I have a copule of questions concerning sales tax. I know that each state / county have different rules so really just trying to understand generally.
Is tax determined by where shipped as opposed to where billed? This would apply where the company is the same but they have a corporate headquaters where all bills go.
In the case of a drop shipment where I bill company A but ship to company b should I collect sales tax if I have nexus where the shipping address is?
Thanks in advance!
On 3 Aug 2005 14:02:32 -0700, in alt.accounting snipped-for-privacy@emcobr.com wrote in :
The general rule is that the place of use is where it should be taxed. For large businesses, it is often simple to get them to take care of the sales tax payments since they have to pay use tax for all purchases that didn't have sales tax collected.
wrote
Your state laws pervail. In most states it's where the physical transfer of goods takes place. So if I were to come to your store and buy something on my charge card or paid by cash or check, the transfer takes place *in your store* and the local sales tax rates apply.
If I am in your state, and order something over the internet or by phone or mail, then the sales tax rate is generally the county of destination (the location to where you ship the goods to).
If it's an out-of-state location, and you do not have nexus in that state, then you don't have to charge, collect or remit any sales tax for that state, nor do you charge your state sales tax (because it's an inter-state transaction).
Again, if it's out-of-state it doesn't mater. If its an item for resale, or materials for furtuer manufacturing, it doesn't matter.
Tax for the destination.
Generally, yes.
There are many exceptions for resale items, items to the government, items for further processing, etc.
Dear mlshaneyfelt,
As you have been informed, each state makes its own rules. As a general rule, that rule is called "point of sale."
BUT, be warned! Most states have joined a sales tax scheme euphemistically called "Streamlined Sales Tax." I call it a "euphemism" because it is anything but streamlined. It works like this. The sales tax rate is no longer based on the "point of sale," but on the "point of delivery." That means if a customer goes into an appliance store and buys a matching washer and dryer combination for each of his 4 married children and has the store deliver them and the children are located in
4 different taxing areas (counties, zip codes, etc.), the store is responsible to know and charge the appropriate sales tax for each of those areas. Then, the store must submit the collected sales tax to the state taxing agency and report the sales revenue and tax collected for each of the taxing districts.I met recently with a Senate Subcommittee on Tax Issues at the State of Utah to demonstrate that our accounting software (A-Systems Visual Bookkeeper and A-Systems JobView) had this capacity and could track and update tax tables for all of the State's taxing districts, then make the appropriate reports to the Tax Commission. There were several software companies there, but only two of us could handle Streamlined Sales Tax (SST).
The State of Utah voted to defer the implementation of SST because QuickBooks couldn't handle it. This was a new reason to be pleased with the inadequacies of my competition.
Arnold
snipped-for-privacy@emcobr.com wrote:
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