Paying sales taxes in TN...

[mississippizip]

Ques....

Do you buy your candy tax free and then pay sales tax later?

or

Do you buy candy with tax and not pay sales tax at the end of the year?

or

Is there another senerio I'm not aware of?

Please answer if you are in Tennessee. Thanks so much. I'm going to Sam's this week with my Business account that will allow me to buy tax free - but I want to make sure that's what I need to do.

Thanks for your help and answers in advanced.

[AmuseStar Vending Co]

As long as you have a tax exempt number, you can open the account. I buy tax free, and don't pay sales tax later. I am exempt from all sales taxes.

I am in Sparta TN (10 miles from Cookeville), where are you located?

Kyle

[mississippizip]

I do have a tax exempt number. Why are we exempt from Sales Tax? We are selling a product. Just trying to understand.

I'm in Memphis.

Thanks!

[mississippizip]

As long as you have a tax exempt number, you can open the account. I buy tax free, and don't pay sales tax later. I am exempt from all sales taxes.

I am in Sparta TN (10 miles from Cookeville), where are you located?

Kyle

I did some research this morning and posted it here under this forum post..

http://www.vendiscuss.com/forums/view_topic.php?id=217&forum_id=17&jump_to=14246#p14246

We have to pay quarterly gross tax. See my post for all the info and links from the TN gov site. But basically you just need to go here http://tennessee.gov/revenue/tntaxes/gross.htm for all info for bulk vending.

[caserri]

All states are different but the simplest way to look at it is this...

If sales tax collection is mandated by your state, you must pay the sales tax on your product by either of the 2 methods below.

• You pay it at the time you make your purchase. OR 
• You buy it tax free, then you collect tax from your customer and forward it to the state either monthly, quarterly or yearly.

Either way, the state does expect to get their cut of the action.

Obviously, in bulk vending, option number 1 is the easiest and most common.

Steve

[mississippizip]

This is for TN only. For bulk vending that are charity sponsored (quarter machines only), we do NOT pay sales tax. We pay gross tax once a quarter. Not sure what the real difference is at this point, but apparently there is since the state make a deal about the difference.

[caserri]

mississippi,

Just curious, I wonder how they differentiate a charity sponsored machine from a non-charity sponsored machine. It seems easy enough to distinguish on the surface but for vendors like myself who run both types, keeping track of which machine owes tax and which doesn't would be a nightmare for the state to figure out unless they visited each location. What would stop everyone from claiming all their machines as charity sponsored?

Also, are you saying that they expect no sales tax even though you are selling items for profit? I don't know, I'm just asking.

Steve

[mississippizip]

I've posted full details and links to various resources for TN here:

http://www.vendiscuss.com/forums/view_topic.php?id=217&forum_id=17&page=2

_________________________________________________________

http://tennessee.gov/revenue/tntaxes/gross.htm

this is what our state web site says:

class=bodytext"Gross Receipts: Vending

Any person within Tennessee who is operating a vending machine that: (1) is operated for the benefit of a charitable nonprofit organization, (2) dispenses merchandise with a market value of 25 cents or less, and (3) is built so that only a fixed, predetermined price can be paid for the item dispensed by the machine has the option of registering with the Department of Revenue and paying gross receipts tax in lieu of sales tax, in accordance with Tenn. Code Ann. Section 67-4-506. The machine must not be able to return or make change or be able to be adjusted by mechanical, electronic, or other means to change the price charged for the items dispensed by the machine. Vending machines of the type described above that are not operated for the benefit of a charitable nonprofit organization are not subject to this gross receipts tax; they are subject to the full rate of state and appropriate local sales and use tax.

class="bodytext"Operators of machines that are subject to the gross receipts tax must register each organization for which such machines are operated and obtain a machine decal for each machine operated.

[grumpy]

Steve,

Using Ontario information I'm not sure this statement is accurate!

• You pay it at the time you make your purchase. OR 
• You buy it tax free, then you collect tax from your customer and forward it to the state either monthly, quarterly or yearly.

Reasoning is simple you are a reseller, you must collect tax if required. (end sale) When you apply for your tax exemption that is the time to ask for your particular state/province tax rules. In Ontario bulk sales over $0.23 requires submission of RST (PROV) on the sale. GST (FED) starting point is $.027. The government wants the tax on the individual sale not on the bulk sale, this is why you get to buy it RST free in the first place, cannot buy tax free if not reselling. (They get more) If you are a reseller without a exempt status you can subtract the tax paid at time of purchase for the bulk product for the product sold to the retail customer from your remittance.

But to be safe and assured you are doing it right, ask at your local tax office explaining what you are doing and what you are selling. Let them explain it to you instead of you trying to interpret legalize.

[caserri]

Using Ontario information I'm not sure this statement is accurate!

Grumpy,

You are correct. My statement is not accurate at all, if you are in Canada.

The most important thing you can do is consult the proper agency in your state or province. This thread, and the category as a whole, has proven that all states operate in a different manner. I do not disagree with either of you but I can only say how it is done here in Mass. Although it is a bit tricky here because we do not pay or collect sales tax on food so the point, in this case, is moot. On other re-sellables however, the retailer has the options I posted above. While there are some who pay up front when they purchase wholesale, most, choose option 2 and pass the tax burden on to the customer. Either way, Massachusetts gets their cut.

I would hope that everyone researches the rules and regs for their own state independently and does not rely solely on the information presented on these forums.  

Steve