With McKenzie openning a supply house in Texas, and having to fax them my Sales and Use Tax Permit, so they will not charge me sales tax on each order, made me wonder....
How do y'all handle your sales taxes, ie. what do you collect your sales tax on, the total price of your finished mount, the supplies used in the mount, etc. Also, how much is sales tax in different areas of the country?
Return to The Taxidermy Industry Category Menu
Don, Can't answer your question, but have one for you. Do you know what city in Texas they are coming to?
Just southwest of the Bryan / College Station area.
Our sales tax here just went up to 9.75% in our upstate NY county from 8.25%. So there's an ouch for you. I charge sales tax on the finished product, I'm never charged sales tax on supplies from out of state aka: McKenzie, WASCO etc. Now, because McKenzie is now in Texas now and you are ordering from them in Texas, you have to pay sales tax, bummer isn't it.
What Don is saying is that all texas taxidermists that are operating within the states "sales and use tax" guidelines need to fax a copy of their sales tax permit to McKenzie. This lets us buy from them without paying sales tax, because when you have a Texas Sales Tax Permit, you can buy your supplies "wholesale", if you will, without paying tax on them. Then, when you finish the mount, and your customer pays you for it, they must pay you sales tax. This keeps your customer from being double taxed.
So, as long as you have the Sales Tax Permit filed with McKenzie, you still won't pay sales tax on stuff you get from them.
I understand his post, no one would ever charge a customer for sales tax paid on supplies, that's a cost absorbed by the business, you can only charge him your states sales tax on the finished product. What I think what Don was eluding to is the fact he now has to pay sales tax because McKenzie is now do business in Texas and McKenzie now has to charge state sales tax to residents. And deferring the tax with the 'Sales and Use Tax Permit' is just that, a deferment, you'll still have to report/pay this when you file your quarterly/annual sales tax with your state.
is 6.75%. We have to charge our customers sales tax, but when we had a shop in Colorado we didn't have to charge our customers sales tax. Laws are different all over. NY sounds awful!
That is true, it depends on your state, I believe Texas is like NY, actually a lot of states are. They want to collect every nickel they can. That's why I order my stuff out of state, so I don't pay sales tax on supplies. Also, I've noticed at our states convention a lot of suppliers don't charge sales tax, even some of the NY suppliers..
ok people you forget that each state has different laws pertaining to how sales taxes are collected. In TX you have to have a sales tax permit to operate a business. It is your responsibility to collect the sales tax on the finished prodcuct from your clients unless you do contract work for another taxidermist (then he has to collect on the sales tax) or you do work for out of state clients (then no sales tax has to be collected).
In order to buy supplies that are being used to creat a finished product a sales tax number is required for the business selling the raw materials. It is proof to the state that the business is done legit.
So any taxidermist in the state of Texas will have to provide their sales tax number to McKenzie to avoid being charged sales taxes. It is that simple. Just give McKenzie your sales tax number and everything will be fine.
This only applies to taxidermists in TEXAS.
That is true with NY too, you have to have a sales tax ID if you are going to do business in NY, and I'd bet that's the way it is in most states (I know of at least 6). It's to bad that McKenzie is now in Texas, because now you have to pay sales tax, or defer it or whatever. I'll bet when Don ordered from McKenzie last year he didn't have to pay/defer sales tax, because they didn't physically operate in TX. That was my whole point here, maybe not worded well enough....
you should be charging tax on parts & materials only not your labor
just because McKenzie is now in TX does not mean I have to pay additional taxes. I have to collect sales taxes on my finished mounts just like before. I am required to have a sales tax ID anyway. McKenzie needs that number to NOT CHARGE me taxes. My costs are going to stay the same, my clients will pay the sales tax as they always have. NOTHING is going to change except that my shipping costs will go down.
I go to Home Depot and buy wood to make panels out of for my customers. I give Home Depot my sales tax number and get the materials tax free because it is for resale. I then collect sales tax on the finished panels from my customers. If I don't give Home Depot my sales tax number, then I have to pay sales tax for the materials I buy to make the panels out, PLUS I have to collect sales tax on the finished panels from my customers. No this is double taxation. And having a tax number on file is preventing this. That's all McKenzie is trying to do, preventing the double taxation on the sales taxes.
I understand all that, the only point I've been trying to make all along is that, when McKenzie wasn't in TX, you didn't have to give them anything (sales tax number) because THEY WERE OUT OF STATE! Like me I'm ordering from McKenzie in NC which is out of state so I pay no sales tax. That's all, back to work!
Just give them your Tax I.D.number and move on,Evelyn is correct.
Unless you are not paying sales tax to begin with.
Billy ,you are wrong,Taxidermy is a service in Texas and is Taxable on the finished mount.