sales tax defined
DESCRIPTION
Sales Tax Defined. Sales Tax Imposed on the retail sale of tangible personalty or services within the taxing jurisdiction. Use Tax Defined. Use Tax Imposed on the possession, use, storage, or consumption of tangible personal or services within the taxing jurisdiction. Use Tax Illustration. - PowerPoint PPT PresentationTRANSCRIPT
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Sales Tax DefinedSales Tax
Imposed on the retail sale of tangible personalty or services within the taxing jurisdiction
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Use Tax DefinedUse Tax
Imposed on the possession, use, storage, or consumption of tangible personal or services within the taxing jurisdiction
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Use Tax IllustrationDoris O’Brien
Resident of State APurchases $ 30,000 of goodsPays $ 1,200 sales tax (*)
$ 30,000 X 6.5%$ 1,950 (1,200)$ 750 net tax due
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Sales and Use Tax Nexus
Vendor's physical presence in state is required
(Quill decision) and is established if the vendor:
Maintains a place of business for selling or storing property in-state.Uses employees or independent contractors for selling or delivering goods in-state.
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Sales Tax BurdenWealthy taxpayer illustration:
Income (net of income taxes) of $ 200,000; 50% Investment or $ 100,000; Consumption$ 100,000 including $ 6,000 sales tax
Middle income taxpayer illustration:Income (net of income taxes) of $ 50,000Consumption $ 50,000 including $ 3,000 sales tax
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Excluded Goods or Transactions
Sales for resaleIngredient or component parts Industrial or agricultural machinery or equipmentProperty used or consumed in manufacturingContainers and packagingOccasional sales
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Tax-exempt Purchasers
Federal government and agenciesState and local governments and agencies(public hospitals, state schools, etc.
Not for profits
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Areas of Current InterestDefinition of Specific ExemptionsTaxation of ServicesSales Tax Audits (Tyco)Taxation of e-CommerceStreamlined Sales Tax ProjectAlternative Approaches to Sales/Income TaxSales/Use Tax on Capital ChangesCompetition with No Sales Tax States—NH,DE,MT,ORTax Amnesty, Holiday Programs
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Payroll TaxesState Withholding ArrangementsUnemployment CompensationAudit Issues
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Property Taxes
Ad valorem basePersonal Property Taxes
Autos and Similar VehiclesAccounts Receivable, Inventory, Machinery and Equipment
IntangiblesReal Property Taxes
Assessment & Collection Procedures
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Other TaxesIncorporation TaxLicense Tax (Occupations & Professions)Realty Transfer TaxMortgage Recording TaxCapital Stock TaxFranchise Tax