Sales tax out of state.

[ellisito]

What is the name of your state (only U.S. law)? NJ
I started an IT Consulting business and when I make recommendations to my clients on hardware I always have them purchase the items online and have it shipped to their place of business. Twice I have been persuaded into purchasing goods for them and then being asked to bill them for reimbursement. Since my client is in NY, if I buy something physically in NJ and ship it to them in NY do I need to charge them sales tax and enroll my company for sales tax with the state? I do not have a business presence in NY. Also I have no plans to sell merchandise. I am service provider only.

 

[FlyingRon]

What is the name of your state (only U.S. law)? NJ
I started an IT Consulting business and when I make recommendations to my clients on hardware I always have them purchase the items online and have it shipped to their place of business. Twice I have been persuaded into purchasing goods for them and then being asked to bill them for reimbursement. Since my client is in NY, if I buy something physically in NJ and ship it to them in NY do I need to charge them sales tax and enroll my company for sales tax with the state? I do not have a business presence in NY. Also I have no plans to sell merchandise. I am service provider only.

Since you visit them at their NY office, I believe you likely have nexus there and must pay tax. That is described here: https://www.tax.ny.gov/pubs_and_bulls/tg_bulletins/st/do_i_need_to_register_for_sales_tax.htm

However, certain equipment for telecom/internet access is exempted trom the tax. The exemption is covered here: https://www.tax.ny.gov/pdf/memos/sales/m00_6s.pdf

 

[ellisito]

Since you visit them at their NY office, I believe you likely have nexus there and must pay tax. That is described here: https://www.tax.ny.gov/pubs_and_bulls/tg_bulletins/st/do_i_need_to_register_for_sales_tax.htm

However, certain equipment for telecom/internet access is exempted trom the tax. The exemption is covered here: https://www.tax.ny.gov/pdf/memos/sales/m00_6s.pdf

Thank you for the response. I only see them about once every 2 months just to see how things are. Most of my work is remote. One scenario is I buy items on Amazon and ship it to them so that takes care of any sales tax. The other scenario is if I ship something (which I already paid nj sales tax) from my NJ home office to them...doesn't the rule of them having pay Use Tax apply? All my sales requests come in via email. I'm not at their NY offices selling.

 

[coolmaltese]

I don't know if this applies to all states (I am In Florida), but this is something to consider:

If you are ever audited by your state's revenue/sales tax department, they will go over all your records including invoices, receipts, statements, AR, AP, ledgers, and other accounting records. If you show any product orders on the books from companies (both in-state and out-of-state) they will look to see if they were for resale or for use in the business. If an order was for resale they will want to see sales tax charged (and remitted to the state that tax period) when you resold it (it will be up to you to prove with documentation that it is exempt if no sales tax was charged). If the product order was for use within the business, they will want to see that you paid sales tax (if you buy a product, say an office supply item, from out-of-state and did not pay sales tax on it, you will be billed by the state for sales tax and interest, and possibly a penalty).

 

[ellisito]

I don't know if this applies to all states (I am In Florida), but this is something to consider:

If you are ever audited by your state's revenue/sales tax department, they will go over all your records including invoices, receipts, statements, AR, AP, ledgers, and other accounting records. If you show any product orders on the books from companies (both in-state and out-of-state) they will look to see if they were for resale or for use in the business. If an order was for resale they will want to see sales tax charged (and remitted to the state that tax period) when you resold it (it will be up to you to prove with documentation that it is exempt if no sales tax was charged). If the product order was for use within the business, they will want to see that you paid sales tax (if you buy a product, say an office supply item, from out-of-state and did not pay sales tax on it, you will be billed by the state for sales tax and interest, and possibly a penalty).

So if I buy a printer from Amazon and have Amazon ship the item to them, then I bill them back for the item so I can get my money back I need to charge tax again? I don't want to engage in selling merchandise for profit. I rely on only being a service based business.