Sales Tax Must Be Charged...
I got a rare email today.
hi im trying to by this item yet there is a sales tax on this purchase. im indonesian citizen. the item will be shipped to new york 11434 my warehouse and it will be forwarded to indonesia for resell can you help me to refund the tax ?
About every 5 years or so, I get someone trying to skirt the tax. Unfortunately no excuse in the world can get you out of it here in New York. Typically for most states, if it's being shipped within the same state, then sales tax must be collected. There are ways around the tax, but usually they are so bothersome that it's not worth the effort.
The main one involves being a registered entity, typically a business one, with the state. That stops every one who has ever asked me about this over eBay as most people are not registered businesses.
Then you need to fill out a form to get permission from the state for this exclusion. That's so the state knows what you are doing and to keep an eye on you. You really don't want to be doing that as it can raise red flags and audits. Usually it's smarter to just pay the tax.
If you do do this, then it's filling out another form for every seller every time you wish to make a sale to not pay the tax. Some locations keep a file on you but it's been my experiences that you need to fill out this form over and over again. That just takes too much time which can be better used doing just about anything else.
In this case, the person only needed to fill out a ST-120 form attesting that he's an out of area buyer. But on that form he needs to supply his location and his business number, yadda yadda yadda. I'm supposed to keep that on hand in case I ever get audited. Or I can do what many small businesses would do and simply refuse it. It's just too much bother. The state lets you do that and you as a buyer are supposed to fill out more paperwork with the state to get it back.
I shop at the local thrift stores and I can save around $100 to $200 but it's not worth it. Sometimes I come across older women doing this to get out of paying for their 25 cent sales tax, holding up the line behind them for some 15 minutes. It's beyond stupid and quite annoying.
This is one of those laws that is obviously intended for businesses who spends thousands and thousands on sales taxes. It's not really intended for the small penny pinching sellers.
And most sellers which does go though this process abuses the system anyway, using this for every damned thing they buy. That's why you don't do this as a smaller seller as it raises your risk for an audit greatly.
And really, if you are making a huge profit on the junk you buy and resell, then saving $100 or so a year in taxes is not worth spending 10 hours a year filling out forms to get that money back.
In theory I could collect all my receipts and fill out some form and mail it into the state for a refund, but again it raises red flags and audits. And it's a lot of work for what almost amount to pennies. I feel that it is better to focus that time into making more money for yourself then to fight for so little back. Or just use that time to relax from working so hard with your business.
I feel it is a lot like theft. It sucks but it's a fact of life. You have to accept that there will be losses and it's not worth fighting for every minor little cent. Worry about the big stuff, not the small stuff like this.
--->This<--- is the tax law about the subject.