New York State Sales Tax

[Guest Hertreaudo]

Hi cubecart,

I'm about to launch my site for business but I've come across a little snag with sales tax, every city in New York State(point of delivery where I have to charge sales tax to) has a different tax rate.

You can see what I have to deal with here:

http://www.tax.state.ny.us/pdf/publication.../pub718_206.pdf

My question is what do other online merchants in New York do for this?

My only solution is to charge a flat tax 8.375%(the rate for NYC metro area) and issue a refund for any overcharge and eat the cost myself for the few instances of undercharge. Sounds like accounting hell which it will be but what other choice do I have?

I informed the state twice via email about my situation and how my programmer cannot possibly config the proper tax at checkout but they were of no help so far in offering suggestions. I even proposed the same solution above and they just told me I have to collect exact tax, so didn't know if that was a yes or no lol....

OK New York or other state merchants, what's the secret with sales tax ??

thank you,

Tenyu

[roban]

I live in New York State and only charge sales tax to NY customers. I have a flat rate of 8.75% charged to NYS buyers only.

[Guest Hertreaudo]

I live in New York State and only charge sales tax to NY customers. I have a flat rate of 8.75% charged to NYS buyers only.

Hi Roban,

You charge 8.75%(the old New York City rate) for the entire state of New York? Is it legal to overcharge on sales tax as long as the NY Department of Tax and Finance receives all such sales tax collected??

I'll try their phone support tomorrow.

thanks,

Tenyu

[roban]

Sorry my mistake. It's 8.625% in Suffolk County

[Guest CaseyC]

Hi cubecart,

I'm about to launch my site for business but I've come across a little snag with sales tax, every city in New York State(point of delivery where I have to charge sales tax to) has a different tax rate.

You can see what I have to deal with here:

http://www.tax.state.ny.us/pdf/publication.../pub718_206.pdf

My question is what do other online merchants in New York do for this?

My only solution is to charge a flat tax 8.375%(the rate for NYC metro area) and issue a refund for any overcharge and eat the cost myself for the few instances of undercharge. Sounds like accounting hell which it will be but what other choice do I have?

I informed the state twice via email about my situation and how my programmer cannot possibly config the proper tax at checkout but they were of no help so far in offering suggestions. I even proposed the same solution above and they just told me I have to collect exact tax, so didn't know if that was a yes or no lol....

OK New York or other state merchants, what's the secret with sales tax ??

thank you,

Tenyu

Don't think that is correct.....the sales tax is based on the location of the sales outlet, not on the address of the customer.......

[Guest loren antolik]

according my accountant, sales tax is required for any purchase shipped to anywhere in the U.S.. As plain as that.

BUT

it is common practice among most all interstate merchants, and has been for years and years, to only charge sales tax to the customers that are having the product DELIVERED to the same state that the merchant is doing business out of.

in this particular example, the merchant is out of New York, so any customers, in the entire world, that order from his site and have it DELIVERED to New York should get charged sales tax. and that is what cubecart currently does, but it only calculates tax based on the state, and the problem is that New York state sales tax can't be covered under just one rate, there are many rates that vary between 7 and 9.5 % bases not just on what county you are, but sometimes what city you are in. So unless cubecart offers a way to store all of those rates, it will always end up calculating the sales tax incorrectly. and this probably goes for ALL states in the U.S.

[Guest CaseyC]

according my accountant, sales tax is required for any purchase shipped to anywhere in the U.S.. As plain as that.

BUT

it is common practice among most all interstate merchants, and has been for years and years, to only charge sales tax to the customers that are having the product DELIVERED to the same state that the merchant is doing business out of.

in this particular example, the merchant is out of New York, so any customers, in the entire world, that order from his site and have it DELIVERED to New York should get charged sales tax. and that is what cubecart currently does, but it only calculates tax based on the state, and the problem is that New York state sales tax can't be covered under just one rate, there are many rates that vary between 7 and 9.5 % bases not just on what county you are, but sometimes what city you are in. So unless cubecart offers a way to store all of those rates, it will always end up calculating the sales tax incorrectly. and this probably goes for ALL states in the U.S.

I'll try again.....if you go into a store in NY or anywhere else, you pay the sales tax rate that is in place for the location of the store. It is the vendor's location that sets the sales tax rate. Same holds true for web purchases. If you're a vendor in NY and you sell to anyone in NY you charge sales tax at the rate that is applicable to your location. Technically, sales tax should be charged for all of your sales, at your rate....but this is not being enforced (although there are politicians that are eying this source of tax revenue and want to pass legislation to make sales tax mandatory on all web purchases.)

Just to expand on the above.....I have a wholesaler in California that drop ships for me. Any sale that I make that goes to a CA address is charged sales tax at the rate prevelant to Irvine, CA not kat the rate at the address of the customer. In addition, anything I sell that is shipped to Texas is not taxed because the vendor is in CA. If I took delivery of the item here in Texas and then shipped it to my customer in Texas I would be required by State Law to collect sales tax.

Klaus Cook

www.gifts.jowestcorp.com

[Guest degsey69]

You are only required to charge the state tax of the area that you live in so if you live in the Metro area and ship to another part of the state you only charge the tax for your area. Its as if that customer has walked into your store at home (or registered busines address) The only time you have to be aware of other county/city taxes is if you are a contractor who is working on the property and have sold materials subject to sales tax to that customer, you then have to apply it and account for it on your sales tax return.

In out of state sales the norm is that you do not apply sales tax as its being shipped out of state with documentary evidence that exempts you from collecting it. It is the customers moral duty to declare the out of state purchase and render the tax due to the state of residence. Some states are now tracking large out of state purchases and asking the customer resident in their state for the tax.

So I would just charge my local county/state tax to customers in my state and exempt out od state customers from tax. :w00t:

[Guest Hertreaudo]

Hi Klaus,

Thanks for the reply. Sounds like California made their sales tax merchant friendly. In New York the State specifically notes that sales tax must be collected according to the tax code of the point of delivery = the shipping address of the customer, not the merchant(me)...

Brilliant bureaucracy this.

[Guest CaseyC]

Hi Klaus,

Thanks for the reply. Sounds like California made their sales tax merchant friendly. In New York the State specifically notes that sales tax must be collected according to the tax code of the point of delivery = the shipping address of the customer, not the merchant(me)...

Brilliant bureaucracy this.

I would recheck my source on that if I were you. If what you are saying is true (and I don't doubt your veracity) and you collect the sales tax rate based on customer address how do you pay the sales tax to the taxing authority?????? In other words, the state sets a base sales tax rate. Added to this is the county and local tax rate. If you pay the collected amount to the State Controller (who is the normal payee) how do they know which county and city the extra collected tax money should be distributed to? Does that mean you have to submit a detailed report as to where your sales occurred?

[citabriabob]

Casey:

NY State sends you a multi-page form that includes all the various local tax locations (mostly Counties), then you are expected to fill in the gross sales and calculated tax for each, then sum up each page, then sum up all pages at the end, then fill in more stupid lines of useless information for the Bureaucrat...

This state is losing huge numbers of businesses due to this and many other friendly gestures to those who collect, pay and put up with these absurdities at virtually their own expense (there is a very small allowance based on the State portion of the tax only, which amounts to pennies.)

Due to the fact that my customers are 99% out of state, I only have to file annually. If it had to be done monthly, I would move to a less-fascist state.

[Guest Hertreaudo]

Citabriabob,

Imagine how much friendlier the state will become when peak oil sets in LOL.

Till then I'll be filling out that same form with you as 95% of my business is out of the U.S.

What I don't understand is how you only have to file annually. The State's website says that even if you have 0 sales within a sales tax quarter and you have a regular certificate of authority, every quarter must be filed or face a $50 fine.

If you have a link for this annual exemption filing it would be most appreciated.

regards,

Tenyu

[citabriabob]

Dear Tenyu:

Used to be able to apply for annual filing on initial certificate request. Now, they want you to file quarterly for the first year, then THEY will let you know about annual filing thereafter.

For those of you outside the People's Republik (sp.) of New York, last year there were rate changes in several counties, increasing the form to eight (8) pages; a separate line was included for each tax rate for each locality! Then, they wanted you to calculate the allowance the same way - told them to keep their damned allowance, as I figured about another 2 hours of work to keep ~75 cents.

Enough ranting. I also don't know how I'm going to implement Sales Tax. My current system is Perl-based order form, where I ask customers to state their County if in NY, with a note that the proper tax will be added. This may turn out to be the best choice, since I enter Credit Card transactions manually and use accounting software to calculate taxes. Of course, this won't work with a gateway...