Three Sales Tax Tidbits for Friday

Not all states impose a sales tax. The five states that do not are Oregon, Delaware, Alaska, Montana and Hew Hampshire.

Thinking about buying or merging with an existing business? You always conduct research for hidden liabilities and sales tax liabilities are a frequent exposure area, especially if the business has sales outside of its home state. Out-of-state retail sales often ignore state registration laws and are a big deal in today’s internet based economy. Compliance continues to be a problem and states are starting to go after their money. Do your research before putting pen to paper, or risk paying somebody else’s bills.

What is use tax? When you buy a retail item, a tax must be remitted to the state; it’s called sales and use tax. If you buy a retail item at a physical store, the store adds a sales tax to your purchase and gives those taxes to the state every month. If you buy an online retail item and the out-of-state seller does not collect sales tax, tax is still owed to your state. The difference is that now you, the user, are supposed to pay the tax; it’s called a use tax. So, um, how long have you been using Amazon Prime?

Estimates for 2012; it takes a while to compile some of these stats, list the top five states in revenues lost to unpaid sales and use tax due to online sales:

California        $4,159,000,000

Texas               $1,777,000,000

New York         $1,767,000,000

Florida             $1,483,000,000

Illinois              $1,058,000,000

This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *

Featured Services:

Bookkeeping

Payroll

Taxes

Four Local CPA Offices to Serve You:
Needham, MA
Bonita Springs, FL
Cape Coral, FL
Asheville, NC