sales tax

[Carl Root]

kam544@earthlink.net wrote:
> 
> *Anytime* you purchase items with the purposes of resale, trust me, Carl,
> the State you do this business in is interested, very interested!
> 
> In accounting accounts called Purchases and Sales monitor this activity,
> and when profit is realized, the States concerned would like their fair
> share for your privilege of doing business.  Point of sale is taken very
> seriously by the State who stands to receive this fair share.
> 
> Some items, such as individual hammer shanks or individual hammers can be
> regarded as a necessary Supplies expense of doing repairs if one so
> chooses, but selling complete sets of hammer shanks or hammers cannot be
> regarded as the same thing in the normal day to day business.

States are different.  So are technicians' business activities.  I'll
bet a lot of you think that all states require a 'business license'. 
They don't.

Let's look at hammers.  Obviously, replacing one hammer is deminimus
(sp?).  meaning too small too worry about it.  Learned that word from an
IRS agent!

Now, when you install a new set of hammers, how do you calculate what
the customer owes you?  Time and materials, right?  Well, did you mark
up the wholesale cost of hammers?  Many technicians don't, in part
because they ordered them for this job which eliminated stocking space,
money tied up in a stocked set, etc..  There is time spent ordering the
parts, but that's on the 'time' side of the ledger.  Where's the profit
on the sale?  

But maybe the State is interested even if there is no 'profit' so let's
consider volume.  Does your bookkeeping system allow you to separate out
the cost of all resalable items?  I'd like to see figures from those of
you who collect sales tax regarding the minimum amount your state allows
you make on resale before they want to get involved.  If you sell two
Dampp-Chaser systems per year, I really don't think they're
interested.   

Just in case you think I'm a scofflaw, You may recall that I used to
sell Walter pianos for four years and of course I collected sales tax. 
At that time I became aware of the idea of minimum amounts, but I don't
remeber what it was.  I filed a form to permit me to stop collecting tax
what I stopped selling Walters and that was that.

Carl