5 ms·

Where can you file for sales tax reimbursement? Essentially all online resale sites (eBay, Reverb, etc.) are charging sales tax on secondhand goods. So if I bu

by jmole 6y ago

Where can you file for sales tax reimbursement? Essentially all online resale sites (eBay, Reverb, etc.) are charging sales tax on secondhand goods. So if I buy something, then sell it later, that first purchase should be considered a "resale" purchase, right?

pionar 6y ago
If you're a registered business with a tax ID number, you can deduct sales taxes paid on business inputs (supply) on your income taxes, whether personal or business.
- asdfaoeu 6y ago
  Is that all states? That just sounds like VAT
  - Tagbert 6y ago
    It should apply in all states that HAVE a sales tax. Sales tax is only supposed to be applied to the end consumer sale. There are a lot of similarities between VAT and sales tax along with the differences.
  - rahimnathwani 6y ago
    The comment to which you replied said you can deduct sales taxes paid against income taxes. I think this means that paying $10 would reduce your income tax by $3 (if income tax is 30%). This is different from getting a 100% credit ($10) which is what you'd get with a VAT system.
    - gamblor956 6y ago
      No, you don't get a 100% credit for VAT against your income taxes; the credit only exists as an offset against your VAT payable liability. If for some reason you can't offset your input VAT, then you get the same deduction against your income as you would for a sales tax, because it's part of your expenses. BUT NOTE: that if the acquired good is depreciated, then in both cases (VAT or sales tax) the tax-related deduction is spread over several years rather than all at once.
      - rahimnathwani 6y ago
        Sorry, I didn't mean to imply that you get a 100% credit against income taxes, only that you get a 100% credit. (The comment to which I replied seemed to think that GP's point - that sales tax can be deducted from income for income tax purposes - was equivalent to a credit for input VAT, which it's not.)
- gamblor956 6y ago
  You can in the sense that sales tax paid is part of the cost of acquiring the good resold. However, you can only deduct items so acquired for business purposes, not for personal purposes.
- megiddo 6y ago
  In Texas, you can deduct sales tax paid on non-taxable purchases from sales tax owed on taxable sales.
rtkwe 6y ago
Probably not unless you're filing sales tax returns regularly and the item was bought explicitly for resale. If you're not filing and selling regularly trying to buy something use it and then sell it to get a refund you're going to run into trouble with the state revenue services soon.
gravitas 6y ago
I believe there is a specific situation in that you must have purchased the goods intending resale (see the other reply explaining raw goods) of a further finished good. Buying something as a consumer, (not) using it then reselling it later is taxable.
- gamblor956 6y ago
  It's not enough to purchase the goods intending resale; you must also be registered as a reseller. In fact, if you can't provide a reseller's certificate (or license, the exact term depends on the state) then the seller generally must collect a sales tax on the sale.
  - rgbrenner 6y ago
    Correct.. and it's in that specific circumstance: where you are licensed, and for whatever reason the retailer charged you sales tax anyway on an item for resale... then you can file with the state to receive that money back. My point was that there's no reason any retailer or manufacturer would pay sales tax on the inputs for their goods.
jedberg 6y ago
When you file your state business taxes, you put down how much state sales tax you paid, and then you get it back as a credit (not a deduction), so you basically get it all back at the end of the year, if you have a resellers license. Also, some retailers let you file your resellers license with them and then they don't charge you sales tax because they know you are a vendor who is going to resell it. This system is often abused by small businesses who buy personal items along with their business items and then don't pay tax on their personal items. In theory they have to file use tax at the end of the year (the same use tax you're supposed to file if you buy something out of state and aren't taxed on it), but most people don't.
MaulingMonkey 6y ago
> Where can you file for sales tax reimbursement? Typically you don't pay in the first place, rather than getting reimbursed (EDIT: AFAIK). It also depends on the state, so I can't give a general answer. To give a concrete example, however, I'll use Washington state: https://dor.wa.gov/taxes-rates/retail-sales-tax/reseller-permits https://dor.wa.gov/taxes-rates/retail-sales-tax/reseller-per... And here's a deeper link specifically for the actual action of applying for a reseller's permit, as linked in the sidebar of the above page: https://dor.wa.gov/taxes-rates/retail-sales-tax/reseller-permits/apply-print-or-appeal-your-reseller-permit-denial https://dor.wa.gov/taxes-rates/retail-sales-tax/reseller-per... EDIT: Okay, looks like there are deductions / reimbursement options as well, TIL: https://dor.wa.gov/taxes-rates/retail-sales-tax/reseller-permits/taxable-amount-tax-paid-source-deduction https://dor.wa.gov/taxes-rates/retail-sales-tax/reseller-per...
kube-system 6y ago
On eBay, you can enter your tax exemption credentials here: https://www.ebay.com/help/buying/paying-items/paying-tax-ebay-purchases?id=4771#section2 https://www.ebay.com/help/buying/paying-items/paying-tax-eba...

by jmole 6y ago

pionar 6y ago

If you're a registered business with a tax ID number, you can deduct sales taxes paid on business inputs (supply) on your income taxes, whether personal or business.

asdfaoeu 6y ago
Is that all states? That just sounds like VAT
- Tagbert 6y ago
  It should apply in all states that HAVE a sales tax. Sales tax is only supposed to be applied to the end consumer sale. There are a lot of similarities between VAT and sales tax along with the differences.
- rahimnathwani 6y ago
  The comment to which you replied said you can deduct sales taxes paid against income taxes. I think this means that paying $10 would reduce your income tax by $3 (if income tax is 30%). This is different from getting a 100% credit ($10) which is what you'd get with a VAT system.
  - gamblor956 6y ago
    No, you don't get a 100% credit for VAT against your income taxes; the credit only exists as an offset against your VAT payable liability. If for some reason you can't offset your input VAT, then you get the same deduction against your income as you would for a sales tax, because it's part of your expenses. BUT NOTE: that if the acquired good is depreciated, then in both cases (VAT or sales tax) the tax-related deduction is spread over several years rather than all at once.
    - rahimnathwani 6y ago
      Sorry, I didn't mean to imply that you get a 100% credit against income taxes, only that you get a 100% credit. (The comment to which I replied seemed to think that GP's point - that sales tax can be deducted from income for income tax purposes - was equivalent to a credit for input VAT, which it's not.)
gamblor956 6y ago
You can in the sense that sales tax paid is part of the cost of acquiring the good resold. However, you can only deduct items so acquired for business purposes, not for personal purposes.
megiddo 6y ago
In Texas, you can deduct sales tax paid on non-taxable purchases from sales tax owed on taxable sales.

rtkwe 6y ago

Probably not unless you're filing sales tax returns regularly and the item was bought explicitly for resale. If you're not filing and selling regularly trying to buy something use it and then sell it to get a refund you're going to run into trouble with the state revenue services soon.

gravitas 6y ago

I believe there is a specific situation in that you must have purchased the goods intending resale (see the other reply explaining raw goods) of a further finished good. Buying something as a consumer, (not) using it then reselling it later is taxable.

gamblor956 6y ago
It's not enough to purchase the goods intending resale; you must also be registered as a reseller. In fact, if you can't provide a reseller's certificate (or license, the exact term depends on the state) then the seller generally must collect a sales tax on the sale.
- rgbrenner 6y ago
  Correct.. and it's in that specific circumstance: where you are licensed, and for whatever reason the retailer charged you sales tax anyway on an item for resale... then you can file with the state to receive that money back. My point was that there's no reason any retailer or manufacturer would pay sales tax on the inputs for their goods.

jedberg 6y ago

When you file your state business taxes, you put down how much state sales tax you paid, and then you get it back as a credit (not a deduction), so you basically get it all back at the end of the year, if you have a resellers license. Also, some retailers let you file your resellers license with them and then they don't charge you sales tax because they know you are a vendor who is going to resell it. This system is often abused by small businesses who buy personal items along with their business items and then don't pay tax on their personal items. In theory they have to file use tax at the end of the year (the same use tax you're supposed to file if you buy something out of state and aren't taxed on it), but most people don't.

MaulingMonkey 6y ago

> Where can you file for sales tax reimbursement? Typically you don't pay in the first place, rather than getting reimbursed (EDIT: AFAIK). It also depends on the state, so I can't give a general answer. To give a concrete example, however, I'll use Washington state: https://dor.wa.gov/taxes-rates/retail-sales-tax/reseller-permits https://dor.wa.gov/taxes-rates/retail-sales-tax/reseller-per... And here's a deeper link specifically for the actual action of applying for a reseller's permit, as linked in the sidebar of the above page: https://dor.wa.gov/taxes-rates/retail-sales-tax/reseller-permits/apply-print-or-appeal-your-reseller-permit-denial https://dor.wa.gov/taxes-rates/retail-sales-tax/reseller-per... EDIT: Okay, looks like there are deductions / reimbursement options as well, TIL: https://dor.wa.gov/taxes-rates/retail-sales-tax/reseller-permits/taxable-amount-tax-paid-source-deduction https://dor.wa.gov/taxes-rates/retail-sales-tax/reseller-per...

kube-system 6y ago

On eBay, you can enter your tax exemption credentials here: https://www.ebay.com/help/buying/paying-items/paying-tax-ebay-purchases?id=4771#section2 https://www.ebay.com/help/buying/paying-items/paying-tax-eba...