Sales tax? Do I need to charge it?

What is the name of your state? Florida

My name is David Kochman. I am the President and owner of a company called The Hanger Guys, Inc. We are located in Florida. The company imports boxes of hangers from China and sells by the box, or by the entire container, to the following of clients:

1) By the box to local dry cleaners in the South Florida area.
2) By the container to large dry cleaning chains located throughout the US.
3) By the container to distributors of dry cleaning supplies throughout the US.
4) By the container to distributors in other countries throughout the world.

I know that I must charge sales tax to the first client. My question is do I need to charge sales tax to any of the other three, and if so how much?

I appreciate your time given to answering my questions.

Thank you,

David Kochman

[olgethorpe]

Sales tax is one of those areas where the "special interest groups" stick their nose in all the time. We had similar questions here in Ohio and finally called the state and asked. Their response was "let us come out and audit each type of sale and we'll give you a ruling".

So...my advice...call the state Sales Tax authority and ask them. Whatever they tell you, get it in writing. This doesn't mean that someone here wouldn't be able to give you the right answer...it just means when you're dealing with government agencies you're safest if you go right to the source.

You get it in writing so that should you ever be challenged for doing it "wrong" you will at least have a document that shows why you were doing it that way. If you are found to have done it wrong, you will only owe the tax and not be penalized for being wrong.

[abezon]

The general rule is: You need to remit sales tax for any sale in FL or shipped to a FL address. If you ship to another state or out of the US, FL cannot tax the sale. Should you establish a second distribution center in another state, you'll have to collect taxes for sales in/shipped to that state.

You may need to collect different local sales taxes depending on where in FL you ship an order. Check with the FL Dept of revenue.

Call the FL dept of revenue and double check that the dept agrees with this assessment. Be sure to keep *meticulous* records of out of state sales so you can prove where everything was shipped. The burden of proof is on you!

You should also keep records anytime your business purchases something from outside of FL for it's own use. In that case, you'll owe "use tax" equal to the sales taxes you'd have paid if you bought in your home town. You get a credit for any taxes you can prove you paid another state. (Foreign taxes don't generate a credit.)