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sales and use tax ?

updated fri 16 jan 04


Catherine Yassin on wed 14 jan 04

In a message dated 1/14/2004 9:24:07 AM Central Standard Time,
thesilverfox@DOL.NET writes:

> ? If my gross sales are high
> and the tax paid is small, am I looking for trouble?
> Carole Fox

No, Carole, I don't think you are looking for trouble. They (the tax ppl)
know that there will be sales that aren't taxed and thats why they make a
separate place for "taxable sales". Here in Texas there is sales tax, but products
sold outside Texas are not subject to the sales tax (neither are tax exempt
organizations inside Texas). Therefore, my gross sales are always higher than my
taxable sales. That being said, it is always good accounting to have your
non-taxable sales customers fill out a tax exempt form. You never know when you may
be audited and they will look for those forms.

-Cat Yassin
San Antonio

Carole Fox on wed 14 jan 04

Having only sold in galleries or Delaware (home of tax free shopping!)
previous to this year, I have never collected sales tax until now. Most of
my sales this year were in Delaware, though or through a gallery, so I have
a large gross sales and only a small amount for sales tax collected in MD.
Do I need to explain this discrepancy somehow? If my gross sales are high
and the tax paid is small, am I looking for trouble?
Carole Fox
Silver Fox Pottery
Elkton, MD

Susan Giddings on wed 14 jan 04

Most state Sales and Use tax forms have a section to delineate sales not
subject to tax. (In this case you are talking about your state's SALES tax,
the USE tax is a different critter although reported on the same form. I am
not at all familiar with tax forms or rules in states other than CT, so I
hesitate to offer any real direct help. You can call your state tax
department and ask them.

The issue is that YOU have basically TWO numbers:

GROSS SALES - which includes ALL sales some of which were subject to your
state Sales tax.


TAXABLE SALES - just the amount of sales that you made in state and
collected tax against.

If you can't figure out which goes where on your tax return, you can call
and ask the taxing authority FOR FREE. They will tell you. And you don't
have to identify yourself to them. You may not have to report your Gross
sales at all, only the Taxable sales (as I have defined these terms here.)

Susan, no I'm not a sales and use tax expert, although I've filled out my
share of these forms over the years, Giddings

Susan Giddings
Daytime phone: 860-687-4550
Cell phone: 860-930-8813

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