for their files and will not collect (sales tax is collected, not charged) the sales tax. Here is a copy of a NYS Resale Certificate.
http://www.tax.state.ny.us/pdf/1999/st/st120_699.pdf
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Correct - you provide your tax number which makes your purchase exempt from sales tax.
--

-Mike-
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This is in Texas but NY may not be that different.
For supplies that go in to a project such as varnish, stain, screws, I do not pay sales tax so long as it is for furniture. In Texas, The whole piece of furniture is taxable. The price you sell the piece for is taxable regardless of how much is parts and or labor. You do not have to pay sales tax on the materials for this purpose. WORDING on your invoice is very important. In Texas the sales tax laws differ greatly.
My suggestion is to call the local NY State Comptrollers Office and ask when they are the least busy. Go to that office and get set up legimately and describe what kind of business you plan on doing and exactly what you will be selling. They can tell you exactly what to pay tax on and what to charge tax on.

In Texas maybe. If the work is being done to a customers personal home/ property and cannot be removed with out also doing repairs the job is not taxable and I must pay sales tax when I pay materials. An example would be adding a wall, replacing an old fence, or adding built in cabinets.
If my work can be removed with out having to do repairs the job is taxable and I do not have to pay taxes on materials that go in to that job. Tools are taxable. Blades, drill bits and such that have a life expentancy of less that 6 months are not taxable to me when I buy them.
The net result is the same.
In Texas it is not. The sales tax on a piece of furniture that you sell would be greater than the sales tax on the materials that you bought.
If so, how does one

IIRC in Texas you must first be licensed to do business. Then go to the State Comptrollers Office and get your Sales Tax Permit.
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then
Not really.

sales
one
You go to the local municiple offices and register as a small business (DBA) and obtain an tax number. For DBA's in NY, it's typically your SSAN. Armed with that, you can now purchase tax exempt and charge sales tax based on the final product, which you have to submit to NY on a quarterly basis. Don't be late - they are not a forgiving group of people.

None needed. The DBA route is a really easy route and it works well. Simple bookkeeping - no accountant needed, just keep records, collect tax and hand it over to the state.
--

-Mike-
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Mike Marlow wrote:

Going to add some emphasis to this very important point. ALso, ALWAYS send the return Certified Mail with a Return Receipt. Save your post office receipts too. You wouldn't be the first person who filed on time and was charged a late payment penalty. Happened a lot in one company I was working for.
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