Taxes. And more taxes.

[JLSleather]

As of 10/01, 43 of 50 states now collect sales tax whether they are located in your state or not.  Are we all complying with fed law?

 

[nrk]

many ppl thought trade war with china won't cost usa anything..

[Lobo]

I think I can quote President Theodore Roosevelt accurately:

"The creation of a national income tax will serve only to create a nation of liars".

"When the people find out that they may vote for themselves largesse from the national coffers the republic will degenerate to a democracy, and the democracy will degenerate to a socialist state".

Both quotes are over 100 years old now, and both are equally accurate.

I will just add this little item to the growing list of why I am happy to be retired and don't have to deal with such things anymore.

[chrisash]

Our way seems simpler but still expensive, we have VAT Value added tax of 20% and that applies on all purchases bar a few like food, books and childrens clothes. Each business that is registered basically pays the vat on what it buys and sells, it can reclaim the vat on goods it buys, by offsetting it against the selling vat, and send the dosh to the government once a month, same rate applies across all UK countries

small companies and self employed etc don't have to register until turnover is above £85,000 per year, so have to pay on goods brought but dont have to charge the extra for selling

Yours seems a bit of a nightmare with different rates etc

Edited October 6, 2019 by chrisash

[SolarLeatherMachines]

On 10/3/2019 at 3:28 PM, JLSleather said:

As of 10/01, 43 of 50 states now collect sales tax whether they are located in your state or not.  Are we all complying with fed law?

 

Almost every state has a minimum dollar amount that must be sold before sales tax for that location must be collected.  Usually that minimum is 100K.  This was done to specifically protect small businesses.  

[Mark842]

On 10/3/2019 at 2:28 PM, JLSleather said:

As of 10/01, 43 of 50 states now collect sales tax whether they are located in your state or not.  Are we all complying with fed law?

 

I don't know if we all are but I do.

[CIC]

On 10/3/2019 at 4:28 PM, JLSleather said:

As of 10/01, 43 of 50 states now collect sales tax whether they are located in your state or not.  Are we all complying with fed law?

 

My business concerns are licensed to collect sales tax.  I have yet to receive proper notice from the taxing authorities (in my case: states) of a legal obligation to collect sales tax from buyers in other (states.)  I know the big guys like Amazon & PayPal & eBay do it but that doesn't impact my business dealings.  Am I just in one of those states?

Would you be able to cite the actual federal law that you are asking about?

Thanks

[chuck123wapati]

4 minutes ago, CIC said:

 Am I just in one of those states?

Thanks

How would we know you don't say what state your in. 

[JLSleather]

Oh, I did say federal law, didn't I?  Actually, it's a nationwide issue, but not "federal" (hence, not all states).

But no, you're not in "one of those states".  It's not a question of where YOU are... it's a matter of where the BUYER is.  It's a bit of a mess, and even tax people are saying it's likely to take a few YEARS to get all of it ironed out.  

Compounded, of course, by people.  Some will say they're a "business" on social sites and to avoid paying tax on materials.  SOME of those will even bother to register with local / state entities. Then at tax time, they're "just a hobby"

If you're making a few things a month, probably well under the radar as far as minimum $ requirements.  Course, there's the question of - if nobody notices your delinquency, is it even worth being in it?  But I wouldn't rely on "i didnt get a notice".  I once "got a notice" that I owed more tax FROM THREE YEARS BACK.  You can of course argue that if you like, but you will pay it in the end ...

[JLSleather]

11 minutes ago, CIC said:

I know the big guys like Amazon & PayPal & eBay do it but that doesn't impact my business dealings

Because of the volume of sales put through those places.  They don't care about that, either.  They'll have processing costs of course, but since they're getting a significant cut of the sale without actually DOING anything to make the goods, they'll survive that. It may be that these places actually LOBBY FOR IT - since the "little guy" doesn't want to 'mess with' all that tax processing, these large sites become more of a lure.  For example, some might say -- instead of dealing with all that tax "stuff", I'll just sell on Cutesy where all that is done FOR me.  And it IS computed by that site... but you should ask your tax people how you should record that - I wouldn't know how to do that (yet). 

I only list a few things on Cutesy, and not at all on Ebay or Amazon, and if this complicates that I'll eliminate the Cutesy "store".

I use Square for card processing, seems to work well.  But I have to calculate tax myself.  Sometimes get emails about creating a Square "store", which i have not done, and I do not know if that "store" includes such tax processing.

[CIC]

5 hours ago, JLSleather said:

It's not a question of where YOU are... it's a matter of where the BUYER is.

I get this part of it, and I should tell you that I don't deal in leatherwork.  I've joined as a hobby.  I'm making the things I want and can't find anywhere.

But as a tax licensee, I won't collect any tax that I'm not mandated to collect, and if I don't receive a levee notice from the state issuing the license, there is no liability on my part.  Was there some 'Internet Sales Tax Bill (as in law)' that was passed in the last few years?  I just can't imagine the legal mechanism that would require me to collect sales tax for another state.  Like, really, if you're not in their state, they can't bring a charge against you even if you ship into their state.

Tell me tru...

[Hildebrand]

@CIC as a business person(not leather, this is a hobby) all I can say is good luck.  Just because you didn't get a notice doesn't mean you don't have to collect it.  If you look ignorance of the law is not a legal defense in most instances. If you are in business it is on you to know the laws.

Todd

[Mark842]

1 hour ago, CIC said:

I get this part of it, and I should tell you that I don't deal in leatherwork.  I've joined as a hobby.  I'm making the things I want and can't find anywhere.

But as a tax licensee, I won't collect any tax that I'm not mandated to collect, and if I don't receive a levee notice from the state issuing the license, there is no liability on my part.  Was there some 'Internet Sales Tax Bill (as in law)' that was passed in the last few years?  I just can't imagine the legal mechanism that would require me to collect sales tax for another state.  Like, really, if you're not in their state, they can't bring a charge against you even if you ship into their state.

Tell me tru...

Wayfair Vs South Dakota. Google it. On June 21, 2018, The United States Supreme Court ruled 5-4 in South Dakota v. Wayfair that states can mandate that businesses without a physical presence in a state with more than 200 transactions or $100,000 in-state sales collect and remit sales taxes on transactions in the state. Since that ruling 43 states have passed legislation and the rest are in the process. Your bigger venues like eBay , Amazon, and Etsy are collecting for the states in question whether you are above that threshold or not if you're registered as a business seller. If you are not registered as a business seller and you do over $20k and over 200 transactions in a calendar year, you will be either registered as a business seller the following year or you will not be allowed to sell. If you are selling on your own website it is kind of the wild west right now. Nobody really knows what it going on if you are selling under $100k to the states collecting (which will be all of them this year). That is not $100K total from all states, that is to each state. That put us in the position this year where we are bigger enough to be notices by some states and not big enough by some. We have elected to now collect sales tax for all states and submit them as we have decided we don't want to find out in 5-10 years that we owe a massive back tax bill. California is currently trying to collect back taxes on Amazon sellers that have sold over $100K in past years and for some the back taxes are adding up to millions.

[JLSleather]

4 hours ago, CIC said:

and if I don't receive a levee notice from the state issuing the license, there is no liability on my part.

Uh, okay.  

I have in the past received a tax bill for 3 years back.  I don't recommend NOT paying that, but each his own.  Just saying there's a curve ahead, up to you if you take the turn or not.  

Would be very simple if it was just one set amount.  Would even be bearable if it was 43 rates - one for each state.  But it's way beyond that.... breaks down by city, county, even zip code (and one city might have a dozen or so zip codes).  It's not impossible, but it IS a pain.

There are "services" to take care of all of that for you, but in the end it's YOU liable anyway, and I really don't like being responsible for it while allowing somebody else to do it.

[BigSiouxSaddlery]

12 hours ago, JLSleather said:

Would be very simple if it was just one set amount. 

This^^^

12 hours ago, JLSleather said:

I really don't like being responsible for it while allowing somebody else to do it.

And this^^^ . . .In ALL things, and even more so the older I get!!

[CIC]

16 hours ago, JLSleather said:

There are "services" to take care of all of that for you, but in the end it's YOU liable anyway, and I really don't like being responsible for it while allowing somebody else to do it.

It is amazing how many people are happy to pay 'Wells Fargo' $285/pay-period to process their payroll.

I've done well empowering businesses with programs like Peachtree or MAS and helping them to set it up properly.

Edited January 10, 2020 by CIC
copy edit

[CIC]

19 hours ago, Mark842 said:

Wayfair Vs South Dakota. Google it. On June 21, 2018, The United States Supreme Court ruled 5-4 in South Dakota v. Wayfair that states can mandate that businesses without a physical presence in a state with more than 200 transactions or $100,000 in-state sales collect and remit sales taxes on transactions in the state. Since that ruling 43 states have passed legislation and the rest are in the process. Your bigger venues like eBay , Amazon, and Etsy are collecting for the states in question whether you are above that threshold or not if you're registered as a business seller. If you are not registered as a business seller and you do over $20k and over 200 transactions in a calendar year, you will be either registered as a business seller the following year or you will not be allowed to sell. If you are selling on your own website it is kind of the wild west right now. Nobody really knows what it going on if you are selling under $100k to the states collecting (which will be all of them this year). That is not $100K total from all states, that is to each state. That put us in the position this year where we are bigger enough to be notices by some states and not big enough by some. We have elected to now collect sales tax for all states and submit them as we have decided we don't want to find out in 5-10 years that we owe a massive back tax bill. California is currently trying to collect back taxes on Amazon sellers that have sold over $100K in past years and for some the back taxes are adding up to millions.

Thanks man, this is what I was asking after.  And the part I like is where it says that 'states CAN mandate...'  Now it is up to the state to pass legislation.  So far, none of the states I'm licensed in have done so, but I'm sure it is a matter of time.

[JLSleather]

12 minutes ago, CIC said:

So far, none of the states I'm licensed in have done so,

I don't think you understood what he's telling you. 

But...

3 hours ago, BigSiouxSaddlery said:

In ALL things, and even more so the older I get!!

Including the web page.  And NOT doing it particularly well -- I'm aware that I have forgotten more than some were ever aware of.  But it does work (for the moment).  I just can't seem to bring myself to pay somebody else to set it up (though I did look into that) when in the end I have to supply and approve the content anyway!

[BigSiouxSaddlery]

3 hours ago, JLSleather said:

Including the web page.  And NOT doing it particularly well -- I'm aware that I have forgotten more than some were ever aware of.  But it does work (for the moment).  I just can't seem to bring myself to pay somebody else to set it up (though I did look into that) when in the end I have to supply and approve the content anyway!

Same!!  Which is why my webpage looks like a dinosaur and hasn't been updated since like 2006.  The lady that originally set it up doesn't do it anymore, and I've thought about scrapping it entirely, but I DO get business through it still, and I don't want to give up my domain name.  But if I could find someone to do a professional job, and put together something that doesn't look like a teenager did it, and not charge five times what I charge to do something that has taken me my entire life to learn how to do, well, I might think about it.

[CIC]

Gee, I didn't mean to give the impression that I take advantage of people.  Maybe I didn't 'splain it right.  Let me try again.

1)  I specify a suitable double-entry accounting software title (or package.)  Not mickey-mouse junk.

2)  I construct and test the necessary calculations for all applicable taxing authorities, not just sales & payroll.

3)  I oversee & assist in entering employees.

4)  I Check each calculation for accuracy.

This process has yet to exceed $500 unless an inordinate amount of hand-holding 'is insisted upon.'

I hope this improves your opinion of me.

[CIC]

10 hours ago, JLSleather said:

I don't think you understood what he's telling you.

Please specify.

[mrwatch]

I have followed this some. Many USA states now require sellers from other states to collect the sales tax and pay to the state of customers location. whether or not you have an actual store in that state.   One business article I read lady said it will cost at least $25,000  to set up a computer program and manage it.she must do a lot of sales?  In my state It falls under "use tax", I/e like if you buy something under your sales tax license then use it for personal use you must now pay the sales tax, or "removed" from inventory. How will they tract everybody I have no idea. But if you have a sales tax number and ship out of state you need to be looking into this. Use tax seems to be rationale behind the new law as it hurts the states revenue and local businesses. 

 

[Bmwmoa67707]

Amazon's (and other entities similar to them), motives are not completely what they appear to be....they "appear" to be compliant with various state sales tax laws, and that they are.  But the real benefit to Amazon, et.al., is the massive amounts of money they have in their bank accounts, that they have zero investment in, that is the sales tax monies they collect.  They remit the sales taxes due to the states every thirty days, and yes, it's probably done every day due to the unimaginable amounts of dollars they collect every day in sales tax, but they get to "borrow" if you will, massive amounts of money "free" on a monthly basis....that's why Amazon didn't object to the states requiring the collection of sales taxes.  Aside from a relatively small amount of expense to administrate the collection and remittance of the sales taxes collected, it's a HUGE win for Amazon and their ilk. 

[JLSleather]

1 hour ago, mrwatch said:

Use tax seems to be rationale behind the new law

Use tax is not the same - there has "always" been a use tax, separate and distinct from sales tax.

 

[mrwatch]

On 1/11/2020 at 8:20 AM, JLSleather said:

Use tax is not the same - there has "always" been a use tax, separate and distinct from sales tax.

 

Yes I do understand use tax. However in an online article I read it was mentioned, right or wrong. One time while shopping in Chicago a clerk said he could mail me the purchase so I would not have to pay the Illinois and Cook County taxes. But rightly I would have had to pay it to my state upon receiving it so just paid it. Which has a lot to do with so many states wanting in.