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tackroom 01-09-2012 11:33 AM

Charging Taxes on Consignment tack
 
Hi,
I have read many mixed things about charging sales tax on consignment items. I was just wondering if anyone on here sells consignment items and if so do you charge sales taxes.
Thanks

Delfina 01-09-2012 11:55 AM

Sales Tax isn't determined by public opinion.

You need to consult with the taxing authority in the specific area in which your business would be located to find out what your obligations towards charging it are. If you are legally responsible to collect sales tax and you do not, the taxing authority will force YOU to pay the taxes along with a whole slew of penalties and interest.

Attempting to dodge the tax authorities isn't a good idea either. In the US they can go back many years and oh do the taxes, penalties and interest add up fast! I've worked in Sales/Use tax and gone through many, many audits and every single audit has ended up somewhat pricey and these are large corporations who were doing their absolute best to collect and remit sales taxes properly.

Speed Racer 01-09-2012 12:01 PM

If you're licensed to do business in a particular state, you're required to charge sales/use tax.

If you're non-licensed and just selling as an individual, or a business that isn't licensed in a particular state, you don't need to collect it. The person buying the item is required to claim use tax on the merchandise on their tax returns.


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