Jump to content



Photo
- - - - -

Wholesale and sales tax?


This topic has been archived. This means that you cannot reply to this topic.
8 replies to this topic

#1   djcess

djcess
  • Members
  • 3 posts

Posted 04 April 2008 - 06:02

Hi, I hope someone can help me with this. I get my products by wholesale from the manufacturer to sell stuff online. Now I have customers who wants to buy products by bulk/wholesale from me.. Do I charge them sales tax? The manufacturer gets my tax ID and doesn't charge me sales tax, so if I sell my products by wholesale I believe I shouldn't charge them tax too since it's for reselling purposes? /huh.gif' class='bbc_emoticon' alt=':huh:' />


Please help..thanks!

#2   Coopco

Coopco
  • Members
  • 9,557 posts

Posted 04 April 2008 - 07:38

Hi, I hope someone can help me with this. I get my products by wholesale from the manufacturer to sell stuff online. Now I have customers who wants to buy products by bulk/wholesale from me.. Do I charge them sales tax? The manufacturer gets my tax ID and doesn't charge me sales tax, so if I sell my products by wholesale I believe I shouldn't charge them tax too since it's for reselling purposes? /huh.gif' class='bbc_emoticon' alt=':huh:' />
Please help..thanks!

Sounds right to me.


The Coopco Underwear Shop



If you live to be 100 years of age, that means you have lived for 36,525 days. Don't waste another, there aren't many left.

#3   Java Roasters

Java Roasters
  • Members
  • 2,145 posts

Posted 04 April 2008 - 13:16

It sounds right but I would still check with ALL the tax departments in your area. Also get a copy of their paperwork (company registration or what you sent to your wholesaler) that you will need (photocopy) and keep it on file. That way if you loose your osC database you will still have a record of it for the gov't.

Ignorance is not an excuse for not collecting or paying tax and you are liable for it. If you are supposed to collect tax and do not, you still have to pay it to the gov't out of your pocket. It sounds like you don't have to collect but double check first and try get it in writing from each tax level (go and see them (local offices) and ask for a letter stating what tax you should collect from retail and wholesale), they are there to help you and will provide you with all the info that you need but they are human and make mistakes. That way if they are wrong or there is a disagreement with the gov't 5 years from now you have written proof that they said not to collect tax and not just "some person at the tax office when I called said I don't have to" because that will not hold up and you will be liable.

Don't want to scare you, just cover your butt. You can also ask your wholesaler what paperwork they keep and for how long. Others in similar businesses can be a wealth of information, just ask ... but get it in writing from the gov't also.

#4   djcess

djcess
  • Members
  • 3 posts

Posted 05 April 2008 - 08:31

Thank you both for your help. I'm gonna do my research and get the proper permits from the buyer.

#5   desiredin

desiredin
  • Members
  • 278 posts

Posted 08 April 2008 - 13:04

Is the manufacturer in the same Country/Province/State as you? If your country does not have a Country-Wide sales tax, and only a State/Privincial tax and you are not in the same state/province as your manufacturer/distributor then they most likely not entitled to collect tax from you. If they are out of country, obviously they do not charge you their taxes as you are not in their jurisdiction.

Here in Canada, we pay country wide taxes on every purchase wether it is from manufacturer, wholesale, or retail. And we have to charge our customers for it as well. However, we get a tax break on the taxes we paid when we submit our taxes. Not before.

#6   Java Roasters

Java Roasters
  • Members
  • 2,145 posts

Posted 08 April 2008 - 14:38

Here in Canada, we pay country wide taxes on every purchase wether it is from manufacturer, wholesale, or retail. And we have to charge our customers for it as well. However, we get a tax break on the taxes we paid when we submit our taxes. Not before.


Incorrect which is why everyone needs to find out for sure from their LOCAL tax offices what taxes do apply for their particular situation. I am in Canada and do NOT pay tax on purchases from our suppliers (for our main product) and do NOT charge our customers federal or provincial tax on their purchases. Taxes paid and collected depend on what province you are in and ALSO what products you are purchasing/selling. Products can be taxable, zero rated or tax exempt. In a simple way if they are taxable you most likely will be charged federal tax by your supplier and will be provincial tax exempt (provided you supply them with the proper paperwork), you would then charge your customers federal and provincial tax as required. If your product is zero rated you will not be charged federal or provincial tax when purchasing products and will not charge your customers tax either but will still have the tax rebates available to you that companies that charge tax are entitled to. If your products are tax exempt then their is no tax on either end and no tax rebates either.

Then there is shipping which is a taxable product which at least for Ontario you have to charge the appropriate tax including HST for those provinces.

All products are different and every province is different so you need to check with your local tax offices to find out what is correct for you.

#7   desiredin

desiredin
  • Members
  • 278 posts

Posted 08 April 2008 - 17:59

Incorrect...................All products are different and every province is different so you need to check with your local tax offices to find out what is correct for you.

Let's not confuse the subject.

In a matter of speaking. In terms of GST, it's federally regulated by /Canada Revenue Agency/ Revenue Canada and locality has nothing to do with it. Not to mention that I used my advice loosely as there are only a small handful of products that are federally exempt from taxes. And those products are not generally purchased on-line.

The product you deal with in particular, is far from the norm in terms of online shopping. Because coffee beans are considered "Basic Croceries" here in Canada, then yes, it is excempt along with a small handfull of other grocery items. And not all grocery items are covered. But the majority of shops out there are not dealing with products, or services that fall under the "Zero-Rated" bracket.

As well, if you're not meeting the minimum dollar numbers for sales for a Small Business, GST collection/filing is voluntary. Same probably goes for your provincial tax. But this is where checking your localities comes into play. But you still have to pay GST on all your items YOU purchase. You just do not collect it from your customers in your sales.

But just to clear things up. In terms of GST and normal products.....
I deal in books, DVDs, and other supplies for a particular niche market. I also deal in some electronics, and gizmos. I import probably 95% of the products I sell from countries all over the world.

When I import products, (U.K., Italy, France, Germany, China, Japan, Germany, U.S. (which is part of NAFTA)), I still have to pay GST to import them. When I deal with manufacturers and distributors within Canada. I still have to pay GST. But all of this is reclaimed (including your own office supplies in total or in portion depending on circumstances) as ITC (input tax credits) when I file my GST returns.

#8   jhande

jhande
  • Members
  • 2,236 posts

Posted 26 May 2008 - 07:17

Thank you both for your help. I'm gonna do my research and get the proper permits from the buyer.


For your sake I would carefully research the matter with local authorities.

My state does not have a sales tax and the business tax law is pretty lenient, but...

Because I am registered as a retailor I can not sell items as a wholesaler unless I want to fall into a different business tax bracket (mostly a lot more paperwork involved to show and prove that another retailer purchased from me).
- :: Jim :: -
- My Toolbox ~ Adobe Web Bundle, XAMPP & WinMerge | Install ~ osC v2.3.3.4 -

#9   seb1188

seb1188
  • Members
  • 165 posts

Posted 31 May 2008 - 01:03

Everyone is quick to tell others they are wrong, but nobody can be correct, as it's all specific to the region you live in. You need to find someone who lives near you, or ask the tax man.. I'd suggest phoning them up, always the quickest way to an answer!

Edited by seb1188, 31 May 2008 - 01:05.

osCommerce is GREAT. When it works...