NY Sales tax question

[Wayne Redick]

I have a company in NY who does business with a HQ of
another NY based company.They have stores in all 50 states
which I ship product to.The order orginates in NY at the
company HQ.Do I charge the HQ company NY sales tax even if
the items are shipped to thier out of NY stores? I would say
90% of orders are shipped out of NY State.

Thanks in advance for any answers or suggestions

WKR

 

[Bob Sandler]

I have a company in NY who does business with a HQ of

another NY based company.They have stores in all 50 states
which I ship product to.The order orginates in NY at the
company HQ.Do I charge the HQ company NY sales tax even if
the items are shipped to thier out of NY stores? I would say
90% of orders are shipped out of NY State.

No, you don't charge NY sales tax on goods you ship out of
state. Sales tax is based on where the product is shipped
to. It doesn't matter where the order comes from or where
the headquarters are.

 

[Shyster1040]

The better question is: why are you charging them sales tax
at all if they're purchasing your product for resale? That
sort of sale is not a "retail sale" and thus not subject to
NY sales tax; provided, of course, that they've given you
the correct exemption certificate.

However, even if you make a sale that is otherwise a "retail
sale," NY sales tax is not due on that sale if you deliver
the product to a location out-of-state.

If, however, the customer arranges for a third party to
accept the product at your NY place of business and ship it
to the customer (and probably also if the risk of loss
shifts to the customer once you transfer the product to an
independent shipper for delivery, although I haven't
researched this aspect of the question), then the sale is
most likely to be treated as having occurred at your place
of business in NY, in which case it will be subject to NY
sales tax.

For a discussion that is germane to both points above, see
NYS Tax Department Advisory Opinion TSB-A-05(28)S (available
from their website
at:http://www.tax.state.ny.us/pubs_and_bulls/advisory_opinions/sales_ao.htm).

So, the answer to your question should be: (a) none of the
sales you make to the other NY company are subject to NY
sales tax, provided they give you a proper exemption
certificate, because such sales are not "retail sales," and
(b) any sales that you make where you deliver the product to
the customer out-of-state (e.g., either you directly deliver
it, or you bear the risk of loss until it reaches its
destination if you ship it via a third-party delivery
service) are not subject to NY sales tax in any event,
whether or not they're "retail sales."

However, keep in mind, my remarks are based solely on the
limited facts you've given; please don't do anything rash
and rely solely on my statements without at least checking
out the NY publications on the sales tax, and preferably
without first speaking to your accountant on the basis of
all the facts involved (e.g., what your usual shipping &
delivery process is, who bears the risk of loss and up to
what point, etc...).

 

[Wayne Redick]

The better question is: why are you charging them sales tax
at all if they're purchasing your product for resale? That
sort of sale is not a "retail sale" and thus not subject to
NY sales tax; provided, of course, that they've given you
the correct exemption certificate.

However, even if you make a sale that is otherwise a "retail
sale," NY sales tax is not due on that sale if you deliver
the product to a location out-of-state.

If, however, the customer arranges for a third party to
accept the product at your NY place of business and ship it
to the customer (and probably also if the risk of loss
shifts to the customer once you transfer the product to an
independent shipper for delivery, although I haven't
researched this aspect of the question), then the sale is
most likely to be treated as having occurred at your place
of business in NY, in which case it will be subject to NY
sales tax.

For a discussion that is germane to both points above, see
NYS Tax Department Advisory Opinion TSB-A-05(28)S (available
from their website
at:http://www.tax.state.ny.us/pubs_and_bulls/advisory_opinions/sales_ao.htm).

So, the answer to your question should be: (a) none of the
sales you make to the other NY company are subject to NY
sales tax, provided they give you a proper exemption
certificate, because such sales are not "retail sales," and
(b) any sales that you make where you deliver the product to
the customer out-of-state (e.g., either you directly deliver
it, or you bear the risk of loss until it reaches its
destination if you ship it via a third-party delivery
service) are not subject to NY sales tax in any event,
whether or not they're "retail sales."

However, keep in mind, my remarks are based solely on the
limited facts you've given; please don't do anything rash
and rely solely on my statements without at least checking
out the NY publications on the sales tax, and preferably
without first speaking to your accountant on the basis of
all the facts involved (e.g., what your usual shipping &
delivery process is, who bears the risk of loss and up to
what point, etc...).

Thanks for the reply.
I should have mentioned the product is not for resale by
customer.And NYS Taxation dept helpdesk told me the same
thing you replied with.

Gracias!
WKR

 

[Wayne Redick]

I have a company in NY who does business with a HQ of

No, you don't charge NY sales tax on goods you ship out of
state. Sales tax is based on where the product is shipped
to. It doesn't matter where the order comes from or where
the headquarters are.

I wish my accounts girl knew this beforehand. So much for
hiring family members eh?

WKR

 

[Shyster1040]

""NYS Taxation dept helpdesk told me the same thing
you replied with""

That may, or may not, mean that I got the right answer ;^).