Sales Tax Question

[debbry531]

I searched around and couldn't find anything, and this may be a stupid question, but...

I gave a few photo-related gifts for Christmas presents. I'm planning on paying the sales tax on those. I also assume I should pay it on the Christmas cards I ordered for myself.

What about studio samples though? In my ordering frenzy over the holidays, I ordered a few new ones... All my previous ones were ordered pre-tax ID so I paid the sales tax and didn't think anything of it.

[pbyd]

Debbie, to keep from starting another tax issue, you should contact your CPA, they can give you the correct answer.
Wayne
Photography by Design

[JohnT]

You could also call the State Comptroller's office. They are always ready and willing to help with any tax questions.

http://www.window.state.tx.us/

[StevenGWebb]

The simple solution is are you re-selling the items? The sample items that are for your studio use are not exempt from state sales tax as you did not purchase them to re-sell.

Your CPA is the best source of advice regardig your limited use sales tax questions.

Steve

[Wil_Bloodworth]

Originally Posted by debbry531

I searched around and couldn't find anything, and this may be a stupid question, but...

I gave a few photo-related gifts for Christmas presents. I'm planning on paying the sales tax on those. I also assume I should pay it on the Christmas cards I ordered for myself.

What about studio samples though? In my ordering frenzy over the holidays, I ordered a few new ones... All my previous ones were ordered pre-tax ID so I paid the sales tax and didn't think anything of it.

Here's the rule, "You do not pay any sales tax on any *thing* used to make a product." That means that anything you purchase that is used to make an image is not subject to sales tax. Everything else, unfortunately, is the opposite.

- Wil

[debbry531]

That's what I figured - thanks!

[Howard Barlow]

However, if you convert any item for personal use, including gifts, sales tax is due. If you gave it as business advertising, or customer gift, no, personal gift, yes.

[CaptainTom]

Everything I give is for business, everything I buy is for business, either an expense or to produce a product, every mile I drive is for business, it's up to the IRS to prove otherwise.

[Howard Barlow]

Actually, if I am not mistaken, and so far I never have been, ask my wife, if the IRS makes a charge, you have to disprove it. Any CPAs want to weigh in on this? Not you fat ones, the scales are lightweight, like Tom and me.

[ronocnikral]

^this is what I try to tell my wife. why go through the headache? i would rather be right next to the line, opposed to on it or over it. I'll take what i can and pay the rest. and save a headache down the rd. of course, the size of your company will dictate the differences. e.g., my "real" employer houses multiple IRS people all year. But, when you are one of the biggest companies in the world, you can afford that and walk the line.

of course, a cpa helps.

[BWangPhoto]

Originally Posted by Howard Barlow

...if the IRS makes a charge, you have to disprove it....

You are so right. I have been audited by the IRS and they already have an estimated tax burden when they contact you, estimated income and amount you owe! They simply tell you bring the documentation to prove that we are wrong. It is very much guilty until proven innocent with the IRS.

[Steelsun]

Originally Posted by BWangPhoto

You are so right. I have been audited by the IRS and they already have an estimated tax burden when they contact you, estimated income and amount you owe! They simply tell you bring the documentation to prove that we are wrong. It is very much guilty until proven innocent with the IRS.

Second this - been through several IRS business audits at various companies I worked with, and they were worse than the capital murder / death row investigations I've done. {Shudder}
IRS is guilty until proven otherwise.