What Is a Sales Tax?
The sales tax is a tax on the sale of tangible personal property or taxable service. The sale is to the final user of the product or service. ¿Tangible personal property¿ means that the merchandise can be seen, felt or touched. Personal property is distinguished from real property, as real property refers to land and anything permanently attached to land. What Is a Use Tax?
A use tax is a tax on goods that are purchased outside the taxing authority¿s jurisdiction and then brought into the jurisdiction. A use tax applies to the storing, using, and consuming of tangible personal property. A typical use tax is levied when you buy a car out of state, and are required to pay a use tax on the car when you register it in state. How Much Sales or Use Tax Do I Have to Pay?Each state and locale has a different sales and use tax rate. The amount of tax you pay is generally a function of the amount and value of tangible property you sell, store, or use. When Do I Owe Sales and/or Use Taxes?Sales of tangible personal property to someone else are presumed to be taxable unless statutes specifically exempt it. However, sales of services are presumed to be non-taxable unless statutes specifically include that service. Use taxes are assessed and due on the personal property or service when the sales tax has not been paid. This tax is designed to discourage the purchase of products that are not subject to a sales tax. What Happens if I Report the Wrong Amount on My Tax Forms?
State and/or local tax jurisdictions execute compliance audits to verify that the tax accountability you reported and payments made represent your financial commitments. A business that fails to follow a jurisdiction's laws may be subject to interest payments, penalties, property seizure and perhaps imprisonment. Because you are required to pay the correct amount of tax and account for your business purchases and sales, it is essential to keep adequate records. Do I Need a Lawyer to Help Me with My Sales/Use Tax Issues?
Sales/use tax laws are very complex and confusing. To make matters worse, every state has different sales and use tax laws and different appeal processes. An attorney can help you understand your state's sales and use tax laws and help you comply with the tax rules and regulations. Additionally, a lawyer can help you contest the amount of tax due or bring an appeal. |
