Best advise on Sales Tax and reselling.


D

Douglas

I do simple IT services and have setup Reseller accounts with a couple of
vendors/suppliers. When I purchase an item from those vendors they do not
charge me sales tax. When I invoice my client I have the sales tax on the
invoice and the amounts due are going into the correct accounts and show up
when I am ready to do sales tax payments.

Here is my question. Lets say I go to a local computer store and buy a
monitor for $150 and they charge me 8.25% local sales tax. I then sell that
monitor to a client for $190 and charge him 8.25% tax. How can I credit
myself on the sales tax that I paid when purchasing the monitor to begin
with? I don't like the idea that I send 10 dollars to the tax man when I
purchased the monitor.

Any advise or best practices is greatly appreciated.
-Douglas
 
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First thing I would do is get the proper form from your state sales tax
authority to take to the vendor so you can get approved by that vendor for
tax-free sales as a reseller (I think it is form ST 5 if you live in
Georgia)!

Doug
 
N

none

Most states allow you to deduct sales taxes paid on items for resale on
the quarterly return so you are only paying tax on the unpaid portion or
the $40 profit.

Have you looked at the sales tax return form instructions ?? I think
you'll find it there or by calling them on how to do it in your state.
 
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I

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Here is my question. Lets say I go to a local computer store and buy
a monitor for $150 and they charge me 8.25% local sales tax. I then
sell that monitor to a client for $190 and charge him 8.25% tax. How
can I credit myself on the sales tax that I paid when purchasing the
monitor to begin with? I don't like the idea that I send 10 dollars
to the tax man when I purchased the monitor.

Any advise or best practices is greatly appreciated.
-Douglas
well here in florida you just need to get your "annual resale certificate"
that the state sends you when you register with them as an taxing business.
Take a copy of it to your vendor and he will stop charging you sales tax.
It is probably the same in most states...

good luck to you.

- mark
 

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