I did the Alternative Philly show this summer (wholesale show) and
wrote a good “personal order” to one of the helpers at other
artist’s booths. I don’t normally do personal orders at shows, unless
it’s to other artists and/or their helpers, so I’m a little confused
about the protocol when it comes to tax & such. I’m shipping from
California and charging their credit card, so do I charge them tax?
I know if I was a retail store and was shipping out of state I
wouldn’t charge tax, but for wholesale is that different?
thanks for your help!
I'm a little confused about the protocol when it comes to tax &
such. I'm shipping from California and charging their credit card,
so do I charge them tax?
Every state has different rulings on tax collection. So, I’ll speak
in general terms here so you’ll know what questions to ask. Begin
with looking in your phone book under the state government listings,
and then find Excise Taxes or something similar. Excise tax is also
known as Sales and Use Tax.
If you sell wholesale, each party must have a license. This license
is called a Resale License, Wholesale License or Excise Tax License.
Each party must exchange a written document that the Excise Tax
division will supply to you free of charge, and often online for
printout. If they don’t have the Wholesale License, then you must
Many states now also use the Use Tax, which is a tax on equipment.
You need to check, because each state will be different. Here, the
use tax is not charged if the equipment is used, or if the initial
outlay is over $300 for any one piece of equipment, as an incentive
for businesses to invest and stay put in the state. Equipment for
jewelers can range from durable goods, say a torch or rolling mill,
to non-durable equipment such as fluxes, buffs and polishing
compounds, gases, pickles, etc. Usually, anything that can be seen on
a piece of jewelry is exempt from use tax, but anything that can’t be
seen (intangible), is charged use tax. This lies in the definition
of the end buyer paying the excise or use tax.
You’ll want to speak to a Taxability Specialist,or a Nexus Specialist
if selling out of state.
If the buyer has a resale # then you can consider it a wholesale
sale and not charge sales tax. If the are out of state then you
shouldn’t charge them tax, with or without the resale #. You are not
obligated to charge sales tax on out of state sales unless you have a
business entity in the state that you are shipping to.
Check your local tax laws. In Ohio, if you ship out of state, then
the recipient pays the sales tax in their state and no sales tax is
charged here ( Provided I don’t have another location in the state to
which I’m shipping - in that case, I would charge 7.5% sales tax.)
Perhaps your state laws are different. In Ohio, one is supposed to
pay sales tax to Ohio when ordering stuff from other
states - although at this time this kind of tax is voluntary.