The post U.S. Sales Tax Guide first appeared on Chamber of Commerce.
]]>When a consumer or business buys almost anything, it has a sales tax on it. Every state has its own tax rate. Additionally, each county in each state can also add a percentage on top of the state’s sales tax. If you are a business buying something for resale or an ingredient or materials to make something for resale, you do not have to pay sales and use tax on most items, but you must have a tax certificate from the state.
The government imposes a consumption tax on goods and services. The sales tax is not included in the price of the item or service but added to at the point of sale. The taxpayer/retailer collects the tax and forwards it to the state’s department of revenue. Every business must collect the tax amount in its jurisdiction, pursuant to the laws of the business’s jurisdiction.
When running a business, the owner must know when to collect sales and use taxes and how much to collect on each sale.
A business that provides goods and services should know the terms associated with its sales tax liability.
A use tax is a sales tax that a customer purchasing goods from a state other than his or her home state pays. The tax amount is the percentage that the person pays in his home state. For example, if a consumer lives in Tennessee and purchases something from California, he pays Tennessee tax on the product he purchases. However, if the purchase is not taxed in his home state, he does not pay taxes and does not include the purchase in his use return.
The retailer collects the use tax and files a use tax return. Use tax rates might be different from your state’s tax rates. Tax filers should always check on the various use tax rates when conducting business with out-of-state customers.
Every state has laws that determine taxable goods. In many jurisdictions, many grocery items are not taxable. Some jurisdictions even have different tax rates for different items. For example, a grocery store might tax groceries at one rate and cleaning products at another rate.
In many jurisdictions, businesses do not have to collect tax for certain services. If the service is combined with items, the items are still taxable. For example, depending on its location, an auto repair shop might not charge tax on labor but must charge tax on parts.
The first income tax was levied in 1894 and was known as the Wilson-Gorman Tariff. However, Charles Pollock sued, stating the tax was unconstitutional. The Supreme Court found in favor of Pollock (Pollock v. Farmers’ Loan and Trust Company, 157 US 429 (1895) because the Tariff was a direct tax on property owners and not apportioned among the states, which is unconstitutional.
In 1913, the U.S. Constitution was ratified to include that Congress could levy taxes on any income “without apportionment among the several states, and without regard to any census or enumeration.” The Sixteenth Amendment then passed, which overturned the ruling in Pollock and reinstated the federal income tax.
Since then, changes have been made, and now we pay income tax under Title 26 of the United States Code (26 U.S.C.). Everyone is subject to income tax, including businesses. The amount of income tax you pay is based on the amount of income you have.
A local sales tax is an extra percentage a city or county implements. It is added to the state sales tax. Thus, if the state’s tax is 7 percent, and the county you live in levies a 2-percent tax, your total tax is 9 percent. All retailers in the county must collect 9 percent on every taxable sale.
The state levies a sales tax on goods and services. Retailers in all jurisdictions must collect this tax at a minimum. Depending on state and local laws, counties and cities can also add sales tax to the state tax. The local taxes are paid to the local jurisdiction, and the retailer pays the state tax to the state.
On top of income taxes, businesses must also pay self-employment taxes to cover Social Security and Medicare. In most cases, those who work for themselves pay self-employment tax as it is not collected elsewhere. If a business makes more than $400 from self-employment income or more than $108.28 in wages from a church, it must pay self-employment taxes. Ministers and members of religious orders are exempt from the self-employment tax.
Additionally, a business must pay Social Security and Medicare taxes, federal income withholding tax, and federal unemployment tax if you have employees. Most of these taxes are deducted from the employee’s paycheck, though the employer pays a percentage of the Social Security and Medicare taxes.
Those who operate certain kinds of businesses must also pay an excise tax, including those who:
Manufacture or sell certain products,
Use certain types of equipment,
Offer certain services, and
Use various products or facilities.
The excise tax has many categories of taxes, including:
Environmental, fuel, air transportation, communications, and the first retail sale of tractors, heavy trucks, and trailers.
Certain trucks, buses, and truck tractors with a taxable gross weight of 55,000 pounds or more if those items are used on public highways.
Gambling and lottery activities.
Motor fuel.
Sales tax is governed by several jurisdictions, including state, county, and city. In some aspects, federal laws also govern the tax, such as when a company sells goods and services to the federal government.
Sales tax is not the only tax a business pays – it has federal income taxes it must also pay. All businesses except partnerships must file an annual income tax return. Partnerships must file an information return. Everyone, including businesses, must file income tax as it is earned. In most cases, individuals and businesses must estimate the income taxes due and pay them quarterly. Those who do not pay quarterly taxes pay a penalty for “late taxes” when filing income taxes.
Businesses also pay state and local taxes. These taxes depend on the jurisdiction and the type of industry. For example, someone handling oil, gas, or hazardous chemicals pay a local tax on the disposal of these types of items.
Types of taxes businesses might pay include:
Income tax.
Self-employment tax.
Excise taxes.
Property tax on business property (real estate).
Payroll taxes.
State income taxes, where applicable.
Gross receipts taxes, where applicable.
Dividend taxes on corporate shareholders.
Sales and use taxes.
Agricultural land taxes.
Amusement tax (for amusement parks).
Securities transaction taxes.
Tobacco and alcohol taxes.
Stamp taxes.
Vehicle license tax.
Land value tax.
Not all jurisdictions require all of these taxes, and not all types of industries require all of these taxes. Check with a local attorney to determine which taxes a particular business needs to pay before starting a business.
Every state has exemptions for sales tax. Common exemptions include medicine and food. If a jurisdiction does not have a complete exemption, it taxes the items at lower rates. Additionally, depending on the state or local jurisdiction, some sales transactions are exempt from the tax. The jurisdiction bases these exemptions on the type of property, the purchaser’s identity, and what the property will be used for.
Most states exempt certain commodities that people need to survive, such as food, medical devices, and medications. Some states exempt clothing, while others charge a lower or full sales tax rate. Some states also have a partial tax on certain food items, such as grocery ingredients like flour or meat, while boxed dinners, candy, and soda are fully taxed.
Depending on the industry you are in, you might sell one or more of these items and could have more than one tax rate, depending on your business’s jurisdiction.
While most sales tax is based on state law, federal law has its fingers in the pot. A state cannot impose a tax on property sold to the federal government and some of its agencies. In some states, a city, county, or other local jurisdiction cannot impose a sales tax on goods and services sold to the state.
For example, a business that makes non-stick bandages might sell to the U.S. government for use by VA hospitals and on-base hospitals, and doctor’s offices. These items would be non-taxable, but the same items sold to a private medical establishment would be taxable.
Certain industries, such as industrial processing, agriculture, and manufacturing, are exempt from paying sales tax. A state with a heavy farm presence might not charge farmers a tax on goods needed to produce the farmed products, including machinery and other equipment used for harvesting or otherwise used on the farm.
Additionally, most states allow products that are used for resale to fall under tax exemption laws. Because the state assesses the taxes on the retail sale, it would double tax an item if the retailer bought it to make something for resale.
For example, a small business makes hats for resale. That business would be able to purchase the products used to make the hats without paying sales tax. However, that business must pay the tax when it sells its hats.
The purchaser of a service or product must prove that his or her purchase is exempt from sales tax. The state issues tax certificates to those exempt from paying the tax. Some states also issue a certificate that shows that a business pays sales tax directly to the state rather than through individual purchases at retailers. The certificate allows those purchasing items for resale to buy those items tax-free. They must, however, charge tax when they resell the items.
A business can apply for a sales tax credit if:
It overpaid sales tax.
It paid tax on certain transactions by mistake.
It collected sales tax from customers but returned the tax to the customer.
The credit reduces the next tax payment you make.
First, a nexus is a relationship between at least two entities. Since we are talking about sales taxes, the nexus is the relationship / presence between your business and the state, county and / or city that collects the tax. These jurisdictions cannot tax you without that relationship. The nexus is the presence you have in a certain jurisdiction.
The U.S. Constitution creates the tax nexus in the due process clause, which requires a connection, and the commerce clause, which “requires a substantial presence.” A nexus also describes the degree of the business present in a state.
Generally, having a tax nexus means that a business maintains an office, employs workers, and / or stores products and supplies in a warehouse in the state.
For federal tax purposes, you have a nexus if:
The business’s income comes from sources in a state,
The business leases or owns property in the state,
The business has capital assets in the state, and / or
The business has employees engaged in activities that are more than “mere solicitation” in the state.
For sales tax nexus, the rules aren’t as stringent. A business must have a physical location, have employees that are residents of the state working for it, own property – real or intangible – in the state, or have employees who solicit business (salespeople) in the state.
Adding online transactions has made “nexus” more complicated. Because the “old” way required a business to have a physical presence, people buying goods online often got away without paying sales tax. The states were losing a lot of revenue because online businesses did not meet the physical presence requirement to have a tax nexus within a state.
In June 2018, the Supreme Court ruled that states had a right to collect sales taxes from online sellers in S. Dakota v. Wayfair. A business no longer needs a physical presence in the state if it sells products online.
The states that have sales taxes set up procedures to allow businesses to collect the taxes from online sales. Some states have a minimum number of transactions or amounts per year that bar collecting sales tax.
In other words, if an online business generates less than a certain amount or number of transactions per year, it does not have to pay tax on those transactions.
To determine whether a business has an online sales nexus, it will need to review the rules for its state. Common ways the states determine whether businesses should charge sales tax for online sales include:
Considering a click-through as a direct connection between the seller and buyer, such as through a referral link.
Through affiliate programs, such as Amazon’s affiliate program.
You sell over a certain amount or have a certain number of transactions. For example, Idaho has a minimum sales nexus of $100,000 per year.
Every state has its own sales tax rate. Additionally, counties and cities could add a small percentage to the state’s tax rate. A business should familiarize itself with all local and state sales tax laws, including the differing tax for certain products. State and local sales tax might fluctuate frequently, so check constantly to ensure that the business charges enough tax to cover the tax due on its tax forms.
When calculating sales tax revenue, a business might have different taxes for different items. For example, some states charge one percentage for clothing and material goods and another rate for groceries. Always review the tax rates for your state, county, and city.
Sales made in the store might have a different tax rate than online sales. In-state sales might have a different rate than out-of-state sales. Make sure you know the rules for all retail sales of goods and services.
Set up point of sale software to add the requisite sales tax to each item scanned. This way, you and your employees won’t have to remember which items have different tax percentages.
If a business does not have a point of sale and calculates everything by hand, it will have to know the appropriate amount, figure the percentage and add it to the sales price. Some states do not allow you to incorporate the sales tax in the price of the service or product, so be careful of selling items or services “all-inclusive” and figuring out the tax later.
State laws tell a business how often it must file sales tax returns. Many states require that you file them monthly.
Check your state’s laws for tax return due dates. Some states require them to be postmarked by the due date, and some want the returns processed by the due dates. If your state allows electronic filing, that is the best way as you can send payment electronically, and it is marked as received as soon as the state receives the return.
Yes. Check with your state laws to find out if you sell any product or service that is exempt. Otherwise, almost everything is taxable.
File your sales tax when your state tells you it is due. Many states require that you file sales taxes every month.
No. Some states allow exemptions for certain items. Be sure to check your state’s laws for items and services that are exempt from sales tax.
You must complete and file a sales tax return that includes all taxable sales.
Most products and services are taxable, though retail sales tax depends on state and local laws. However, if a business purchases goods for resale, it must have an exemption certificate to not pay double sales tax. Paying taxes on an item when a business purchases it, then paying taxes on it again when it sells the item or a product created with the item is double taxation.
Add up the sales tax you collected from your customers. This is the amount of tax the business owes. If the business did not charge tax on a taxable item, it must also include the tax on that item, even though it did not collect it from the customer.
You must charge sales tax as dictated by state and local laws.
It depends on the type of business they have. Some businesses are required to pay additional taxes because of products they work with or services they provide.
If a state, county, or city requires it, a business must obtain a seller’s permit or license. Sometimes, the business might have to pay for a state license, a county license, and a city license.
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]]>The post Virginia Sales Tax Guide first appeared on Chamber of Commerce.
]]>Virginia does not have one rate for the entire state. Most of Virginia’s sales tax is 5.3 percent. However, some areas have different sales tax rates. The state also has several special and excise taxes. Virginia also uses e-Forms to file taxes. You do not have to register for an account. The state requires that you remit payment electronically – it does not accept paper checks.
This guide does not fully describe all of Virginia’s laws and regulations regarding taxes. Businesses should contact a business attorney or visit the Virginia Department of Revenue website to learn more about the rules, regulations, tax laws, and tax information associated with their industries and the types of taxes due.
In addition to Virginia’s sales and use tax, the state has several other taxes, including a motor vehicle rental tax, peer-to-peer vehicle rental tax, and a food tax.
Virginia’s sales tax structure is a bit different from most other states. Most of state has a 5.3-percent sales and use tax rate. However, the following jurisdictions have their own tax rates:
7 Percent
6.3 Percent
6 Percent
In most regions in Virginia, retailers must add the 5.3-percent sales tax to wines and distilled spirits. Additionally, distilled spirits have a 20 percent state tax built into the retail price, and wine has a 4-percent state tax plus a $0.40 per liter wine tax built into the retail pricing.
Furthermore, the state levies a 2.5-percent sales tax on non-alcoholic beverage items. The retailer must add this tax at the register. A 5.3-percent sales tax is levied on non-food and beverage items in regions not mentioned below. This tax is also added at the register.
Instead of the 5.3-percent sales tax, the following regions have their own sales tax that retailers must add for retail sales of alcoholic beverages:
Motor vehicle rental companies must add Virginia’s motor vehicle rental taxes to any vehicle rented for less than 12 months. The taxes are as follows:
Businesses renting motor vehicles must collect all three taxes for a total of 10 percent. Exempt charges include:
Businesses can register to pay motor vehicle rental taxes online or by using tax form R-1, Business Registration Application.
Peer-to-peer rentals, such as Uber or Lyft, file Form P2P tax return. If the platform has more than 10 vehicles registered to the business, the rental rates are the same as the motor vehicle rental rates above. Businesses with 10 or fewer vehicles registered to their platform pay a 7-percent tax.
Businesses must file online or request an electronic filing waiver request.
A business that has yearly gross receipts of:
Business taxpayers in all areas of Virginia must collect and pay 2.5 percent sales tax on food and personal hygiene items.
Virginia levies a tax on beer and wine coolers at the per barrel rate. The tax is paid by the bottler, manufacturer, or wholesaler upon the sale to licensed retailers. The taxes are as follows:
The tax does not apply to beer and wine coolers that are shipped out of state for resale in another state or products sold to the United States Government, Department of Veterans Affairs, post exchanges for the United States Armed Forces, and otherwise exempt organizations.
Most consumers do not see the motor fuels taxes as the taxes are levied when the fuels leave the terminal rack. The state also has a storage tank fee. The following tax rates are per gallon:
Additionally, a wholesale sales tax of 2.1 percent is levied on fuels sold in Northern Virginia and the Hampton Roads Planning District Commission area.
Virginia levies a communications sales tax and additional taxes for telecommunications services, including:
Virginia has several agriculture taxes, including:
Virginia taxpayers must file and pay sales tax electronically. The filer can choose to use eForms, a business online services account, or web upload.
You do not need a password or an account to use eForms. They are similar to the paper version. The web upload method uses a file you upload. This is more convenient for businesses with several types of taxes or more than one location.
Virginia figures your sales tax due date filing frequency. Monthly filers must remit taxes on or before the 20th of the month following the collection month. Quarterly filers must remit taxes on or before the last day of the quarter (March 31, June 30, September 30, and December 31).
State sales tax returns are due even if a business did not have any reportable sales during the collection period.
Virginia had a sales tax holiday in 2021 but has not listed dates for 2022 as of yet. Businesses can check the Virginia Tax website for upcoming dates.
Remote sellers and marketplace facilitators must register to pay Virginia’s sales taxes if their gross receipts are over $100,000 or they had 200 or more individual transactions for the previous year. While small businesses do not have to collect or register to pay taxes, most do as a convenience for the customers.
If a consumer purchases taxable tangible personal property from an out-of-state seller and does not pay taxes, the consumer must pay the use tax on the items.
Virginia’s sales tax is 5.3 percent in most places. Certain counties and cities have different tax rates.
Businesses that need an exemption certificate for reselling goods can print the resale certificate. The purchasing agent must give a completed copy to the seller and keep a completed copy for the business’s records.
The post Virginia Sales Tax Guide first appeared on Chamber of Commerce.
]]>The post Utah Sales Tax Guide first appeared on Chamber of Commerce.
]]>Utah’s sales tax rate is 4.85 percent of retail goods and some services sold. Local jurisdictions also have a sales and use tax rate. Additionally, the state has excise and special taxes for certain industries. Consumers pay either the sales tax or the use tax. If a consumer does not pay sales tax on taxable tangible personal property, the consumer must pay the use tax.
This guide does not fully describe all of Utah’s laws and regulations regarding taxes. Businesses should contact a business attorney or visit the Utah State Tax Commission’s website to learn more about the rules, regulations, tax laws, and tax information associated with their industries and the types of taxes due.
In addition to Utah’s 4.85-percent sales tax rate, businesses must collect certain excise taxes and local taxes.
Businesses must charge the state tax rate on sales of tangible personal property and some services. If a local municipality has an additional tax rate, the business adds the local rate to the state’s rate. Certain industries also have taxes – some may be in lieu of the state sales tax, and some may be in addition to the state and local tax rates.
Utah does not have a wine and liquor tax. However, retailers must collect sales tax on the sale of liquor, wine, and beer.
All short-term motor vehicle leases of 30 or fewer days are subject to the motor vehicle rental tax of 2.5 percent. The tax is addition to state and local sales tax, municipal fees, and other taxes. For example, on a rental bill of $100, the business would charge the 4.85-percent sales tax, the local tax, and the 2.5-percent motor vehicle rental tax. If the local tax is 1 percent, the total tax is 8.35 percent.
Temporary lodging is subject to the state sales tax and a transient room tax. If a person rents a room for fewer than 30 consecutive days, that business must collect the tax. Temporary lodging includes:
The transient room tax is based on the business location in the state and could include:
Utah levies the state sales tax on admissions for entertainment, amusement, exhibition events, recreation, athletic activities, and cultural activities. Common taxable activities include admissions to:
Utah has several motor fuel taxes, including:
Additionally, the state levies an environmental assurance fee of $0.0065 per gallon.
Prepared food is subject to Utah’s state sales tax rate plus local jurisdiction sales tax. Groceries are taxed at the lower rate of 3 percent, regardless of location.
In addition to the regular sales tax, restaurants must collect a 1-percent tax on all sales of food and beverages. Bars and taverns are also subject to the state sales tax and the 1-percent extra tax.
Many of Utah’s localities have additional sales and use taxes, including:
Those who live in certain impacted communities are exempt from paying the resort communities tax and the state correctional facility tax. However, they must still pay sales tax. Items that are affected include:
The impacted communities are:
Utah does not have a sales tax holiday.
Remote sellers and marketplace facilitators must pay Utah sales tax for any retail sales into Utah if they:
In most cases, businesses that do not meet these criteria register for a Utah sales tax account and collect and remit taxes as a convenience to their customers. Consumers who purchase taxable tangible personal property from businesses that do not collect taxes because they do not meet the financial nexus must pay Utah’s use tax and file a use tax return.
Register for a tax account online to file tax returns and remit payments.
Utah’s sales and use tax returns are due based on how much tax you collect:
A new business estimates the amount of tax liability when it applies for a license. The Utah State Tax Commission will assign the taxpayer business a filing status. The Commission reviews all accounts yearly and notifies a business if its filing status changes.
Utah’s state sales and use tax is 4.85 percent. Local municipalities also have various taxes that businesses must add to the state sales tax. Additionally, certain industries must also pay various taxes.
Utah has several exemption certificates. Businesses should print out the appropriate resale certificate or exemption certificate. Tax form TC-721 is generally used for the resale of tangible personal property. Businesses should keep a copy of the form they give to sellers.
Apply at tap.utah.gov or use the OneStop Business Registration page at osbr.utah.gov.
Yes. You must file a zero return if you did not have any sales, or you will receive a billing notice. If the business closed, file form TC-69C, Notice of Change for Tax Account.
Yes. Utah does not allow tax licenses to transfer. The seller needs to provide you with a Letter of Good standing from the Utah State Tax Commission showing that the business does not owe special fuel taxes or sales tax. If the seller owes taxes, withhold the amount of unpaid tax from the purchase price, then pay that amount to the Utah State Tax Commission.
The post Utah Sales Tax Guide first appeared on Chamber of Commerce.
]]>The post Vermont Sales Tax Guide first appeared on Chamber of Commerce.
]]>Vermont’s sales and use tax is 6 percent on retail sales of taxable tangible personal property and some services. The use tax is the same as the sales tax. The consumer pays one or the other taxes. Vermont also has some taxes in local jurisdictions and some specialty taxes.
This guide does not fully describe all of Vermont’s laws and regulations regarding taxes. Businesses should contact a business attorney or visit the Vermont Agency of Administration Department of Taxes website to learn more about the rules, regulations, tax laws, and tax information associated with their industries and the types of taxes due.
Vermont has several excise taxes and local taxes in addition to the sales and use taxes.
In addition to the sales tax rate of 6 percent, consumers must pay a 6-percent use tax if they purchase taxable tangible personal property without paying the sales tax. For example, if a business purchases a pallet of a product for resale and uses a case of the product, it must pay use tax on the case it used.
Retailers of alcoholic beverages must obtain a tax account and a liquor license. The business must post the license where customers can see it. Retailers can obtain licenses from the Vermont Department of Liquor Control.
If a restaurant sells alcohol for takeout, it must charge a tax of 10 percent on the alcohol. “Restaurant” includes:
The 10-percent tax also applies to alcohol served for immediate consumption. If the alcohol is being delivered, the delivery fee is part of the meal price and is also taxable. If a receipt is not itemized, delivery charges are taxed at the highest rate of the alcohol tax instead of the meal tax.
Grocery and convenience stores must collect an alcohol tax of 6 percent when selling alcohol, whether for pickup or delivery. The tax applies to alcohol that is suitable for human consumption and contains one-half of 1 percent or more of alcohol by volume.
Malt beverages and spirituous liquors are subject to a 10 percent alcoholic beverage tax.
Vermont also has a tax on beer and wine sold by wholesale dealers to retailers. If a manufacturer sells beer and wine directly to the public, the manufacturer pays the tax on those products. The beer and wine tax is as follows:
Additionally, wholesalers must pay a tax on spirits and fortified wines as follows:
Grocery stores and convenience stores that sell liquor and beer, not for immediate consumption must also charge a 6-percent sales tax. If a municipality has the 1-percent local option tax, the businesses must also add the local option tax to the 6 percent state sales tax.
Licensed wholesale dealers must pay a tax on tobacco products. The tax varies per type of tobacco product as follows:
Retail sellers of coal, natural gas, electricity, propane, heating oil, dyed diesel fuel, and kerosene pay a fuel tax as follows:
Compute the tax on the retail price of coal, natural gas, and electricity.
Local jurisdictions that have the 1-percent local tax must collect the taxes and remit them to the Vermont Department of Taxes. The local options taxes are levied on rooms, alcoholic beverages, meals, and sales tax. Use tax is not part of the local option tax.
Currently, Burlington, Rutland, and St. Albans collect their own local option taxes. Instead of remitting them to the Vermont Department of Taxes, contact the business location city to pay the tax and remit tax returns.
Businesses should register to submit sales tax returns and use tax returns and remit payments online using myVTax.
While some businesses may be able to remit tax returns and payments by paper filing, businesses must file online if:
When making tax computations, carry the decimal to the third place. Round the tax to a whole cent. If the third decimal is greater than four, round up. If not, round down to the nearest cent. For example, if the tax you owe is $24,443.544, the tax is $24,443.55. If the tax you owe is $24,443.443, the tax is $24,443.44.
If a business filer pays its tax liability quarterly, the due dates are the 25th day of the month following the collection period. For example, taxes collected from January through March – the first quarter – are due on or before April 25.
If a business taxpayer pays its tax liability monthly, the due dates are the 25th day of the month following the collection period. For example, taxes collected in April are due May 25.
Vermont has several tax exemptions on sales of tangible personal property, including:
Vermont does not have a sales tax holiday.
Remote sellers and marketplace facilitators must collect Vermont’s sales tax on retail sales into the state if their gross receipts for the previous year were $100,000 or more or if they made 200 or more individual sales into Vermont.
While those business taxpayers who do not meet those thresholds do not have to pay the tax, most do as a convenience to their customers. If the business does not collect and remit the tax, the consumer must file a use tax return.
Vermont’s sales and use tax rate is 6 percent. Several local jurisdictions have a 1 percent tax added to the state sales tax.
The purchaser can download a copy of the appropriate exemption certificate. The seller must keep the certificate on file for at least three years. The purchaser should also keep a copy of the resale certificate or exemption certificate on file.
If the business had a tax liability of at least $1,000 for the previous year, it must file monthly. If the tax liability is $500 or less per year, the business can file quarterly. The Vermont Department of Taxes assigns each business’s filing frequency at the time a business registers for an account.
Yes. Vermont is a member of the streamlined sales tax project.
If the item being delivered is taxable, then the delivery and freight charges are taxable.
Yes. Ice, including pre-packaged ice and ice purchased to keep beverages cold is taxable.
The post Vermont Sales Tax Guide first appeared on Chamber of Commerce.
]]>The post Washington Sales Tax Guide first appeared on Chamber of Commerce.
]]>Washington’s sales and use tax rate is 6.5 percent. Local jurisdictions also have tax rates that businesses must add to the state sales tax rate. Additionally, Washington has some special taxes, such as lodging and vehicle rental. Some are at the state level and others at the local municipality level.
This guide does not fully describe all of Tennessee’s laws and regulations regarding taxes. Businesses should contact a business attorney or visit the Washington Department of Revenue website to learn more about the rules, regulations, tax laws and tax information associated with their industries and the types of taxes due.
Businesses must collect sales tax on sales of tangible personal property and some services.
The sales tax is a tax paid by the consumer. The use tax works in conjunction with the sales tax. A business only pays the use tax if it purchases tangible personal property for retail sales but ends up using or storing the items instead. For example, a business purchases 10 cases of Widget A, but it ends up being a poor seller. Instead of selling the last four cases, the business decides to use Widget A in the business. The business collected sales tax on the first six cases because it sold them. However, it did not pay taxes on the last four, so the business must pay use tax on those cases.
Washington has two liquor taxes – a sales tax and a spirits liter tax. Consumers pay a sales tax at a rate of 20.5 percent for liquor in its original package. On-premises retailers, such as bars and restaurants, pay 13.7 percent to distributors and distillers, who then collect the tax and pay it to the Washington Department of Revenue.
The spirits liter tax is based on volume. The general public pays $3.7708 per liter. Restaurants and bars pay $2.4408 per liter to distributors and distillers, who collect the tax and pay it to the Washington Department of Revenue.
The collection period runs from the 11th of the month through the 10th of the following month for both types of taxes for liquor purchased from distributors and distillers. Retailers remit taxes in February for taxes collected in January.
Washington’s automobile rental tax is 5.9 percent in addition to sales tax. Additionally, some counties might ad a 1-percent rental care rate for a total of 6.9 percent plus the state and local sales taxes. Additionally, vehicles rented in the Regional Transit Authority jurisdiction have another tax of 0.8 percent imposed.
For example, if the vehicle is rented in a county with a 1-percent tax, plus is in a Regional Transit Authority jurisdiction and is in a count with the extra rental car rate, the total tax would be 6.5 percent plus 1 percent, plus 0.8 percent, plus 1 percent for a total of 9.3 percent.
The vehicle rental taxes are for vehicles rented for less than 30 days to one person. Washington defines a rental car as one that is designed for carrying 10 or fewer passengers. Vehicles rented or loaned by an automotive repair shop for the consumer’s use while her vehicle is getting repaired are exempt. The federal government is also exempt if the government is paying for the rental. Government employees paying for the rental themselves must pay the tax.
Any charges added to the rental bill without giving the consumer a choice are also taxable. For example, the full tank of gas or insurance is added to every customer’s bill. They are taxable items.
However, if the business gives the consumer a choice of having rental insurance or offering to fill the tank up for a price when the consumer returns the vehicle, those items are not taxable.
Breweries and distributors pay a beer tax for the privilege of manufacturing their products in Washington. The tax is for each 31-gallon barrel or the equivalent if the beer is bottled or canned. Retailers must charge Washington’s sales tax on beer. The beer tax is as follows:
Washington has a business and occupancy tax that varies by classification. In general:
Certain industries that might or might not fall under the above categories have different taxes. The tax is on gross receipts and is due on the 25th of the month after the collection month. For example, the tax on gross receipts for January is due on or before February 25 if you are a monthly filer.
Quarterly returns are due by the end of the month following the previous quarter. For example, gross receipts collected from January through March are due no later than April 30.
If the business is an annual filer, the tax is due on or before April 15 of the next year. For example, taxes collected in 2022 are due on or before April 31, 2023.
Washington’s motor fuel taxes have not changed since 2016. The taxes are as follows:
Washington has a lodging tax, but it is divided into three types:
In addition to the room charge, several other charges are subject to taxes, including:
Washington has five rates for different public utilities:
Businesses must register for and file taxes online. Businesses can file by mail if they have a waiver.
A business has several ways to remit tax payments:
Businesses with a tax liability of $20,000 or more and pay in cash should make an appointment with the Washington Department of Revenue. Make sure you schedule the appointment well in advance of the tax due date.
The Washington Department of Revenue will advise you as to whether you pay taxes monthly, quarterly, or annually. If you are a:
If the due date is a holiday or weekend, the due date is the next business day.
Washington does not have a sales tax holiday. However, legislators are trying to pass a one-time sales tax holiday for September 2022.
Remote sellers and marketplace facilitators must register to pay Washington’s sales tax if it meets the financial nexus. If a business has $100,000 or more in gross receipts, it must collect the state and local jurisdiction sales tax.
Washington’s state sales tax is 6.5 percent. Many local jurisdictions also charge a sales tax and other special taxes.
Washington businesses must apply for a reseller permit. The permits expire. The state sends out renewal notices within 90 days of the expiration date.
Common exemptions include groceries, newspapers, and prescription drugs. Sales to the federal government are exempt. Additionally, any machinery and equipment used directly in manufacturing are exempt.
Some tax forms may ask for gross income instead of taxable retail sales. Gross income is the total of all sales the business made, whether taxable or not.
Indians are exempt from paying sales tax if the sale is in Indian Country or if the tangible personal property is delivered to Indian Country.
The post Washington Sales Tax Guide first appeared on Chamber of Commerce.
]]>The post Wyoming Sales Tax Guide first appeared on Chamber of Commerce.
]]>Wyoming’s sales tax is 4 percent. The state also has several special, local, and excise taxes. Cities, counties, and other municipalities may also have additional taxes related to retail sales. Businesses should ensure that they collect all monies related to their industries, as the state levies taxes against certain industries, such as alcohol, lodging, and tobacco.
Additionally, certain nonprofits and industries such as farming and manufacturing are exempt from paying taxes on certain items.
This guide does not fully describe all of Wyoming’s laws and regulations regarding taxes. Businesses should contact a business attorney or visit the Wyoming Department of Revenue website to learn more about the rules, regulations, tax laws, and tax information associated with their industries and the types of taxes due.
In addition to Wyoming’s retail sales tax and use tax, business taxpayers must collect or pay several other taxes, including a use tax, local taxes, and special taxes.
Wyoming has a use tax that works in conjunction with the sales tax. Business filers pay one or the other. The use tax rate is not a consumer tax – it is a tax that a business pays for storing or using taxable tangible personal property instead of selling it. For example, a business purchases 20 cases of a cleaning agent to sell. It uses two of the cases in the business. The business would collect tax from the sale of 18 cases and pay use tax on two cases.
The use tax return is within the sales tax return.
Wyoming levies an excise tax on alcohol. Currently, local municipalities do not add extra taxes to liquor and beer. Businesses must collect the special excise taxes on top of the sales tax rate of 4 percent.
The taxes are as follows:
One hundred milliliters is approximately 3.4 ounces. One liter is approximately 33.8 ounces.
Motor vehicle rental agencies must charge and collect a 4-percent tax on top of the sales tax. Businesses file reports twice per year but pay at the end of the year. The reports include
The tax is based on the total dollar amount of rental transactions from January 1 through June 30 for the first report and from July 1 through December 31 for the second report. Figure the motor vehicle rental excise tax before sales tax. For example, if the total receipts for the period were $100,000, the excise tax is $4,000, and the total sales tax is $4,000.
Businesses deduct Wyoming registration fees for the reporting period from the amount. For example, if registration fees for the first half of the year are $2,000, the total tax due is $2,000.
The business remits the end-of-year report and payment of taxes for the entire year in January of the following year.
Wyoming has several fuel taxes:
Wyoming has a lodging tax of 5 percent. Lodging services include sleeping accommodations for transient guests, including:
Guides and outfitters must also collect the lodging tax for sleeping accommodations, including:
The Wyoming Department of Revenue publishes a list of local sales and lodging taxes. The local taxes frequently change, so businesses should check them often.
Guides and outfitters are exempt from local lodging taxes. If a county has a local lodging tax, guides and outfitters collect only 3 percent of the lodging tax as the other 2 percent is distributed to the local jurisdiction.
For example, Laramie County has a local lodging tax of 4 percent. Guides and outfitters providing lodging as part of the service collect:
If a city or town has a local lodging tax, business providing guides and outfitters collects the 3-percent portion of the state lodging tax, but not the 2 percent that goes to the city. For example, Pinedale has a 4-percent local lodging tax. The business would collect:
If the guide or outfitter provides lodging with their services outside of Pinedale but in Sublette County, the business will collect:
Since Lusk has a local lodging tax of 3 percent, guides and outfitters would collect the sales tax of 6 percent plus the statewide assessment tax of 3 percent. Lusk is in Niobrara County, which does not have a local lodging tax. If the guide or outfitter provides services outside of Lusk’s boundaries but within the county of Niobrara, the business will collect the state sales tax of 6 percent and the statewide lodging assessment of 5 percent.
Because some of the services a guide or outfitter offers are not taxable, the business must list each service separately in order to distinguish between taxable and non-taxable services. If the business does not list items separately, then the entire amount is taxable.
For example, if an invoice includes guide service at $1,000, meals at $100, and lodging at $50, the consumer pays sales tax on meals and lodging, no tax on the guide service, and the state lodging assessment on lodging.
Certain counties levy a general-purpose county option tax rate, specific purpose county option tax rate, an economic development tax, and resort district tax as follows:
County | General Purpose County Option Tax Rate | Specific Purpose County Option Tax Rate | Economic Development Tax | Resort District Tax | Total Local Taxes |
Albany | 1% | 1% | 0 | 0 | 2% |
Big Horn | 1% | 0 | 0 | 0 | 1% |
Campbell | 1% | 0 | 0 | 0 | 1% |
Carbon | 1% | 1% | 0 | 0 | 2% |
Converse | 1% | 0 | 0 | 0 | 1% |
Crook | 1% | 1% | 0 | 0 | 2% |
Fremont | 1% | 0 | .50% | 0 | 1.50% |
Goshen | 1% | 0 | .25% | 0 | 1.25% |
Hot Springs | 1% | 1% | 0 | 0 | 2% |
Johnson | 1% | 1% | 0 | 0 | 2% |
Laramie | 1% | 1% | 0 | 0 | 2% |
Lincoln | 1% | 0 | 0 | 0 | 1% |
Natrona | 1% | 0 | 0 | 0 | 1% |
Niobrara | 1% | 1% | 0 | 0 | 2% |
Park | 0 | 0 | 0 | 0 | 0 |
Platte | 1% | 1% | 0 | 0 | 2% |
Sheridan | 1% | 1% | 0 | 0 | 2% |
Sublette | 0 | 0 | 0 | 0 | 0 |
Sweetwater | 1% | 0 | 0 | 0 | 1% |
Teton | 1% | 1% | 0 | 0 | 2% |
Teton Village Resort District | 1% | 1% | 2% | 4% | |
Grand Targhee Resort District | 1% | 1% | 0 | 2% | 4% |
Uinta | 1% | 0 | 0 | 0 | 1% |
Washakie | 1% | 0 | 0 | 0 | 1% |
Weston | 1% | 1% | 0 | 0 | 2% |
All local taxes are in addition to the state sales tax of 4 percent.
Register at the Wyoming Department of Revenue to file sales and use tax returns and pay taxes. The state still allows paper filing for applications and submitting tax returns and other tax forms.
Wyoming does not have a sales tax holiday.
Remote sellers and marketplace facilitators must collect sales tax from retail sales into Wyoming if they meet the financial nexus of:
Small businesses that do not meet the nexus are not required to collect sales tax. However, most businesses collect the tax as a convenience for their customers. If a business does not collect the sales tax, the consumer must pay use tax on taxable tangible personal property and services.
Wyoming law provides several sales tax exemptions. Some of the more common exemptions include:
Wyoming’s sales and use tax is 4 percent. Several counties have additional taxes, plus the state and certain counties have certain special taxes.
Wyoming’s resale certificate and tax exemption certificate is one document. Purchasers exempt from sales tax must ensure that the entire form is filled out. Give a copy to the seller and keep a copy for yourself.
The post Wyoming Sales Tax Guide first appeared on Chamber of Commerce.
]]>The post Wisconsin Sales Tax Guide first appeared on Chamber of Commerce.
]]>The Wisconsin sales and use tax is 5 percent for sales of tangible personal property and certain services. The state also allows counties to add a 0.05 percent sales and use tax, and it also has several excise taxes that businesses must collect.
This guide does not fully describe all of Wisconsin’s laws and regulations regarding taxes. Businesses should contact a business attorney or visit the Wisconsin Department of Revenue website to learn more about the rules, regulations, tax laws and tax information associated with their industries and the types of taxes due.
Before a business opens, it must be ready to collect sales and use tax, plus any additional excise taxes pertaining to the business’s industry. Businesses must also collect Wisconsin’s local sales taxes.
Wisconsin’s sales tax rate of 5 percent is the same as the use tax rate. Business taxpayers must pay the use tax if they purchase taxable tangible personal property and do not resell it but instead use it or store it.
Individuals must also pay the use tax if they purchase taxable goods and do not pay the tax on them. This is a common occurrence if a person buys something from a marketplace seller or another online store that does not meet the physical or financial nexus for taxable retail sales in Wisconsin.
Wisconsin has an alcoholic beverage tax, though most consumers do not “see” the tax because it is paid by:
The tax is as follows:
Wisconsin imposes a 5-percent fee for the lease or rental of a vehicle. Additionally, sales from providing a limousine service are taxed at 5 percent.
Exemptions include:
Wisconsin has a beer tax (fermented malt beverage tax). Breweries and brewpubs in the state must pay the tax. Additionally, wholesalers importing beer from a foreign country and out-of-state shippers shipping into Wisconsin must pay the tax.
The fermented malt beverage tax is $2.00 on every 31-gallon barrel. However, if a brewer produces less than 300,000 barrels per year, the brewer is eligible for a tax credit of $1.00 per barrel for the first 50,000 barrels.
If a business operates a coin-operated amusement device, it must pay sales tax on receipts from consumers using the device. For example, if the business took in $2,000 from a coin-operated pool table and the combined county and state sales tax rate is 5.5 percent, the sales tax due is $110. Do not subtract payouts or commissions to the owner of the establishment.
Coin-operated amusements also have a franchise tax. The operator reports income and expenses to figure the franchise tax. For example, the gross receipts are $2,000. The operator can deduct:
Net receipts after deducting sales tax are $1,890. If the deductions add up to $1,870, then the operator pays $20 for the franchise tax ($2,000 minus $110 equals $1,890. Then subtract expenses of $1,870 for a total of $20).
Wisconsin has a franchise tax and an income tax it imposes on businesses. A business pays one or the other – not both. At the state level, the tax provisions are almost the same. It is at the federal level that the tax is different.
The franchise tax of 7.9 percent applies to domestic corporations that have nonexempt income and businesses not organized under Wisconsin law (foreign corporations).
The only exception to the franchise tax, other than paying income tax, is where taxation is exempted by statute or barred by federal law.
The income tax is also 7.9 percent levied on foreign corporations that are not subject to the franchise tax and own property in Wisconsin. The income tax also applies to businesses that have exclusively foreign or interstate commerce.
Suppliers of motor vehicle fuel pay the tax on terminal receipts or imports of motor vehicle fuel into Wisconsin by means other than a marine vessel or pipeline. An unlicensed blender using untaxed fuel products where the products would normally be taxed is also subject to the motor fuel taxes. For example, when a consumer blends kerosene with diesel in the tank of a licensed motor vehicle to make the vehicle easier to start, that person must pay the tax.
The tax is 30.9 cents per gallon.
The Wisconsin Department of Revenue also administers the premier resort area tax, which is a local retail sales tax. The tax is used to pay for infrastructure expenses in the jurisdiction. Jurisdictions that have the premier resort area tax include:
The City of Milwaukee’s Local Exposition District, called the Wisconsin Center Tax District, imposes a tax to fund exposition center facilities. While the Wisconsin Department of Revenue administers the taxes, they go to the city. The taxes include:
Anyone selling lodging, renting automobiles, or selling food and beverages in any municipality that is partially or wholly in Milwaukee County must collect and remit the tax.
Dry cleaners must pay a license fee of 2.8 percent of their gross receipts from the previous three months. The fee only applies to dry cleaning apparel and household fabrics, not formal wear that the dry cleaning facility rents to the general public.
Dry cleaners also have to pay a dry cleaning products fee of $5 per gallon of perchloroethylene sold and $0.75 per gallon for any dry cleaning product sold that is not perchloroethylene.
The tax on cigarettes is at the distributor level. The distributor pays the tax and affixes a tax stamp to the cigarettes. The tax is included in the price to the retailer. The cigarette tax is 12.6 cents per single cigarette and $2.52 per pack.
The tobacco products tax is paid by manufacturers who manufacture tobacco products in Wisconsin. However, anyone in the state who purchases tobacco products for sale or resale from someone without a valid distributor license must also pay the tax. And anyone outside of Wisconsin who ships tobacco to consumers and businesses in the state and does not hold a distributor permit from Wisconsin must also pay the tax.
The tax is 71 percent of the manufacturer’s list price to distributors for tobacco products. Moist snuff has a 100 percent tax based on the manufacturer’s list price. The tax on cigars is 71 percent of the manufacturer’s list price or $0.50 per cigar, whichever is lower.
Sixty-eight Wisconsin counties elected to adopt a 0.5-percent county tax that applies to retail sales, leases, licenses, and rentals of tangible personal property. The tax is in addition to the state tax.
The counties subject to the 0.5-percent tax are listed by the Wisconsin Department of Revenue and include
Businesses and consumers can find a complete list of counties that charge the 0.5-percent county tax by visiting the Wisconsin Department of Revenue and should always check the tax to ensure that their point-of-sale terminals are always updated. As with any other tax, the county tax could change from year to year.
If a business is not already registered or is an out-of-state business, it must first register with the Department of Revenue. Otherwise, a business needs to create a tax account.
Wisconsin does not have a sales tax holiday.
Remote sellers and marketplace facilitators must register for a Wisconsin sales tax account if their gross receipts for the previous year were $100,000 or more or if they had 200 or more individual sales into Wisconsin.
Small sellers are exempt by law, but many collect sales tax as a convenience for their customers. If a business does not collect Wisconsin sales tax, the consumer must pay the use tax.
Wisconsin’s sales tax is 5 percent. Additionally, several counties have a 0.5 percent sales tax rate. The state also has several specialty taxes and excise taxes.
Wisconsin calls the resale certificate a “seller’s permit.” You must apply for the permit. Additionally, the state could charge up to a $15,000 “security deposit” for the permit. Businesses must apply for the permit at least three weeks before starting the business. Register online for the permit or submit Form BTR-101 Application for Wisconsin Business Tax Registration.
Yes, you must still file a sales tax return.
Yes, but only if the sale takes place on the reservation and the person is a member of the reservation.
The post Wisconsin Sales Tax Guide first appeared on Chamber of Commerce.
]]>The post West Virginia Sales Tax Guide first appeared on Chamber of Commerce.
]]>West Virginia’s state sales tax is 6 percent. The state also has a complementary use tax, municipality taxes, and several special taxes. Businesses must determine which taxes apply to them and charge their consumers accordingly, then submit a combined sales and use tax return to the West Virginia State Tax Department.
This guide does not fully describe all of West Virginia’s laws and regulations regarding taxes. Businesses should contact a business attorney or visit the West Virginia State Tax Department website to learn more about the rules, regulations, tax laws, and tax information associated with their industries and the types of taxes due.
In addition to the sales tax of 6 percent, West Virginia has several additional taxes based on the municipality and industry you are in.
The sales tax has a complementary use tax. Consumers and businesses do not pay both. If a business purchases tangible taxable personal property without paying taxes and does not resell the items, it must pay use tax on them. If a consumer purchases tangible personal property and does not pay tax, the consumer must pay the use tax. Some online businesses do not charge West Virginia’s sales tax because they do not meet the physical or financial nexus.
Retailers selling wine and liquor must collect and remit:
The state requires a retailer to complete two forms: The CST-200CU Combined Sales and Use Tax Return and the CST-270 Wine/Liquor Return.
To determine the total tax due for a municipality that charges a 1-percent sales and use tax:
Retailers can also file both taxes online.
If a municipality has a Special District Excise Tax for economic opportunity development, the business pays only this tax. It does not have to pay the state’s sales tax. As of this writing, Monongalia County, Harrison County and Ohio company are the only three counties with a Special District Excise Tax:
The local sales tax of 1 percent still applies to Park Place, so the total tax rate for that local jurisdiction is 7 percent.
If the business taxpayer has sales only in Park Place, it can file the local tax on the District forms. However, if the business has sales from other physical business locations or sales made by delivery to locations not in the District, it must file those sales on the regular sales tax return (CST-200CU).
Businesses that make retail sales of consumer fireworks must collect a 12-percent safety fee in addition to the state sales tax. This fee is due on the 20th of each month for the previous calendar month.
Thus, if a consumer purchases $200 in fireworks, the business must collect 6 percent for the state tax plus the municipality tax (we’ll use 1 percent for this example), and the 12 percent safety fee. Multiply the total due by .06 to get the state tax of $12, then by .01 to get the local tax due of $4, and finally, by .12 to get the fireworks safety fee of $24. The total sale is $240.
Businesses that sell factory-built homes must charge the state’s sales tax rate of 6 percent on 50 percent of the cost of the home. The tax applies to homes being used as the consumer’s principal year-round residence. All other sales are subject to sales tax on the full price of the home.
Additionally, businesses must also pay a factory-built homes fee of $20 per home.
West Virginia has two motor fuel taxes – a flat rate and a variable rate. The combined rate for the different types of fuel are:
The following fuels are subject only to the variable rate as follows:
West Virginia has a cigarette tax and a tax on other tobacco products. The cigarette tax is $1.20 per pack of 20 cigarettes. The state taxes other tobacco products at 12 percent of the wholesale price.
Additionally, when the cigarette tax increases, the state charges a floor stock tax on wholesale dealers and retailers with stamped cigarettes in their possession that were stamped at the lower rate. The floor tax also applies to other tobacco products. The floor tax for cigarettes is $0.65 per pack of 20 cigarettes and 5 percent of the wholesale price for other tobacco products already stocked.
Several municipalities in West Virginia charge a 1-percent municipal sales and use tax. The tax is on taxable goods, services provided within the municipality, and custom software. Local businesses collect this tax in addition to the state sales tax.
Businesses can file their taxes online through the MyTaxes website.
File Your West Virginia Sales and Use Tax Return Online
As of May 15, 2008, if you are filing this tax electronically, it must be filed through the MyTaxes website. They may also file a paper copy of the CST-200 Consumer’s Sales and Service Tax Return. If filing a paper copy, businesses should make the sales tax return and remit payment to: Tax Account Administration Div., PO Box 1826, Charleston, WV, 25327-1826.
If a business needs assistance with filing taxes, it can call (304) 558-3333 or (800) 982-8297.
The West Virginia sales tax holiday is from 12:00 a.m. on Friday, August 5, 2022, through 11:59 p.m. on Monday, August 8, 2022.
Qualifying items include:
Consumers can have more than one items that are tax-free in the same transaction, even if the total of both items exceeds the threshold. The qualification is based on the purchase price of each item.
Remote sellers and marketplace facilitators must collect West Virginia’s sales tax rate, including the municipal taxes, if they meet the thresholds of $100,000 in gross receipts for the previous year or 200 individual sales into West Virginia.
Consumers who purchase products and services from a remote business that does not meet the financial nexus and does not collect tax must pay use tax on the items they purchased.
Certain items are tax-exempt and do not require a sales tax exemption certificate, including:
Depending on the amount a business collects, it has to pay sales tax on a monthly, quarterly, or yearly basis. A business learns of its due dates when it creates an account.
Generally, sales and use tax is due on the 20th of the month following the month when the business collects the tax. For example, taxes collected in January are due on or before February 20.
Quarterly taxes are due on the 20th day of the month following the end of the quarter. For example, taxes collected from January through March are due on or before April 20.
Annual taxes are due on or before January 20 of the year following the collection year. For example, filers pay taxes collected in 2022 on or before January 20, 2023.
West Virginia’s sales tax for 2022 is 6 percent. Several municipalities in the state also charge an additional sales and use tax rate.
Businesses can download the Streamlined Certificate to use as a resale certificate. Tax-exempt businesses that qualify, such as certain nonprofits and governmental agencies and also use this document as a tax-exempt certificate.
The post West Virginia Sales Tax Guide first appeared on Chamber of Commerce.
]]>The post Pennsylvania Sales Tax Guide first appeared on Chamber of Commerce.
]]>Pennsylvania’s sales and use tax rate is 6 percent. Additionally, the state allows local jurisdictions to add additional sales tax. The state, county, or municipalities can also add specialty taxes, such as accommodations taxes, rental taxes, and more.
This guide does not fully describe all of Pennsylvania’s laws and regulations regarding taxes. Business taxpayers should contact a business attorney or visit the Pennsylvania Department of Revenue website to learn more about the rules, regulations, tax laws, and tax information associated with their industries and the types of taxes due.
Pennsylvania has several taxes for various industries in addition to sales and use taxes.
Pennsylvania taxes sales of tangible personal property and some services at 6 percent. Some counties or municipalities add discretionary sales and use tax. Business owners must pay use tax if they purchase taxable goods or services without paying tax and store or use them instead of reselling.
An individual who purchases taxable goods and does not pay the sales tax at the time of purchase must also pay use tax. This might happen if someone purchases goods from out of state and the seller does not charge sales tax. The use tax return is the same as the sales tax return.
Pennsylvania has three alcoholic beverage taxes.
Pennsylvania has several rental and tire surcharge taxes. The taxes are in addition to sales and use tax and other taxes levied on vehicle rentals. When figuring the tax, do not tax one tax with another. For example, if a vehicle rental is $100, figure the sales tax on $100, the vehicle rental tax on $100, and the other taxes on $100.
Additionally, Pennsylvania levies a 2-percent vehicle rental tax on rental companies that rent vehicles designed to carry 15 or fewer passengers if the rental agency has five or more motor vehicles. The tax also applies to trucks, trailers and semi-trailers used to transport property that is not commercial freight. The tax is on vehicles rented for 29 or fewer consecutive days.
Carsharing services must also pay a tax as follows:
A room rental charge at the same rate as the sales tax rate – 6 percent – is levied on room rentals for 30 or fewer days by the same person. The tax also applies to rooms, apartments, and houses rented through third-party brokers or online. Accommodation fees charged by booking agents are also taxable at the 6-percent rate.
Pennsylvania levies a gross receipts tax on several industries, including:
The motor fuel tax rates for 2022 are good through the calendar year. In addition to the motor fuel tax rates for various types of fuel, the business must pay a 1.1-cent per gallon underground storage tank fee to the Insurance Department. Motor fuel taxes include:
Retail businesses selling wireless telephones and pre-paid telecommunication services must collect and remit $1.65 per retail transaction for emergency-911 surcharges.
In addition to the state sales tax of 6 percent, Allegheny County levies a 1-percent sales tax on retail sales. Philadelphia levies a 2-percent local tax to sales of tangible personal property.
Register to pay sales tax and other taxes with the Pennsylvania Department of Revenue e-TIDES. You can also amend sales tax returns through e-TIDES.
Sales taxes are due monthly, quarterly, or semi-annually. In some cases, the tax must be pre-paid. When you sign up for your account, the Pennsylvania Department of Revenue will advise as to your payment frequency.
Sales, use, and hotel occupancy taxes are due:
Pre-paid taxes for 2022 are due pursuant to the following:
Pennsylvania does not have a sales tax holiday as of the end of the third quarter of 2022, though a Pennsylvania senator is pushing for a sales tax holiday.
Remote sellers and marketplace facilitators must collect Pennsylvania sales tax if they have over $100,000 in gross receipts into the state for the previous year. Previously, the state had an option for out-of-state businesses to advise buyers to pay use tax. However, that option is no longer available. Collecting sales tax if a business meets the financial nexus is mandatory.
The sales tax rate and use tax rate for Pennsylvania is 6 percent. Alleghany County adds 1 percent to the sales tax rate, and Philadelphia adds 2 percent to the state sales tax rate.
Pennsylvania has one tax form for an exemption certificate and resale certificate. The business does not have to file the form but must give a completed copy to a seller. Nonprofits and other exempt businesses must also give a copy to the seller. Businesses should also keep a copy for each seller in their records.
Pennsylvania businesses can register for tax updates via email.
The Pennsylvania Department of Revenue prefers that businesses file online or through Telefile ((800) 748-8299). Payments over $1,000 must be made electronically. Otherwise, if a business must file via mail, it should mail payments and returns to the PA Department of Revenue, B.I.D.M., PO Box 280406, Harrisburg, PA 17128-0406.
Businesses can send a certified cashier’s check or money order for the amount due to the PA Department of Revenue, BTFT EFT Unit, 9th Floor Strawberry Unit, Fourth and Walnut Streets, Harrisburg, PA 17128-0908.
E-TIDES allows more than one person to have access to the account. However, each filer must register their own electronic signature. Each filer will have a personal user ID and password to access the account.
Complete REV-1176 e-TIDES Administrative Access Change Request and the REV-677 Power of Attorney and Declaration of Representative forms to remove the old administrator and change the access rights to the account.
The post Pennsylvania Sales Tax Guide first appeared on Chamber of Commerce.
]]>The post South Dakota Sales Tax Guide first appeared on Chamber of Commerce.
]]>South Dakota’s sales and use tax rate is 4.5 percent. The state also has several special taxes and local jurisdiction taxes at the city and county levels, including lodging taxes, alcohol taxes, admissions taxes, and taxes on eating establishments. Other taxes include telecommunications taxes, tourism taxes, and motor vehicle taxes.
This guide does not fully describe all of South Dakota’s laws and regulations regarding taxes. Businesses should contact a business attorney or visit the South Dakota Department of Revenue website to learn more about the rules, regulations, tax laws and tax information associated with their industries and the types of taxes due.
In addition to South Dakota’s 4.5-percent sales tax, the state has a use tax, which is the rate.
Businesses making retail sales and selling some services must collect and remit South Dakota’s sales tax of 4.5 percent. If a business purchases tangible personal property and stores or uses it instead of reselling it, the business must pay the use tax on the items. For example, a business that purchases 10 cases of Widget A and only sells eight cases. Instead of trying to sell a slow-moving item, the business decides to use the other two cases in the business. It must pay the use tax on the two cases. The sales tax return and use tax return are on the same tax form.
South Dakota has a motor vehicle excise tax fee of 4 percent of the purchase price. Additionally, South Dakota has a motor vehicle gross receipts tax of 4.5 percent that applies to the rental of cars, trucks, motorcycles and vans if the business rents them to the same person for less than 28 days. Certain trailers are also subject to the tax if they are rented for 6 months or less.
Cigarettes are taxed at $1.53 per pack of 20 and $1.92 per pack of 25. Other tobacco products are taxed at 35 percent of the wholesale purchase price. Additionally, retail sales of cigarettes are subject to the state sales tax rate and the rate at the local jurisdictions, if any.
South Dakota also has a rule that retailers cannot sell cigarettes and other tobacco products for less than 8 percent above the distributor’s or wholesaler’s price.
The state has a tourism tax of 1.50 percent on the following types of establishments:
South Dakota levies the tax year-round. Additionally, the tax applies to “visitor-intensive” businesses from July through September.
If a business is exempt from sales tax, it is also exempt from the tourism tax. For example, fair admissions are not subject to the state’s sales tax. Thus, they are not subject to the tourism tax. However, rodeo admissions, rides at a fair and concessions are subject to sales tax. Thus, those items and services are subject to the tourism tax.
The telecommunications tax of 4 percent applies to several telecommunications services, including:
Wireless service providers and other businesses that sell prepaid wireless service must collect and remit the prepaid wireless 911 emergency surcharge of 2 percent on gross receipts from retail sales.
Taxable items include prepaid wireless airtime cards and prepaid wireless minutes and plans in addition to other services. If the surcharge is not itemized, it is subject to sales taxes for the state and municipalities.
If the retailer sells prepaid wireless services with non-taxable products for a single price, the entire price is taxable.
A boat excise tax of 3 percent applies to the purchase of most boats in addition to the sales tax.
Local jurisdictions can impose a gross receipts tax, municipal sales tax and use tax. Although the taxes are for the municipalities, the South Dakota Department of Revenue administers the taxes.
The general municipal sales tax can be up to 2 percent. The gross receipts tax can be up to 1 percent and is in addition to the municipal sales tax.
Municipalities can impose the gross receipts tax on:
The South Dakota Department of Revenue also administers these taxes.
The following special jurisdictions have the following taxes:
Additionally, the following cities also have special taxes, which are in addition to the state sales tax and the special jurisdictional taxes:
Businesses can also look up their tax rate by address.
Business filers should register to file South Dakota’s taxes at the South Dakota Department of Revenue’s EPath page. The online option allows a business to pay by ACH Debit or ACH Credit.
For businesses that prefer to pay by check, send payments to:
South Dakota Department of Revenue
Anderson Building
Mail Stop 5055
Pierre, SD 57501
Businesses can also pay over the phone by calling (800) 829-9188. Payment options are ACH Debit or credit card.
The South Dakota Department of Revenue will accept cash payment in person at one of their offices.
Sales and use taxes are due on the 20th of the month following the collection month. For example, taxes a business collected in January are due on or before February 20.
South Dakota does not have a sales tax holiday for sales of tangible personal property.
The law in South Dakota exempts certain entities from paying sales tax on purchases. Nonprofit and other relief agencies, private schools and religious entities must apply to the South Dakota Department of Revenue for approval of tax exempt status.
Certain entities are tax exempt, including:
If a business sells taxable tangible personal property and services into South Dakota, it must file sales tax returns and remit payments if it makes $100,000 or more in gross receipts in South Dakota, or if it has 200 or more individual transactions into the state.
Businesses located in South Dakota must collect another state’s sales taxes if they have more than $100,000 or 200 or more individual transactions into another state. The best way to pay other states’ sales taxes is to register for a Streamline account.
South Dakota’s sales tax is 4.5 percent. The state also has several special taxes and additional sales taxes for local jurisdictions.
South Dakota uses the same certificate as a resale certificate or exemption certificate.
Excise tax licenses are not transferable. If the business changes hands or changes its legal organization type, it must cancel the license and obtain a new license within 15 days. You can cancel it online or check the “Out of Business” box in the upper right corner of a paper return.
A business must notify the South Dakota Department of Revenue in writing of a mailing address change. In the correspondence, include the new address, the effective date of the new address, the business taxpayer number, and the name of the business on the change of address form or change the address in your online account.
If the business changes its accounting method with the IRS, the business must also notify the South Dakota Department of Revenue. If the business uses the accrual method, sales tax is due on the date, even if the business has not collected it. With the cash method, the sales tax is based on gross receipts, so you can pay it as you receive payments.
The post South Dakota Sales Tax Guide first appeared on Chamber of Commerce.
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