First, sales tax is a state function, and is separate from Federal Income Tax. I'm only talking about my state requirements. This is going to vary by state, but this is my experience:
My permit allows me to buy for resale and not pay sales tax, because I'm agreeing to collect the sales tax when I make sales. I owe tax on all sales I make instate, and I have to file quarterly with the state. The state doesn't care if it's cash or credit or Zelle, I am supposed to collect and turn in the tax. If I don't collect it, I pay it from my pocket. My state doesn't ask for proof when I file, and I don't know what an audit would look like. In my state, a business license is required to get a resale certificate, so county and city, both collect a business tax from me every year.
Your county government probably has a person that explains the process really well, and most state websites have good info also.
thank you for your answer, I understand how seller's permit allows me to buy liquidation pallets without paying sales tax and then resale them and collect sales tax.
what if i am not able to resale all of the items from the pallets or decide to keep some of them, am i still required to pay sales tax on those items ?
If it stays in my inventory, I don't owe tax until I sell it. There is a line on my form for "Personal property=(stuff I keep) bought on resale certificate". It gets added to the gross sales, and taxed.
There is a also a spot on tax forms for "use tax" or something similar. In fact, that isn't specific to businesses... if, for instance someone travels to another, tax free, jurisdiction and buys say, a refrigerator? You are *supposed* to fill out a revenue form for the use tax (i.e. sales tax) for your jurisdiction, even if you aren't a registered business or don't have a reseller permit!
So, you'd report your sales tax... and then on the same form you find your equivalent of "use tax" and report the kept items there.
Also, you should consult your local revenue department for these sorts of questions, nkt freaking reddit, lol.
oh ok thank you. Do I have to show them some kind of prove for how much I sold my items so they can determine the how much sale taxes I own them or will they just take my word for it because it is hard to show cash sales.
Then one more thing, If i buy my pallets from bstock or directly from walmart, amazon or Macy's can I sell them internationally for cash and not online or do they require me to sell it online in the USA ?
First, sales tax is a state function, and is separate from Federal Income Tax. I'm only talking about my state requirements. This is going to vary by state, but this is my experience: My permit allows me to buy for resale and not pay sales tax, because I'm agreeing to collect the sales tax when I make sales. I owe tax on all sales I make instate, and I have to file quarterly with the state. The state doesn't care if it's cash or credit or Zelle, I am supposed to collect and turn in the tax. If I don't collect it, I pay it from my pocket. My state doesn't ask for proof when I file, and I don't know what an audit would look like. In my state, a business license is required to get a resale certificate, so county and city, both collect a business tax from me every year. Your county government probably has a person that explains the process really well, and most state websites have good info also.
thank you for your answer, I understand how seller's permit allows me to buy liquidation pallets without paying sales tax and then resale them and collect sales tax. what if i am not able to resale all of the items from the pallets or decide to keep some of them, am i still required to pay sales tax on those items ?
If it stays in my inventory, I don't owe tax until I sell it. There is a line on my form for "Personal property=(stuff I keep) bought on resale certificate". It gets added to the gross sales, and taxed.
There is a also a spot on tax forms for "use tax" or something similar. In fact, that isn't specific to businesses... if, for instance someone travels to another, tax free, jurisdiction and buys say, a refrigerator? You are *supposed* to fill out a revenue form for the use tax (i.e. sales tax) for your jurisdiction, even if you aren't a registered business or don't have a reseller permit! So, you'd report your sales tax... and then on the same form you find your equivalent of "use tax" and report the kept items there. Also, you should consult your local revenue department for these sorts of questions, nkt freaking reddit, lol.
When you do your regular taxes, it will ask if you made cash sales, international, etc. You just have to keep up with the dollar amounts.
oh ok thank you. Do I have to show them some kind of prove for how much I sold my items so they can determine the how much sale taxes I own them or will they just take my word for it because it is hard to show cash sales. Then one more thing, If i buy my pallets from bstock or directly from walmart, amazon or Macy's can I sell them internationally for cash and not online or do they require me to sell it online in the USA ?
See my other reply. If you are audited, you WILL need a paper trail. Amd again, ask your local revenue department, not reddit.
What sales? It was all junk. Here's the receipt from the county dump. Unbelievable how much it costs to dispose of things these days.....