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How do I know what is taxable?

 
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Category : > Article Directory of Sales Tax Registration
Posted On : Sat Aug 29th,2009

 
How to determine about taxable and nontaxable services to calculate sales and use tax on the taxable items.
 

Department of revenue or the division of taxation and finance regulates taxable and nontaxable items and services upon which sales and use tax is charged.

 

Other than following states apply sales and use tax for tangible properties.

  1. The state of Alaska: is exempted from sales tax. Sales and use tax is not charged on tangible properties upon transfer of ownership to a new owner.

  2. The state of Delaware: is exempted from sales tax. Sales and use tax is not charged on tangible properties upon transfer of ownership to a new owner.

  3. The State of Montana: is exempted from sales tax. Sales and use tax is not charged on tangible properties upon transfer of ownership to a new owner.

  4. The state of New Hampshire: is exempted from sales tax. Sales and use tax is not charged on tangible properties upon transfer of ownership to a new owner.

  5. The state of Oregon: is exempted from sales tax. Sales and use tax is not charged on tangible properties upon transfer of ownership to a new owner.

A list of taxable and nontaxable items are printed from the state website to find out correct sales tax on the specific item.

Sales tax collection has become an important and complex subject for a vendor to determine how, who and when sales tax is charged, especially since the internet sales of taxable goods come into existence.

A vendor considers following fundamental characteristics of a sale activity to determine if the sale is subject to sales and use tax or not.

Enter taxable and nontaxable items carefully in the cash register along with current sales tax rate to charge sales tax automatically upon punching an item by the operator.

A vendor decides and notify to a drop shipper about the responsibility to collect sales tax. A drop shipping is generally a part of eCommerce sale.

The buyer provides resale certificate number to a seller to sell taxable items to an end user and does not pay sales tax on taxable goods and services.

Sales tax rules are different in each state such as sales tax is not charged on hair cutting in Nassau County, where as it is subject to sales tax in New York City. Therefore, acquaintance and awareness is essential to the sale and use tax regulation of the state  where business is conducted to calculate accurately.

Basis of  sale tax rate reveals to a buyer upon selling taxable items  including where sales tax is not charged outright such as an equipment is taxable where as the installation is not.

A business owner is personally accountable by the state for any deficiency in sales tax collection. It is paid to the department of revenue in the period it was collected by a buyer.


 

  

Nashib Umer

Author of One Magic Click Optimization


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Comments (13)
Matt Swartz   wrote on : Wed Jan 06th,2010
Hi, I was wondering if Personal Training (Fitness) services are taxable in Georgetown, Texas 78628? Thank You Matt Swartz     View Detail
Reply : infotaxsquare.com
 
Dear Matt Swartz:

First we thank you for choosing InfoTaxSquare.com for your business needs. As per our knowledge personal training (Fitness) is not subject to collect sales tax in the state of Texas. But we suggest you for verification please either contact to your accountant or attorney.

Helpful Link:https://www.infotaxsquare.com/faqs_show.php?faq=ZmFxLXNhbGVzLXRheC5odG1s&t=U2FsZXMgVGF4

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strickland   wrote on : Sun Jan 24th,2010
Hi, If I am a Maryland licensed business buying energy star products(building materials) FROM a Pennsylvania manufacturer and installing these products in maryland private residences, should I be paying the Pennsylvania manufacturer sales tax? Please note, the products I am installing meet the new guidlines/ratings to qualify for the new tax credit..."up to $1500 credit) I really appreciate any input.....THANKS, Strickland     View Detail
Reply : infotaxsquare.com
 
Dear Strickland,

Thanks for choosing InfoTaxSquare.com for your business needs. To avoid paying sales tax to the out of state suppliers you need to provide them your state id number of that sate. You can either use the following link to apply your sales tax number by using the following link or call us at 516.822.3100 for more information.

https://www.infotaxsquare.com/forms/sales_tax_vendor_id.php

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Bryan   wrote on : Fri Apr 16th,2010
Hi, I was wondering is screen printing services taxable in the state of North Carolina?     View Detail
Reply : infotaxsquare.com
 

Dear Bryan:

Thanks for choosing InfoTaxSquare.com for your business needs. Our job is limited to registration. To know about taxable or non-taxable items please either contact to your accountant or call at 1-877-252-3052 or visit @ N.C Department of Revenue.

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