Legally avoiding charging sales tax
rAD
THEIR credit card? Then only charge them for assembly. Technically, you
didn't sell them any hardware at all.
Woodbutcher
Doesn't matter,you still supplied a tangible service therefore it is
still taxable. Only sure way to find out is contact your states
Revenue Dept. Most people think it's simply "Sales Tax" when in fact
it's "Sales and Use Tax" which covers both goods and services.
BTW there are only a couple of states that have strictly "Sales Tax"
Jim Turner
Depends on the state you live in. Some tax labor. If you don't sell
them the parts, then you don't make any profit on the parts.
rAD
"Jim Turner" <it...@earthlink.net> wrote in message
news:a19ec128539db7bf...@free.teranews.com...
God you guys are thick. I KNOW services are taxable. But the bulk of the
value in a computer you build is in the hardware purchased, not in YOUR
labor. So you could reduce the taxable amount from say $1000 down to $100 if
you make the customer purchase the parts from the supplier on the Net. And
whether you charge them a markup on the parts or just strictly charge them
for your time is irrelevant. It amounts to the same thing if the amount
charged is the same.
The snag here is that people are usually tight-fisted and don't want to pay
you until the computer is up and running perfectly.
Al Dykes
Then they have to pay the tax. What's the point ?
OTOH; I've alway done small business consulting and used the fact that
I wasn't a reseller for anything to make the case that I was more
objective and always recommended solutions that were the best for the
customer. I've always been able to use the internet to get best prices
and be competitive with integrators that were tied to a brand.
I produce a bill of materials with where-to-buy-from specifics
and hand it to my client.
--
Al Dykes
-----------
ady...@panix.com
Woodbutcher
Okay the thick one will try and explain it to you AGAIN, (1) They buy
the parts,BRING them to you to assemble,you charge for assembly
ONLY,you tax your service ONLY. (2) They buy the parts, bring them to
you to assemble,you charge a markup and service,YOU TAX THE WHOLE
THING. If you charge a markup you are in essence selling them the
parts. Only other way around it is beef up the service charge for you
books and don't list any markup. Legally it any parts are shipped to
your business that relate to your business whether for personal use or
resale,the business is required to pay the sales tax.
rAD
"Woodbutcher" <Woodb...@homealone.com> wrote in message
news:63vsiv0ri82rc9elh...@4ax.com...
If you live in a high tax state, this seems to be the best way:
You go to their house or biz with your laptop. You sit down with them and
pick out the parts online and they pay for them with THEIR card. You tell
then to give you a call when the boxes come. You pick up the boxes, take
them away, assemble, bring back the completed unit. You charge them a
service fee only.
From my experience, people want you to come to them. They're also cheap and
generally don't want to pay in advance. But a credit card purchase is easier
for them cuz they don't pay for 28 days. If they can't get a credit card
they may not be worth dealing with anyway.
Jim Turner
You are the one being thick here. There is more that adds to the cost
of parts than sales tax.
1. The sales tax paid is often offset by the shipping and handling
charge on small orders. (The parts needed to make a single computer
will be a small order) Larger orders, like a real dealer/system
builder does will have a much lower shipping cost, which will more
than make up for the sales tax difference.
2. If the mail order company has a "presence" in your state, they
still must collect sales tax.
3. If you are a real dealer that does more than one or two systems a
month, then you can get deals from REAL distributers that will allow
you to sell the parts to your customers at about the same internet
price, including sales tax, and still make a bit of a profit.
4. Your method of doing systems would be an RMA/warranty nightmare.
What is your real goal? To sell your customers a quality system at a
very good price? Sell to your customers at the lowest cost no mater
what? Or avoid sales tax whenever possible, even if there is no real
savings and the hassles go up? It's your business, but I wouldn't do
it that way, and never have.
mchiper
>You are the one being thick here.
Extra ordinarily so, I'd say.
>There is more that adds to the cost of parts than sales tax.
<snip> A really fine effort.
Which doesn't even touch on,
Buying in quantity, rebates, and the "food chain".
(Any one of which makes sales tax pale.)
Or, inter State agreements,
and
Who pays sales taxes whether the seller collect's them, or not.
----- My favorite quote -----
"A pessimist sees the difficulty in every opportunity;
an optimist sees the opportunity in every difficulty."
Sir Winston Churchill (1874-1965)
- One test is worth ten thousand words -
Northman
<Woodb...@homealone.com> wrote:
<snip>
(2) They buy the parts, bring them to
>you to assemble,you charge a markup and service,YOU TAX THE WHOLE
>THING. If you charge a markup you are in essence selling them the
>parts. Only other way around it is beef up the service charge for you
>books and don't list any markup. Legally it any parts are shipped to
>your business that relate to your business whether for personal use or
>resale,the business is required to pay the sales tax.
<end>
How can anyone get away with "marking up" parts that someone else
already paid for? if you buy a car and take it to the shop for
service do they charge you for the labor, parts installed, and a
"markup" on the car itself to get it back?
mchiper
In alt.comp.hardware.pc-homebuilt, Msg ID: <bglttu$5fc$1...@panix2.panix.com>
ady...@panix.com (Al Dykes), wrote:
>In article <kpmXa.6216$WM4...@newsread1.news.atl.earthlink.net>,
>rAD <bl...@blow.org> wrote:
>>I haven't tried this, but suppose you have the customer order the parts with
>>THEIR credit card? Then only charge them for assembly. Technically, you
>>didn't sell them any hardware at all.
>>
>
>Then they have to pay the tax. What's the point ?
The point is you don't understand.
f the customer orders the parts they CAN avoid the sales tax.
If the business man orders the parts they CAN'T avoid the sales tax.
The sales tax is imposed at the POINT of SALE, to the consumer.
Case in point - The purchases are made on the Internet....
No reseller discounts are involved..
--
Ray
JAD
the customer the equivalent to the tax I will be charged 1/4 ly.
"rAD" <bl...@blow.org> wrote in message news:kpmXa.6216$WM4...@newsread1.news.atl.earthlink.net...
JT
to quote myself
There is more that adds to the cost of parts than sales tax.
1. The sales tax paid is often offset by the shipping and handling
O |V| 3 G A
selling a service (not a physical product) then they get past UK VAT (tax).
tim
"mchiper" <not...@yahoo.com> wrote in message
news:svi3nvgm60lv5imb2...@4ax.com...
mchiper
In alt.comp.hardware.pc-homebuilt, Msg ID: <216c189b7ca5c646...@news.teranews.com>
JT <datacare@localhost>, wrote:
>to quote myself
You are quoting a know it all ass hole. :)
>There is more that adds to the cost of parts than sales tax.
No SHIT?
>1. The sales tax paid is often offset by the shipping and handling
>charge on small orders.
And free shipping is often in a part of slightly larger orders.
So don't be an ass hole and try to buy a single NIC card.
>(The parts needed to make a single computer will be a small order)
You must build real SHIT.
>Larger orders, like a real dealer/system
>builder does will have a much lower shipping cost, which will more
>than make up for the sales tax difference.
Your distributor buys bull shit quatities compared to even the SMALLEST
mail order house, and sells you (or charges you for the cost of)
his bull shit OBSOLETE inventory.
>2. If the mail order company has a "presence" in your state, they
>still must collect sales tax.
And if I don't have a 'presence' in my state, they don't. :-)
>3. If you are a real dealer that does more than one or two systems a
>month, then you can get deals from REAL distributers that will allow
>you to sell the parts to your customers at about the same internet
>price, including sales tax, and still make a bit of a profit.
This is "real" approximate, generalizing Bull SHIT.
>4. Your method of doing systems would be an RMA/warranty nightmare.
RMA/warranties are nightmares.
I can't remmember anything but DOA, no matter where/how purchased.
So practice good Quality Control.. Try it before you pay the CREDIT CARD charge.
Does your "distributor" accept credi cards?
>What is your real goal? To sell your customers a quality system at a
>very good price?
No. My goal is to provide my customers QUALITY systems, and QUALITY service
while beating the brains out of ass holes like you (cost wise).
>Sell to your customers at the lowest cost no mater what?
Yep.. No complaints..
Mostly smart people.
Glad to send you those few looking for "bleeding edge" crap.
>It's your business, but I wouldn't do it that way, and never have.
The you don't have a clue, do you?
--
Ray
JT
>
> In alt.comp.hardware.pc-homebuilt, Msg ID: <216c189b7ca5c646...@news.teranews.com>
> JT <datacare@localhost>, wrote:
>
>
>>to quote myself
>
>You are quoting a know it all ass hole. :)
>
>
>>There is more that adds to the cost of parts than sales tax.
>
>No SHIT?
>>1. The sales tax paid is often offset by the shipping and handling
>>charge on small orders.
>And free shipping is often in a part of slightly larger orders.
>So don't be an ass hole and try to buy a single NIC card.
Can do it if I need to. Do it all the time from my distributers. Shipping
is always payed for. "Free shipping" is figured into the price from
supplier. If you buy more, even if not all in the same order prices go down
from a real distributer.
>
>>(The parts needed to make a single computer will be a small order)
>You must build real SHIT.
No, it is just that for a real distributer anything under $5000 is a small
order, and handled as such. Real shit is what you get when you mix and
match from everywhere.
>
>>Larger orders, like a real dealer/system
>>builder does will have a much lower shipping cost, which will more
>>than make up for the sales tax difference.
>
>Your distributor buys bull shit quatities compared to even the SMALLEST
>mail order house, and sells you (or charges you for the cost of)
>his bull shit OBSOLETE inventory.
My distributers order by the Truck/Boat load and sell to your mail order
houses. They deal direct with Manufacturers. If they have an excess of
Obsolete stuff, they dump it to the mail order houses such as you buy your
junk from.
>
>>2. If the mail order company has a "presence" in your state, they
>>still must collect sales tax.
>
>And if I don't have a 'presence' in my state, they don't. :-)
>
>>3. If you are a real dealer that does more than one or two systems a
>>month, then you can get deals from REAL distributers that will allow
>>you to sell the parts to your customers at about the same internet
>>price, including sales tax, and still make a bit of a profit.
>
>This is "real" approximate, generalizing Bull SHIT.
Not even. With any kind of volume, which anyone with any business will get,
your costs from a distributer will always be lower than the Internet/Mail
order prices. Of course if you are only a garage operation that does only
one or two systems a month, then you will not get very good prices. If you
are doing 2 systems a week and some accessorys/repairs, you will get your
parts cheaper from a distributer (provided you are a real business with
tax-id, business bank account, etc.) If you do more, your price drops, and
it is based on estimated annual sales, not just one order. If it is a real
business, you should have no problem getting to the quantities to beat any
internet/mail order company on the same items.
>
>>4. Your method of doing systems would be an RMA/warranty nightmare.
>
>RMA/warranties are nightmares.
>I can't remmember anything but DOA, no matter where/how purchased.
>So practice good Quality Control.. Try it before you pay the CREDIT CARD charge.
>Does your "distributor" accept credi cards?
If you see lots of DOA from where you buy parts, there is a problem with
that source. My DOA rate is about 2%, but then I don't go by price alone.
DOA is a problem that is made worse if you get parts from multiple sources.
Company A says ram was fine. Company B says Motherboard was fine. They
don't work together. A real distributer will handle the problem. They have
a fair handle on what works with what, and you won't have buck passing. All
major distributers will do Credit card, Company check, Electronic Fund
Transfers, and when you are a customer long enough, or big enough, Net 30.
Good quality control gets it out the door working. There are still those
systems where something breaks in less than a year. You do warranty you
work for a year like a real company don't you? Do your customers have all
the ordering information, or do they rely on you for that? What do you do
when the system motherboard starts having problems at 3 months, and your
customer doesn't remember where they bought the parts from?
>
>>What is your real goal? To sell your customers a quality system at a
>>very good price?
>
>No. My goal is to provide my customers QUALITY systems, and QUALITY service
>while beating the brains out of ass holes like you (cost wise).
If you that is your goal, then you have a lot to learn, as you will have a
hard time matching my price and quality, and your service will never be
able to make the grade.
>
>>Sell to your customers at the lowest cost no mater what?
>Yep.. No complaints..
>Mostly smart people.
>Glad to send you those few looking for "bleeding edge" crap.
Bleeding edge is not what we are talking about. Even in the value area, you
method of operation is for no-it-alls that don't mind the hassles and don't
know much at all. People that think they are smart, and getting over, but
really just making it tougher on themselves.
>
>>It's your business, but I wouldn't do it that way, and never have.
>The you don't have a clue, do you?
Been doing it long enough to have more clues than you.
PS why does it take you so long to respond? Had to wait to get a working
computer again?
mchiper
In alt.comp.hardware.pc-homebuilt, Msg ID: <9232741398ce215c...@news.teranews.com>
JT <datacare@localhost>, wrote:
>
>PS why does it take you so long to respond? Had to wait to get a working
>computer again?
It's a bull shit thread.. So I don't have it watched..
You have all the answers.. So what's the point?
If I couldn't put togther a machine that would satisfy me for 5 years,
for HALF the price of the least expensive machine YOU would sell me
I'd hang up my jock strap and quit.
--
Ray
JT
Seeing as how you have no idea of the prices I can sell for, and you just
have a problem because someone thinks your business practices are
amateurish and just an excuse to dodge taxes without giving better prices
or adding value, your childish response is expected. The BS in this thread
is what you started with your amateurish idea in the first place.
mchiper
In alt.comp.hardware.pc-homebuilt, Msg ID: <00c7312f133c218b...@news.teranews.com>
JT <datacare@localhost>, wrote:
Like I said..
It's not my thread, and so I haven't watched it.
But, since we are on the subject.
Sales Taxes make retailers into tax collectors.
They cannot apply to retailers operating in other states.
Both the federal and State governments can impose EXCISE taxes.
They are included in the prices charged to consumers, by anybody.
They are collected from manufacturers of the goods sold in this country.
Sales taxes can also be imposed on services.
Provided the services are performed in the state, by people who
are licesed to do business in the state.
But some states want to tap into unlicensed activities too.
Some want you to pay for a garage sale permit.
Others want you to declare it on your income taxes.
Some businessmen say they want a level field.
They all vote Republican.
Dumb shits, is what I call them.
They think they are capitalists !!
--
Ray
Roger M
rAD wrote:
Sorry but imho that's stupid. Why work for a service fee only when you could
make a markup on the parts also. So you have to pay taxes on the part, guess
what, the customer is the one paying the taxes you're just acting as an agent
for the state when you collect them. In the state I live in the state give a 1%
discount on the total tax for doing that. It's not much but add it to the profit
from the mark up and it surely is worth the effort to do it.
Roger
<<< snipped the rest >>>
Roger M
rAD wrote:
And you didn't make any money on the parts either. I've been in
business for over twenty years. I went into business to make a living,
the best living I can, I mark up all parts I sell. I would not sell
anything without making a profit on it, ever. No way I'd let a customer
order parts for me to install. I would however require a customer to pay
me in full for parts in advance including my mark up before I'd order
anything. If I couldn't do it that way I'd find something else to do.
Every penny you don't make is a penny you'll never have. So you have to
fill out retail tax forms for the state, it takes me about 1/2 hour a
month to do that. Well worth the time to me. I'm not a greedy person at
all but I didn't go into business to make friends.
Roger
Roger M
Bill Turner wrote:
> On Tue, 25 Nov 2003 00:41:18 GMT, Roger M <rma...@adelphia.net> wrote:
>
> >I'm not a greedy person at
> >all but I didn't go into business to make friends.
>
> _________________________________________________________
>
> Piss poor attitude, IMO. The best companies make money AND have
> customers which are loyal and "friendly" with the personnel.
>
> Perhaps you could post your company's name and address so we would know
> who to avoid?
>
> --
> Bill, W6WRT
Yeah Bill tell me how to conduct my business. All of my business at this
point in time is repeat customers from a very large list of customers that
I treat fairly. I don't advertise because I don't have to. I am friendly
with my customers and my customers understand I'm not in business for my
health. A person that expects you to compromise your way of making a living
by cutting them a break is not a friend at all. My friends and customers
wouldn't think of asking me to do so. The people that would treat me like
that are shunned and I won't do any work for them. Yes it is their loss
because in my field and am one of the best in my area. Above that all of my
work has a one year parts and labor warranty. No questions asked. In the
last several years the only warranty work I've had to do has been because
of defective components not because of workmanship.
So please do tell me about my "piss poor attitude" it's obvious you read
what I wrote but didn't understand a single word of it. You're probably the
guy that likes to go in and be a phony friend to service personnel so you
can get something for free. You are exactly the person I'd never do any
work for, ever.
One other thing, purposely avoiding charging or paying a states retail
sales tax is against the law, it is, believe it or not called tax evasion.
Tax evasion is not just a federal thing and states when informed of people
doing it will pursue it vigorously.
Roger
Roger M
Bill Turner wrote:
> On Tue, 25 Nov 2003 03:54:54 GMT, Roger M <rma...@adelphia.net> wrote:
>
> (mass nonsense snipped)
>
> >One other thing, purposely avoiding charging or paying a states retail
> >sales tax is against the law, it is, believe it or not called tax evasion.
>
> _________________________________________________________
>
> I think I see your problem, Roger. You are simply careless with what
> you say. Tax avoidance is legal; tax evasion is not. They are two
> different things. Ask any CPA.
The only way to avoid paying taxes is to buy non taxable items and resale them
to non taxable or tax exempt persons or entities. I'm very familiar with what
you can and can't do while conducting business.
>
>
> Carelessness with language explains much of your previous post.
Bad assumptions on your part explains your post.
>
>
> I notice you chose not to post your business address as requested.
> Probably a wise move.
>
No reason to post any information here. I don't need your business or business
from anyone here for that matter. I find it to be a "wise" move to not post
personal information of any kind on usenet and the internet in general. You
should probably find another hobby, I can't imagine criticizing people on
usenet can be very gratifying.
Roger