Delaware makes it impossible

[CJvending]

http://revenue.delaware.gov/services/current_bt/taxtips/vending.pdf

 

 

 

 

License and Gross Receipts Requirements

Vending machine owners are required to pay an annual $5 fee ($3 for cigarette vending machines) for each vending machine-- which must be renewed annually on or before December 31st of each year. A cigarette retail license is also required for operator selling cigarettes. The fee is $15 for a three-year period and must be renewed on or before December 31st every third year.

A retailer's license is also required -- $90 for the first location and $40 for each additional location -- renewed annually on or before December 31st of each year

 

 

 

Regulatory and Local Requirements

The Business License Issued by the Division of Revenue is not a regulatory license and the issuance of such license does not attest to the qualifications of the applicant to perform the activity described on such license. Many local jurisdictions have requirements for a business license and may have restrictions concerning the locations of conducting the referenced business activity. Please check with the local government office in the town, city or county in which you will conduct your business.

The State of Delaware also has a Division of Professional Regulations. Many occupations and some types of equipment have regulatory requirements. Please contact the Division of Professional Regulation for more information.

 

 

 

 

Annual fee per machine, plus retailers license for each location plus the possibility of local permits including business permits and vending permits. Btw, the NBVA says that Delaware operators are not subject to sales tax. But for the life of me I have scoured the state's website and cannot confirm this. Any operators out there in Delaware actually turning a profit legally? It appears that (especially for bulk) Delaware makes it quite difficult.

[AZVendor]

The "per Location" they likely refer to is a physical brick-and-mortar location where you operate your business from, not your individual vender locations.  The state has a different definition of "location" than what the vending industry has, so you probably only need one retailer's license.  Now you might need a city license for each city you operate in, but you need to check each city's statues to find out.  I'm not from Delaware, but I'm pretty sure that's what they mean.  The states can be very ambiguous in their regulations, as you have found.  You should actually contact NBVA and ask them for specific information as to the exclusion of sales tax for bulk vendors and what specific products that extends to such as bulk candy, gumballs, toys, stickers, etc.  Also see if you can download a copy of the Delaware statutes pertaining to sales tax (Dept. of Revenue) as well as the ones for your county and city you are based in.

 

Let's be honest, if you have a machine in a non-public location like an employee breakroom, how likely is it that the "Revenooers" will come and find it?  I'll bet most of your competitors don't get all the state stickers, etc. that they should, or maybe any.  I'm not espousing breaking the law and you should try to follow it as best you can.

[CJvending]

AZVendor thanks for your input. And yes you are probably correct in the location requirement (maybe not but it sounds plausible) have you personally had any problems with these type of matters, where you operate?

[AZVendor]

When I ran my vending company, I had a required state license and a required privilege tax license in the city I operated from.  I also had privilege tax business licenses in two other cities because we had machines in those city buildings.  I carried no other licenses in any other cities I operated in because there was no way that those cities would know where our machines were.  I figured that if they ever contacted me I would then get a license.

 

Arizona uses a sales tax deduction called "food for home consumption" that covered grocery stores and other retailers that sold edible products that would not be consumed on the sales location but more likely in the purchasers home.  This was a commonly used deduction used by vending companies and the only exception was sales from machines that made the product sold, such as coffee machines and cup soda machines.  Since we had no commissary of our own, our food sales were also deductible.  We were basically reporting 100% of sales but deducting about 95% due to the food deduction.  The state and cities were fine with this for 16 years until......

 

Phoenix's revenue department, the major city we were based in, then decided that they would interpret the statute differently due to a new aggressive Revenue Dept. head, so that any location that had facilities for purchasers to sit down and consume the products would mean the deduction could not be taken for those sales - even if there was a parking curb to sit on (their words, not mine).  The city then chose "at random" seven vending companies (just happened to be the largest) to audit sales from and we were one of the chosen.  We were fined and taxed going back three years and ended up owing over $14000 in back taxes, the bastards.  A few months after the time ran out to appeal the ruling, the city fired the head of the Dept. of Revenue because he murdered his wife and the new dept. head realized that the statute had been improperly applied, so they reversed the city's stance on it.  Because we hadn't appealed (you had to pay the taxes first then pay an attorney to appeal), we were SOL on the back taxes.

[CJvending]

Dear God, that sounds like a miserable nightmare. I'm truly sorry to hear that. Important question, when they audited your sales, did they actually visit your machines? Or did they simply look at your book keeping work?