Sales Tax Question

How exactly does the goverment collect sales tax?

[successfirst]

Hi,

I plan to sale my own brand in bulk to a retailer. I'm not 100% clear on how sales tax works. I have two questions...

1. Do I have to charge the retailer sales tax?

2. How do I pay the sales taxes collected to the government?

Thanks,
Brandon

[jbinbpt]

Where are you located? In the US if you are purchasing something for resale, then there is no sales tax on the transaction. The one who sells it to the end user is responsible for the collection of the tax.

[successfirst]

I am located in the US. Thanks, that is good to know.

[bwnbwn]

successfirst be sure and get his sales tax number this will be needed to keep you from having to pay taxes on the sale. He has to have one or you will be responsible for the sales tax.

Get a copy of his sales tax certificate for your files.

[CernyM]

It's more complicated than just that.

Most (all?) states have a website designed to help new businesses get started in their state. A topic on all of them will be sales taxes, when they must be collected, and the procedures to follow for items exempt from taxes.

You need to read up on that and perhaps call the local taxing authority.

For example, in my state, I'm required to keep records on all sales that I make, including those for which I am not required to collect sales taxes. For business to business sales that are exempt, I'm required to get specific paperwork from the buyer indicating that they are exempt and to keep that on file.

Periodically, I must submit a sales tax return with the state - even if I owe nothing.

[Chicken Carbonara]

You will need to contact your department of revenue in your state capital - you need to get a resale number and in fact, it's illegal to sell without one. In fact in New Jersey, you cannot collect sales tax without it.