Question about reselling..

[eflat]

I'm in the process of getting my reselling liscense but in the mean time I am going to order the parts from Newegg and Monarch and test the waters a little.

Does anyone know how the tax law on this works (it will be a registered business in less than 2 weeks)

That is, if I buy something and pay sales tax, do I have to pay sales tax again when it is sold?

 

[EyeMWing]

Yes. They tax money EVERY time it changes hands.

 

[eflat]

Originally posted by: EyeMWing
Yes. They tax money EVERY time it changes hands.

But I thought the whole point of getting a reselling liscense was not to have to pay tax twice. That is, you buy stuff tax exempt and than charge tax when you sell it.

What are your credentials? Do you know this for sure or are you just guessing?

 

[EyeMWing]

Originally posted by: CitizenDoug

Originally posted by: EyeMWing
Yes. They tax money EVERY time it changes hands.

But I thought the whole point of getting a reselling liscense was not to have to pay tax twice. That is, you buy stuff tax exempt and than charge tax when you sell it.

What are your credentials? Do you know this for sure or are you just guessing?

I did exactly what you're about to do for years. Of course, I never resold anything I'd paid sales tax on, so I never really paid attention to that little aspect. Everything I ordered was over the internet, across state lines.

 

[eflat]

Well I am in the process of running a business and need to order some stuff to make so prototype computers for show before the thing actually gets off the ground.

So I need to know if I buy stuff (once I have the tax ID number) from places like Newegg if I need to pay sales tax.

 

[desteffy]

welcome to the IRS audit list! have a nice day

 

[eflat]

Originally posted by: desteffy
welcome to the IRS audit list! have a nice day

Well I'm not very concerned about the IRS audit list because I'm going to save all my recipts and will have a fvcking business liscense. I plan to be selling $50,000 worth of merchandise a month so I'm obviously not trying to break rules.

What I am trying to learn is the rules. Which apparently nobody here knows. I guess the business savvy come to the forum on the weekdays.

 

[eflat]

Originally posted by: desteffy
welcome to the IRS audit list! have a nice day

Who declared today idiot day here on Anandtech anyways?

 

[keeleysam]

Originally posted by: CitizenDoug

Originally posted by: desteffy
welcome to the IRS audit list! have a nice day

Who declared today idiot day here on Anandtech anyways?

Why did you reply to that twice? lol.

 

[allisolm]

Check with your state as every state is different. In Fl, you don't pay sales tax on items you are reselling by providing the company you're buying from your tax certificate/resale certificate #. Then you charge the end user the tax (unless they are a sales tax exempt entity). If you don't have your certificate yet, you pay the tax and add that amount into the price of the item as part of your pricing structure when you sell it. Things may be different if you are selling to customers out of your state.

 

[Injury]

Originally posted by: CitizenDoug

Originally posted by: desteffy
welcome to the IRS audit list! have a nice day

Who declared today idiot day here on Anandtech anyways?

Who declared "Who really wants to help the guy who is sounds like a jerk anyway" day? (coughYOUcough)

 

[JulesMaximus]

Originally posted by: CitizenDoug
I'm in the process of getting my reselling liscense but in the mean time I am going to order the parts from Newegg and Monarch and test the waters a little.

Does anyone know how the tax law on this works (it will be a registered business in less than 2 weeks)

That is, if I buy something and pay sales tax, do I have to pay sales tax again when it is sold?

No, you are reselling it. You will not have to pay tax on it, but you will have to charge sales tax when you sell it. You need to apply for a resellers license and supply the companies you buy products from this number.

Edit-You already applied for this. You need to let Newegg and Monarch know that you are going to be reselling these items and that you will fax them a copy of your resellers certificate when you get it. They may or may not accept that until they actually have a copy of your resale certificate on file though.

 

[daveymark]

each state is different. for free advice, check out your local SCORE, usually there's one at every community college