posted on October 16, 2001 02:22:49 PM
Because of some recent incorrect Billpoint payments from newbies, I've decided to enable the Instant Purchase option. But I don't know what rate to put in for the sales tax.
I have to remit the sales tax based on the county the buyer lives in. My county rate is rather low, 5.75%. But the rates range from 5.25% to 7%, with most counties charging between 6% to 6.50%.
If I put in my own county rate, I'll be footing the bill for the sales tax most of the time, since, so far, most of my in-state customers have been in the higher rate counties.
What do the rest of you do when you have to remit tax based on the buyer's resident county? Do you charge an average rate based on the range and then just not concern yourself if it's higher or lower than the buyer's actual rate?
posted on October 16, 2001 02:55:20 PM
I charge based upon the county I am in.
The state AND county sales tax here is 8.25% together. That is what I have to pay when I file my returns quarterly, and that is what my in-state customers pay.
posted on October 16, 2001 03:05:00 PM
Yes, it's quite easy to figure out what rate to charge the buyer if you live in a state that specifies you pay based on your resident county rate. But Ohio doesn't. They require payment based on the buyer's resident county rate (assuming that's where the item is shipped to, of course).
Up until now it hasn't been an issue. But I need to prevent these newbies from seriously shorting me on their Billpoint payments, so I'm debating what rate to input. Either way, someone is going to be undercharged and someone is going to be overcharged. I can't see any other way around it except if I charge the lowest rate of 5.50%, of which there is only 1 county that charges that little and the odds against the bulk of my sales being from that county are slim to none. Then everybody gets undercharged and I dip into my pocket for the balance.
So I'd really like to hear from others who live in states that do not make it easy and require you to pay just one flat rate.
posted on October 16, 2001 05:50:49 PM
Judging from the previous sales tax threads I've seen here, there probably aren't too many states like Ohio that make it such a hassle to charge and remit sales tax.
So I'll just charge my own county rate of 5.75% and dig into my pocket for the rest. The amounts in question won't be significant and at least the buyers can't complain I'm overcharging them on the sales tax.
posted on October 16, 2001 06:33:33 PM
Average, estimating, charging too much or too little sales tax can get you into some real trouble. When you file out your sale tax reports you must report by county and you must report what you collected and have the sales ledger to back it up if you should ever need it.
You really might talk with you income tax accountant. He should know or be able to direct you to a sales tax accountant before you have big problems. You only need to ask him what you are asking here. They should answer it for free.
posted on October 16, 2001 06:57:46 PM
My state also requires charging mail order purchasers their individual sales tax rate.
I put the highest rate in the Instant Purchase sales tax box -- then refund the difference via Billpoint if the buyer lives in a county with a lower rate. It's a few clicks and a couple of minutes to do, but not a big hardship in my case. (It would be another story if I had dozens of in state buyers a week!)
posted on October 16, 2001 07:45:56 PM
For small sales, base it on your own county. Most buyer will not complain if you you charge them a little extra or undercharge them.
If you get a sales tax audit, they probably don't care about the nickles and dimes. They ususally just want to be sure you do remit on sales and that you also remit sales tax for items you personally use. And of course sales tax for items purchase out of state.
posted on October 16, 2001 08:10:55 PM
Thanks for the responses!
Yes, I'm going with my county tax rate. It's the second lowest in Ohio, with only 1 county having a lower rate. So the odds of my overcharging anyone are really slim to none.
Personally, I'd rather undercharge and dig the difference out of my own pocket than have to refund. Which is certainly what I'd be doing if I charged the highest rate. Especially since there's only 1 county at that rate, the county I used to live in!
BTW, I don't have a tax accountant. I have an accounting background and I've always liked (now you're really going to think I'm crazy, aren't you? ) to do my own taxes.
You can report what you collect by county, or you can segregate your sales by county and multiply by the applicable county rate to determine the county tax breakdown. Which is how I did it with my first state sales tax form earlier this year, since I hadn't been charging my customers at the time. I paid the sales tax owed out of my own pocket, just a few dollars. But as my Ohio sales have increased a great deal, I've been charging for the last couple of months by the buyers' county rate. But with Instant Purchase, that method doesn't work so well, which is why I asked what others have done in order to use Instant Purchase.
And, since I'll be undercharging by using my county rate, I'll have to use the same method. Multiply the county sales dollars by the rate to determine the amount I owe, which should be more than what I actually collected.
posted on October 16, 2001 08:20:50 PM
Hi BJGrolle ~
I live in NY - and every county is a different tax rate here as well. And to complicate things even more, on clothing items under $110, there is even a *different* tax rate. And you have to charge sales tax on where the item is being shipped to.
A MAJOR pain when doing my bookwork.
For Billpoint, in the space where you enter your info, I had put in mine "if you live in NY please contact me with your county so I can revise this invoice with the correct tax amount".
But, as we all know - buyers don't read. It states this in my auctions, my EOA, my Billpoint invoices, and somehow, they manage to miss all three where it says they have to pay sales tax.
So, I've just changed my Billpoint invoices to automatically say 8% in NY. That way, no one will pay the invoice (because no one has to pay 8% on clothing in NY), and I will get the chance to revise my Billpoint invoice without them trying to pay it first.
I really do wish though that Billpoint would make this easier for the states that have a different tax rate for every county.
posted on October 16, 2001 09:55:37 PM
Exec wrote:
I live in NY - and every county is a different tax rate here as well. And to complicate things even more, on clothing items under $110, there is even a *different* tax rate. And you have to charge sales tax on where the item is being shipped to.
*****************
Exec, unless you are going to those counties to sell, in NY, you charge the tax rate that you ship from..the point of sale. When I do fairs, I charge the sales tax where I am selling..which means I have to keep track to sep it out on the tax forms, so each county gets what is due them. BTW, does your first name start with a P? If so, we know each other from another board.
That is not correct. In NY we charge sales tax based on where the package is being delivered to. I've also confirmed this with 2 accountants, and have read it on a NY Dept of Taxation & Finance web page.
When you do fairs, of course you are going to charge them sales tax on the county you are in - which is also the county the customers are buying in. You are selling to the customers right there. They are receiving their items in the same county you are selling in. That makes your paperwork a lot easier.
I'm not. I'm selling on the internet. If I live in Erie County (which is 4%) and I sell to someone who lives in Jefferson County (3%), I have to charge them the rate in Jefferson County (3%) that THEY live in. And when I do my sales taxes every year, I have to enter every sale that went to each different county.
And no, my name doesn't start with a P...
[ edited by ExecutiveGirl on Oct 17, 2001 03:22 AM ]
Sounds like your state sales tax situation is about as bad as it could get!
I really do wish though that Billpoint would make this easier for the states that have a different tax rate for every county.
I think in order for a miracle like this to happen, the system would have to be rigged up so that you could input every county in your state along with the applicable sales tax rate. Then Billpoint would have to be set up to "know" which county the buyer lived in for the appropriate rate to kick in. Probably not impossible, just incredible time-consuming to program the system that way I imagine.
It also would be nice to live in a state without the sales tax. Or at least live in a state that has a uniform state-wide tax rate.
They don't realize how difficult they make things for us online vendors. In Ohio they call us Delivery Vendors.
Along similar lines is what's going to happen with Priority Mail. But we'll all have a nice talk about that next year, shall we?
posted on October 17, 2001 05:53:02 AM
Exec..of course you are right. I don't know where my brain was..having a senior moment I suppose.When I reread what I wrote this morning, I wondered if I was in a dream world.
posted on October 17, 2001 05:53:28 AM
Exec..of course you are right. I don't know where my brain was..having a senior moment I suppose.When I reread what I wrote this morning, I wondered if I was in a dream world.
