-
Question: Does Rings & Things charge sales tax?
-
Answer: We charge sales tax on Washington state purchases, unless you are buying for resale. Washington state requires us to have a signed resale certificate on file in order to not charge sales tax to Washington residents. Once you have your resale number from Washington State (more info below), you can print Rings & Things' resale certificate form and fax it (509-838-2602) or mail it to us (Rings & Things, PO Box 450, Spokane, WA, 99210-0450, USA). Until we receive this completed form, we'll have to charge you sales tax if you live in Washington state.
When you place your first order we can ship it without the form, but we will charge the sales tax based on your location. You can take the tax as a credit on your Washington sales tax return as "tax paid at source." Or, we can hold your order until you send in the signed form.
At this time, this only applies to orders shipped to Washington state locations. The Streamlined Sales Tax project will ultimately require us to charge destination-based sales tax on all orders unless we have the correct resale tax exemption certificate on file for each customer buying for resale.
-
Question: I'm starting a home business where I will be designing jewelry and selling it. Do I need a tax number to order from Rings & Things?
-
Answer: You do not need a tax number (resale tax identification) to order from us. BUT, a resale tax ID is a good investment for fledgling businesses and is usually a minimal expense. The exact amount varies from state to state.
-
Question: What are the advantages of getting a tax ID number for my fledgling business?
-
Answer: A resale ID legitimizes your business in the eyes of potential suppliers and fellow craftspeople:
- It enables you to purchase from a larger number of wholesale suppliers.
- It helps you get into wholesale bead and craft-supply trade shows.
- It makes some craftspeople more friendly about sharing information.
- It expands where you can sell your wares (some craft shows won't let you exhibit without one).
-
Question: What are the drawbacks of getting a tax ID number?
-
Answer: The three main drawbacks are that:
- It costs money (usually around $50).
- You have to fill out some paperwork.
- It lets your state's revenue department, and Uncle Sam, know you plan to sell things. That means you'll need to report your earnings so you can pay income tax on them, and/or collect and pay sales tax.
-
Question: So, how does a tax number work?
-
Answer: Each state has its own specific rules and regulations regarding sales tax. But, generally speaking, if you sell your artistic creations in a state that charges sales tax, you are required to collect sales tax when you sell your product. Some states exempt a small amount of sales as long as you pay sales tax when you buy the components.
If you use the things you buy wholesale without reselling them (for example tools), most states require you to pay "use tax" to your home state. Many individuals ignore this, but most businesses ultimately get audited and are required to pay "use tax" on out-of-state purchases.
More information about resale tax in Washington state. For those of you elsewhere in the United States, check out Jewelry Making HQ's State by State Business Start Up Guide and/or the Federation of Tax Administrators for information about your state.
-
Question: How do I obtain a state resale tax number?
-
Answer: If you live in Washington state, contact the Washington State Department of Revenue. For those of you who live elsewhere in the USA, check out Jewelry Making HQ's State by State Business Start Up Guide and/or the Federation of Tax Administrators for information about your state.
|
