Accounting & Taxes | Chamber of Commerce

U.S. Sales Tax Guide

Chamber of Commerce Team — Thu, 07 Apr 2022 21:53:16 +0000

When a consumer or business buys almost anything, it has a sales tax on it. Every state has its own tax rate. Additionally, each county in each state can also add a percentage on top of the state’s sales tax. If you are a business buying something for resale or an ingredient or materials to make something for resale, you do not have to pay sales and use tax on most items, but you must have a tax certificate from the state.

The government imposes a consumption tax on goods and services. The sales tax is not included in the price of the item or service but added to at the point of sale. The taxpayer/retailer collects the tax and forwards it to the state’s department of revenue. Every business must collect the tax amount in its jurisdiction, pursuant to the laws of the business’s jurisdiction.

When running a business, the owner must know when to collect sales and use taxes and how much to collect on each sale.

Find out more about sales tax in your state

Types of taxes

A business that provides goods and services should know the terms associated with its sales tax liability.

Use tax

A use tax is a sales tax that a customer purchasing goods from a state other than his or her home state pays. The tax amount is the percentage that the person pays in his home state. For example, if a consumer lives in Tennessee and purchases something from California, he pays Tennessee tax on the product he purchases. However, if the purchase is not taxed in his home state, he does not pay taxes and does not include the purchase in his use return.

The retailer collects the use tax and files a use tax return. Use tax rates might be different from your state’s tax rates. Tax filers should always check on the various use tax rates when conducting business with out-of-state customers.

Taxable goods

Every state has laws that determine taxable goods. In many jurisdictions, many grocery items are not taxable. Some jurisdictions even have different tax rates for different items. For example, a grocery store might tax groceries at one rate and cleaning products at another rate.

Taxable services

In many jurisdictions, businesses do not have to collect tax for certain services. If the service is combined with items, the items are still taxable. For example, depending on its location, an auto repair shop might not charge tax on labor but must charge tax on parts.

Income tax

The first income tax was levied in 1894 and was known as the Wilson-Gorman Tariff. However, Charles Pollock sued, stating the tax was unconstitutional. The Supreme Court found in favor of Pollock (Pollock v. Farmers’ Loan and Trust Company, 157 US 429 (1895) because the Tariff was a direct tax on property owners and not apportioned among the states, which is unconstitutional.

In 1913, the U.S. Constitution was ratified to include that Congress could levy taxes on any income “without apportionment among the several states, and without regard to any census or enumeration.” The Sixteenth Amendment then passed, which overturned the ruling in Pollock and reinstated the federal income tax.

Since then, changes have been made, and now we pay income tax under Title 26 of the United States Code (26 U.S.C.). Everyone is subject to income tax, including businesses. The amount of income tax you pay is based on the amount of income you have.

Local sales tax

A local sales tax is an extra percentage a city or county implements. It is added to the state sales tax. Thus, if the state’s tax is 7 percent, and the county you live in levies a 2-percent tax, your total tax is 9 percent. All retailers in the county must collect 9 percent on every taxable sale.

State sales tax

The state levies a sales tax on goods and services. Retailers in all jurisdictions must collect this tax at a minimum. Depending on state and local laws, counties and cities can also add sales tax to the state tax. The local taxes are paid to the local jurisdiction, and the retailer pays the state tax to the state.

Self-employment taxes

On top of income taxes, businesses must also pay self-employment taxes to cover Social Security and Medicare. In most cases, those who work for themselves pay self-employment tax as it is not collected elsewhere. If a business makes more than $400 from self-employment income or more than $108.28 in wages from a church, it must pay self-employment taxes. Ministers and members of religious orders are exempt from the self-employment tax.

Social Security and Medicare taxes

Additionally, a business must pay Social Security and Medicare taxes, federal income withholding tax, and federal unemployment tax if you have employees. Most of these taxes are deducted from the employee’s paycheck, though the employer pays a percentage of the Social Security and Medicare taxes.

Excise tax

Those who operate certain kinds of businesses must also pay an excise tax, including those who:

Manufacture or sell certain products,
Use certain types of equipment,
Offer certain services, and
Use various products or facilities.

The excise tax has many categories of taxes, including:

Environmental, fuel, air transportation, communications, and the first retail sale of tractors, heavy trucks, and trailers.
Certain trucks, buses, and truck tractors with a taxable gross weight of 55,000 pounds or more if those items are used on public highways.
Gambling and lottery activities.
Motor fuel.

Jurisdictions

Sales tax is governed by several jurisdictions, including state, county, and city. In some aspects, federal laws also govern the tax, such as when a company sells goods and services to the federal government.

Business tax

Sales tax is not the only tax a business pays – it has federal income taxes it must also pay. All businesses except partnerships must file an annual income tax return. Partnerships must file an information return. Everyone, including businesses, must file income tax as it is earned. In most cases, individuals and businesses must estimate the income taxes due and pay them quarterly. Those who do not pay quarterly taxes pay a penalty for “late taxes” when filing income taxes.

Businesses also pay state and local taxes. These taxes depend on the jurisdiction and the type of industry. For example, someone handling oil, gas, or hazardous chemicals pay a local tax on the disposal of these types of items.

Types of taxes businesses might pay include:

Income tax.
Self-employment tax.
Excise taxes.
Property tax on business property (real estate).
Payroll taxes.
State income taxes, where applicable.
Gross receipts taxes, where applicable.
Dividend taxes on corporate shareholders.
Sales and use taxes.
Agricultural land taxes.
Amusement tax (for amusement parks).
Securities transaction taxes.
Tobacco and alcohol taxes.
Stamp taxes.
Vehicle license tax.
Land value tax.

Not all jurisdictions require all of these taxes, and not all types of industries require all of these taxes. Check with a local attorney to determine which taxes a particular business needs to pay before starting a business.

Sales tax exemptions

Every state has exemptions for sales tax. Common exemptions include medicine and food. If a jurisdiction does not have a complete exemption, it taxes the items at lower rates. Additionally, depending on the state or local jurisdiction, some sales transactions are exempt from the tax. The jurisdiction bases these exemptions on the type of property, the purchaser’s identity, and what the property will be used for.

Type of property sold

Most states exempt certain commodities that people need to survive, such as food, medical devices, and medications. Some states exempt clothing, while others charge a lower or full sales tax rate. Some states also have a partial tax on certain food items, such as grocery ingredients like flour or meat, while boxed dinners, candy, and soda are fully taxed.

Depending on the industry you are in, you might sell one or more of these items and could have more than one tax rate, depending on your business’s jurisdiction.

Type of purchaser

While most sales tax is based on state law, federal law has its fingers in the pot. A state cannot impose a tax on property sold to the federal government and some of its agencies. In some states, a city, county, or other local jurisdiction cannot impose a sales tax on goods and services sold to the state.

For example, a business that makes non-stick bandages might sell to the U.S. government for use by VA hospitals and on-base hospitals, and doctor’s offices. These items would be non-taxable, but the same items sold to a private medical establishment would be taxable.

Type of use

Certain industries, such as industrial processing, agriculture, and manufacturing, are exempt from paying sales tax. A state with a heavy farm presence might not charge farmers a tax on goods needed to produce the farmed products, including machinery and other equipment used for harvesting or otherwise used on the farm.

Additionally, most states allow products that are used for resale to fall under tax exemption laws. Because the state assesses the taxes on the retail sale, it would double tax an item if the retailer bought it to make something for resale.

For example, a small business makes hats for resale. That business would be able to purchase the products used to make the hats without paying sales tax. However, that business must pay the tax when it sells its hats.

Proving the right to exemption

The purchaser of a service or product must prove that his or her purchase is exempt from sales tax. The state issues tax certificates to those exempt from paying the tax. Some states also issue a certificate that shows that a business pays sales tax directly to the state rather than through individual purchases at retailers. The certificate allows those purchasing items for resale to buy those items tax-free. They must, however, charge tax when they resell the items.

Tax credits

A business can apply for a sales tax credit if:

It overpaid sales tax.
It paid tax on certain transactions by mistake.
It collected sales tax from customers but returned the tax to the customer.

The credit reduces the next tax payment you make.

What is a tax nexus?

First, a nexus is a relationship between at least two entities. Since we are talking about sales taxes, the nexus is the relationship / presence between your business and the state, county and / or city that collects the tax. These jurisdictions cannot tax you without that relationship. The nexus is the presence you have in a certain jurisdiction.

The U.S. Constitution creates the tax nexus in the due process clause, which requires a connection, and the commerce clause, which “requires a substantial presence.” A nexus also describes the degree of the business present in a state.

Generally, having a tax nexus means that a business maintains an office, employs workers, and / or stores products and supplies in a warehouse in the state.

For federal tax purposes, you have a nexus if:

The business’s income comes from sources in a state,
The business leases or owns property in the state,
The business has capital assets in the state, and / or
The business has employees engaged in activities that are more than “mere solicitation” in the state.

For sales tax nexus, the rules aren’t as stringent. A business must have a physical location, have employees that are residents of the state working for it, own property – real or intangible – in the state, or have employees who solicit business (salespeople) in the state.

Adding online transactions has made “nexus” more complicated. Because the “old” way required a business to have a physical presence, people buying goods online often got away without paying sales tax. The states were losing a lot of revenue because online businesses did not meet the physical presence requirement to have a tax nexus within a state.

In June 2018, the Supreme Court ruled that states had a right to collect sales taxes from online sellers in S. Dakota v. Wayfair. A business no longer needs a physical presence in the state if it sells products online.

The states that have sales taxes set up procedures to allow businesses to collect the taxes from online sales. Some states have a minimum number of transactions or amounts per year that bar collecting sales tax.

In other words, if an online business generates less than a certain amount or number of transactions per year, it does not have to pay tax on those transactions.

Online sales nexuses

To determine whether a business has an online sales nexus, it will need to review the rules for its state. Common ways the states determine whether businesses should charge sales tax for online sales include:

Considering a click-through as a direct connection between the seller and buyer, such as through a referral link.
Through affiliate programs, such as Amazon’s affiliate program.
You sell over a certain amount or have a certain number of transactions. For example, Idaho has a minimum sales nexus of $100,000 per year.

Sales tax rates

Every state has its own sales tax rate. Additionally, counties and cities could add a small percentage to the state’s tax rate. A business should familiarize itself with all local and state sales tax laws, including the differing tax for certain products. State and local sales tax might fluctuate frequently, so check constantly to ensure that the business charges enough tax to cover the tax due on its tax forms.

Calculating sales tax

When calculating sales tax revenue, a business might have different taxes for different items. For example, some states charge one percentage for clothing and material goods and another rate for groceries. Always review the tax rates for your state, county, and city.

Sales made in the store might have a different tax rate than online sales. In-state sales might have a different rate than out-of-state sales. Make sure you know the rules for all retail sales of goods and services.

How to collect sales tax

Set up point of sale software to add the requisite sales tax to each item scanned. This way, you and your employees won’t have to remember which items have different tax percentages.

If a business does not have a point of sale and calculates everything by hand, it will have to know the appropriate amount, figure the percentage and add it to the sales price. Some states do not allow you to incorporate the sales tax in the price of the service or product, so be careful of selling items or services “all-inclusive” and figuring out the tax later.

Filing sales tax returns

State laws tell a business how often it must file sales tax returns. Many states require that you file them monthly.

Tax return due dates

Check your state’s laws for tax return due dates. Some states require them to be postmarked by the due date, and some want the returns processed by the due dates. If your state allows electronic filing, that is the best way as you can send payment electronically, and it is marked as received as soon as the state receives the return.

FAQs

Should I collect sales tax?

Yes. Check with your state laws to find out if you sell any product or service that is exempt. Otherwise, almost everything is taxable.

How often should I file my sales tax?

File your sales tax when your state tells you it is due. Many states require that you file sales taxes every month.

Should I charge sales tax on everything?

No. Some states allow exemptions for certain items. Be sure to check your state’s laws for items and services that are exempt from sales tax.

How do I know my tax obligation?

You must complete and file a sales tax return that includes all taxable sales.

Are the products or services you deal in taxable in your state?

Most products and services are taxable, though retail sales tax depends on state and local laws. However, if a business purchases goods for resale, it must have an exemption certificate to not pay double sales tax. Paying taxes on an item when a business purchases it, then paying taxes on it again when it sells the item or a product created with the item is double taxation.

How do I calculate taxes for my business?

Add up the sales tax you collected from your customers. This is the amount of tax the business owes. If the business did not charge tax on a taxable item, it must also include the tax on that item, even though it did not collect it from the customer.

How much sales tax should I charge?

You must charge sales tax as dictated by state and local laws.

How much do small business owners pay in taxes?

It depends on the type of business they have. Some businesses are required to pay additional taxes because of products they work with or services they provide.

Is it a requirement to obtain a seller's permit or license?

If a state, county, or city requires it, a business must obtain a seller’s permit or license. Sometimes, the business might have to pay for a state license, a county license, and a city license.

The post U.S. Sales Tax Guide first appeared on Chamber of Commerce.

Virginia Sales Tax Guide

Chamber of Commerce Team — Thu, 07 Apr 2022 18:42:51 +0000

Virginia does not have one rate for the entire state. Most of Virginia’s sales tax is 5.3 percent. However, some areas have different sales tax rates. The state also has several special and excise taxes. Virginia also uses e-Forms to file taxes. You do not have to register for an account. The state requires that you remit payment electronically – it does not accept paper checks.

This guide does not fully describe all of Virginia’s laws and regulations regarding taxes. Businesses should contact a business attorney or visit the Virginia Department of Revenue website to learn more about the rules, regulations, tax laws, and tax information associated with their industries and the types of taxes due.

Types of taxes

In addition to Virginia’s sales and use tax, the state has several other taxes, including a motor vehicle rental tax, peer-to-peer vehicle rental tax, and a food tax.

Sales and use tax

Virginia’s sales tax structure is a bit different from most other states. Most of state has a 5.3-percent sales and use tax rate. However, the following jurisdictions have their own tax rates:

7 Percent

James City County.
Williamsburg.
York County.

6.3 Percent

Charlotte County.
Gloucester County.
Halifax County.
Henry County.
Northampton County.
Patrick County.

6 Percent

Alexandria.
Arlington.
Charles City.
Chesapeake.
Chesterfield.
Fairfax City.
Fairfax County.
Falls Church.
Franklin.
Goochland.
Hampton.
Hanover.
Henrico.
Isle of Wight.
Loudoun.
Manassas.
Manassas Park.
New Kent.
Newport News.
Norfolk.
Poquoson.
Portsmouth.
Powhatan.
Prince William.
Richmond City.
Southhampton.
Suffolk.
Virginia Beach.

Alcoholic beverage taxes, non-food, and beverage items

In most regions in Virginia, retailers must add the 5.3-percent sales tax to wines and distilled spirits. Additionally, distilled spirits have a 20 percent state tax built into the retail price, and wine has a 4-percent state tax plus a $0.40 per liter wine tax built into the retail pricing.

Furthermore, the state levies a 2.5-percent sales tax on non-alcoholic beverage items. The retailer must add this tax at the register. A 5.3-percent sales tax is levied on non-food and beverage items in regions not mentioned below. This tax is also added at the register.

Instead of the 5.3-percent sales tax, the following regions have their own sales tax that retailers must add for retail sales of alcoholic beverages:

Northern Virginia and Hampton Roads regions: 6 percent on wines and distilled spirits.
Halifax County: 6.3 percent on wines and distilled spirits.
The Historic Triangle: 7 percent on wines and distilled spirits.
Northern Virginia and Hampton Roads regions: 6 percent on non-food and beverage items.

Automobile rental surcharge tax

Motor vehicle rental companies must add Virginia’s motor vehicle rental taxes to any vehicle rented for less than 12 months. The taxes are as follows:

Rental of any vehicle weighing 26,000 pounds or less: 4 percent.
Rental of any vehicle, regardless of weight, except motorcycles and mobile homes: 4 percent.
Rental fee on any vehicle, regardless of weight, except motorcycles and mobile homes: 2 percent.

Businesses renting motor vehicles must collect all three taxes for a total of 10 percent. Exempt charges include:

Pass-through charges.
Violations, citations, fines, penalties, and fees.
Transportaion charges.
Delivery, pickup, drop, and recover charges.
Refueling charges.
Third-party service charges.

Businesses can register to pay motor vehicle rental taxes online or by using tax form R-1, Business Registration Application.

Peer-to-peer rentals, such as Uber or Lyft, file Form P2P tax return. If the platform has more than 10 vehicles registered to the business, the rental rates are the same as the motor vehicle rental rates above. Businesses with 10 or fewer vehicles registered to their platform pay a 7-percent tax.

Businesses must file online or request an electronic filing waiver request.

Soft drink excise tax

A business that has yearly gross receipts of:

$100,000 or less: $50.00
$100,001 through $250,000: $100.00
$250,001 through $500,000: $250.00
$500,001 through $1,000,000: $750.00
$1,000,001 through $3,000,000: $1,500.00
$3,000,001 through $5,000,000: $3,000.00
$5,000,001 through $10,000,000: $4,500.00
$10,000,000 through $25,000,000: $7,200

Food and personal hygiene

Business taxpayers in all areas of Virginia must collect and pay 2.5 percent sales tax on food and personal hygiene items.

Beer and wine cooler taxes

Virginia levies a tax on beer and wine coolers at the per barrel rate. The tax is paid by the bottler, manufacturer, or wholesaler upon the sale to licensed retailers. The taxes are as follows:

$0.2565 per barrel of beer or wine cooler.
$0.02 per bottle on bottles that are 7 or fewer ounces.
$0.0265 on bottles of beer and wine coolers that are more than 7 ounces to 12 ounces.
$0.0222 mills per ounce per bottle on bottles larger than 12 ounces.

The tax does not apply to beer and wine coolers that are shipped out of state for resale in another state or products sold to the United States Government, Department of Veterans Affairs, post exchanges for the United States Armed Forces, and otherwise exempt organizations.

Motor fuel taxes

Most consumers do not see the motor fuels taxes as the taxes are levied when the fuels leave the terminal rack. The state also has a storage tank fee. The following tax rates are per gallon:

Gasoline: 26.2 cents.
Diesel: 27 cents.
Blended fuels – Gasoline: 26.2 cents.
Blended fuels – Diesel: 27 cents.
Aviation fuel: 26.2 cents.
Alternative fuels: 26.2 cents.
Storage Tank Fee: 0.2 cents.

Additionally, a wholesale sales tax of 2.1 percent is levied on fuels sold in Northern Virginia and the Hampton Roads Planning District Commission area.

Telecommunications tax

Virginia levies a communications sales tax and additional taxes for telecommunications services, including:

5 percent communications sales tax.
$0.75 E-911 fee for landlines and Voice Over Internet Protocol phones.
$0.94 postpaid wireless E-911 tax for mobile phones.
$0.63 prepaid wireless E-911 tax for mobile phones.
$1.60 for right-of-way fees for cable TV franchises and landline phones.

Miscellaneous taxes on agriculture

Virginia has several agriculture taxes, including:

Apple excise tax: 2.5 cents per tree run bushel for apples sold in Virginia. The apple farmer is liable for the tax. The tax is levied on producers who market at least 5,000 tree-run bushels per calendar year.
Cattle assessment: $0.50 per head for the sale of all calves or cattle. The assessment does not apply to the sale of dairy cows used for milking, animals that sell less than $100 per head, or cattle weighing 99 or fewer pounds. The business that conducts the sale deducts the assessment from the farmer.
Corn: $0.01 per bushel grown to sell in Virginia. The processor, shipper, dealer, exporter, or country buyer deducts the assessment from the farmer.
Cotton: $0.95 per bale sold in Virginia. The gin company deducts the assessment from the farmer.
Eggs: $0.05 per case of shell eggs (30 dozen) or $0.11 per hundred pounds of liquid eggs. The handler that sells less than 500 cases per year is exempt from the assessment. Handlers selling eggs to other handlers are also exempt.
Forest products: The first manufacturer, except small servers, pays the forest products tax. If there is no handler, the severer pays the tax. Tax rates vary based on the type of lumber.
Peanut excise tax: $0.25 on every 100 pounds grown and sold in Virginia to a processor. The processor pays the tax.
Sheep: $0.50 per head sold in Virginia. The handler deducts the tax from the farmer.
Small grains assessment: One-half of one percent of the price per bushel produced in Virginia. The handler deducts the assessment from the amount paid to the farmer.
Soybeans: One-half of one percent of the net market value of soybeans purchased. The business or person who buys the soybeans first from the farmer collects the tax from the farmer.

Registering for and filing Virginia's taxes

Virginia taxpayers must file and pay sales tax electronically. The filer can choose to use eForms, a business online services account, or web upload.

You do not need a password or an account to use eForms. They are similar to the paper version. The web upload method uses a file you upload. This is more convenient for businesses with several types of taxes or more than one location.

Sales tax and use tax return due dates

Virginia figures your sales tax due date filing frequency. Monthly filers must remit taxes on or before the 20th of the month following the collection month. Quarterly filers must remit taxes on or before the last day of the quarter (March 31, June 30, September 30, and December 31).

State sales tax returns are due even if a business did not have any reportable sales during the collection period.

Virginia sales tax holiday

Virginia had a sales tax holiday in 2021 but has not listed dates for 2022 as of yet. Businesses can check the Virginia Tax website for upcoming dates.

Remote and marketplace sellers

Remote sellers and marketplace facilitators must register to pay Virginia’s sales taxes if their gross receipts are over $100,000 or they had 200 or more individual transactions for the previous year. While small businesses do not have to collect or register to pay taxes, most do as a convenience for the customers.

If a consumer purchases taxable tangible personal property from an out-of-state seller and does not pay taxes, the consumer must pay the use tax on the items.

FAQs

What is the Virginia sales tax for 2022?

Virginia’s sales tax is 5.3 percent in most places. Certain counties and cities have different tax rates.

How do I get a sales tax resale certificate?

Businesses that need an exemption certificate for reselling goods can print the resale certificate. The purchasing agent must give a completed copy to the seller and keep a completed copy for the business’s records.

The post Virginia Sales Tax Guide first appeared on Chamber of Commerce.

Utah Sales Tax Guide

Chamber of Commerce Team — Tue, 05 Apr 2022 01:11:16 +0000

Utah’s sales tax rate is 4.85 percent of retail goods and some services sold. Local jurisdictions also have a sales and use tax rate. Additionally, the state has excise and special taxes for certain industries. Consumers pay either the sales tax or the use tax. If a consumer does not pay sales tax on taxable tangible personal property, the consumer must pay the use tax.

This guide does not fully describe all of Utah’s laws and regulations regarding taxes. Businesses should contact a business attorney or visit the Utah State Tax Commission’s website to learn more about the rules, regulations, tax laws, and tax information associated with their industries and the types of taxes due.

Types of taxes

In addition to Utah’s 4.85-percent sales tax rate, businesses must collect certain excise taxes and local taxes.

Sales and use tax

Businesses must charge the state tax rate on sales of tangible personal property and some services. If a local municipality has an additional tax rate, the business adds the local rate to the state’s rate. Certain industries also have taxes – some may be in lieu of the state sales tax, and some may be in addition to the state and local tax rates.

Alcoholic beverage taxes

Utah does not have a wine and liquor tax. However, retailers must collect sales tax on the sale of liquor, wine, and beer.

Motor vehicle rental surcharge tax

All short-term motor vehicle leases of 30 or fewer days are subject to the motor vehicle rental tax of 2.5 percent. The tax is addition to state and local sales tax, municipal fees, and other taxes. For example, on a rental bill of $100, the business would charge the 4.85-percent sales tax, the local tax, and the 2.5-percent motor vehicle rental tax. If the local tax is 1 percent, the total tax is 8.35 percent.

Utah tourism tax

Temporary lodging is subject to the state sales tax and a transient room tax. If a person rents a room for fewer than 30 consecutive days, that business must collect the tax. Temporary lodging includes:

Hotels and motels
Inns
Tourist homes
Trailer courts
Campgrounds
Bed and breakfast establishments
Similar establishments

The transient room tax is based on the business location in the state and could include:

The statewide tax of 0.32 percent.
County tax of up to 4.25 percent.
City or town tax of up to 1 percent.
City or town tax of up to 0.5 percent for cities and towns that meet certain requirements.
Salt Lake County tax of 0.5 percent.

Admission tax

Utah levies the state sales tax on admissions for entertainment, amusement, exhibition events, recreation, athletic activities, and cultural activities. Common taxable activities include admissions to:

Movies
Theaters
Museums
Operas
Shows
Planetariums
Exhibitions
Carnivals
Concerts
Amusement parks and rides
Menageries
Circuses
Fairs
Contests
Races
Sporting events
Boxing and wrestling matches
Dances
Billiard and pool parlors
Closed-circuit television broadcasts
Bowling lanes
Miniature golf, golf, and driving ranges
Skating rinks
Batting cages
Ski runs, lifts and trails
Tennis courts
Snowmobile trails
Swimming pools
River runs
Water slides
Boat tours
Jeep tours
Horseback rides
Scenic cruises

Motor fuel taxes

Utah has several motor fuel taxes, including:

Aviation fuel – non-federally certified air carriers: $0.090 per gallon.
Aviation fuel – federally certificated air carriers: $0.040 per gallon.
Aviation fuel – federally certificated air carriers at SLC Airport: $0.025 per gallon.
Motor and special fuels: $0.319 per gallon.
Electricity and propane: EXEMPT.
Compressed natural gas, liquid natural gas, and hydrogen: $0.175 per gasoline gallon equivalent or diesel gallon equivalent.

Additionally, the state levies an environmental assurance fee of $0.0065 per gallon.

Food and grocery tax

Prepared food is subject to Utah’s state sales tax rate plus local jurisdiction sales tax. Groceries are taxed at the lower rate of 3 percent, regardless of location.

In addition to the regular sales tax, restaurants must collect a 1-percent tax on all sales of food and beverages. Bars and taverns are also subject to the state sales tax and the 1-percent extra tax.

Local jurisdiction sales taxes

Many of Utah’s localities have additional sales and use taxes, including:

Local sales and use tax.
County option sales tax.
Mass transit tax.
Additional mass transit tax.
Mass transit fixed guideway.
County option transportation.
Highways tax.
County airport, highway, and public transit.
Transportation infrastructure.
Count public transit.
Supplemental state and use tax.
Botanical, zoo, and cultural.
Town option tax.
City or town option tax.
Resort community tax.
Correctional facility.

Impacted communities

Those who live in certain impacted communities are exempt from paying the resort communities tax and the state correctional facility tax. However, they must still pay sales tax. Items that are affected include:

Motor vehicles
Aircraft
Modular homes
Watercraft
Manufactured homes
Mobile homes.

The impacted communities are:

Alta.
Boulder.
Bluff.
Brighton.
Brian Head.
Bryce Canyon.
Escalante.
Dutch John.
Green River.
Garden City.
Kanab.
Independence.
Midway.
Moab.
Military Recreation – Park City.
Panguitch.
Orderville.
Park City.
Park City East.
Springdale.
Salt Lake City.
Virgin.
Tropic.

Utah sales tax holiday

Utah does not have a sales tax holiday.

Remote and marketplace sellers

Remote sellers and marketplace facilitators must pay Utah sales tax for any retail sales into Utah if they:

Have $100,000 or more in gross receipts from the previous year, or
Made 200 or more individual transactions into Utah.

In most cases, businesses that do not meet these criteria register for a Utah sales tax account and collect and remit taxes as a convenience to their customers. Consumers who purchase taxable tangible personal property from businesses that do not collect taxes because they do not meet the financial nexus must pay Utah’s use tax and file a use tax return.

Filing and registering for Utah sales tax

Sales and use tax due dates

Utah’s sales and use tax returns are due based on how much tax you collect:

Business taxpayers owing $1,000 or less per year can file annually. The tax due date is January 31 of the following year. For example, taxes collect in 2022 are due on or before January 31, 2023.
Business filers with a tax liability of $1,001 to $50,000 can file quarterly. Tax payments are due on the month following the end of the quarter. For example, taxes collected from April through June are due on or before July 31.
A business that collects $50,001 to $96,000 in taxes must file monthly. The tax payments are due on or before the last day of the month following the collection month. For example, taxes collected in April are due on or before May 31.
If a business collects over $96,001 or more in a year, it must file monthly with mandatory EFT payments on or before the last day of the month following the month it collected taxes.

A new business estimates the amount of tax liability when it applies for a license. The Utah State Tax Commission will assign the taxpayer business a filing status. The Commission reviews all accounts yearly and notifies a business if its filing status changes.

FAQs

What is the Utah sales tax for 2022?

Utah’s state sales and use tax is 4.85 percent. Local municipalities also have various taxes that businesses must add to the state sales tax. Additionally, certain industries must also pay various taxes.

How do I get a sales tax resale certificate?

Utah has several exemption certificates. Businesses should print out the appropriate resale certificate or exemption certificate. Tax form TC-721 is generally used for the resale of tangible personal property. Businesses should keep a copy of the form they give to sellers.

How do I get a sales and use tax number?

Apply at tap.utah.gov or use the OneStop Business Registration page at osbr.utah.gov.

Does a business need to file sales tax returns even if it did not have sales?

Yes. You must file a zero return if you did not have any sales, or you will receive a billing notice. If the business closed, file form TC-69C, Notice of Change for Tax Account.

Do I need a new tax license if I purchase an existing business?

Yes. Utah does not allow tax licenses to transfer. The seller needs to provide you with a Letter of Good standing from the Utah State Tax Commission showing that the business does not owe special fuel taxes or sales tax. If the seller owes taxes, withhold the amount of unpaid tax from the purchase price, then pay that amount to the Utah State Tax Commission.

What steps do I take if I am closing a business?

File the last tax return within 30 days of the sale of the business. A business has 15 days to file the final special fuel tax return.
Close any open tax accounts.
Forward the purchaser (if any) with a Letter of Good Standing from the Utah State Tax Commission. The letter shows whether you have outstanding taxes.

The post Utah Sales Tax Guide first appeared on Chamber of Commerce.

Vermont Sales Tax Guide

Chamber of Commerce Team — Tue, 05 Apr 2022 01:10:54 +0000

Vermont’s sales and use tax is 6 percent on retail sales of taxable tangible personal property and some services. The use tax is the same as the sales tax. The consumer pays one or the other taxes. Vermont also has some taxes in local jurisdictions and some specialty taxes.

This guide does not fully describe all of Vermont’s laws and regulations regarding taxes. Businesses should contact a business attorney or visit the Vermont Agency of Administration Department of Taxes website to learn more about the rules, regulations, tax laws, and tax information associated with their industries and the types of taxes due.

Types of taxes

Vermont has several excise taxes and local taxes in addition to the sales and use taxes.

Sales and use tax for sales of goods

In addition to the sales tax rate of 6 percent, consumers must pay a 6-percent use tax if they purchase taxable tangible personal property without paying the sales tax. For example, if a business purchases a pallet of a product for resale and uses a case of the product, it must pay use tax on the case it used.

Alcoholic beverage taxes

Retailers of alcoholic beverages must obtain a tax account and a liquor license. The business must post the license where customers can see it. Retailers can obtain licenses from the Vermont Department of Liquor Control.

If a restaurant sells alcohol for takeout, it must charge a tax of 10 percent on the alcohol. “Restaurant” includes:

Cafes
Dining rooms
Cafeterias
Lunch counters
Diners
Clubs, private and social
Salad bars
Taverns
Bars
Street vendors
Theater concessions
Street carts
Catering businesses
Food carts

The 10-percent tax also applies to alcohol served for immediate consumption. If the alcohol is being delivered, the delivery fee is part of the meal price and is also taxable. If a receipt is not itemized, delivery charges are taxed at the highest rate of the alcohol tax instead of the meal tax.

Grocery and convenience stores must collect an alcohol tax of 6 percent when selling alcohol, whether for pickup or delivery. The tax applies to alcohol that is suitable for human consumption and contains one-half of 1 percent or more of alcohol by volume.

Malt beverages and spirituous liquors are subject to a 10 percent alcoholic beverage tax.

Wholesale beer, wine, and liquor tax

Vermont also has a tax on beer and wine sold by wholesale dealers to retailers. If a manufacturer sells beer and wine directly to the public, the manufacturer pays the tax on those products. The beer and wine tax is as follows:

Beer up to 6 percent alcohol by volume: $0.265 per gallon.
Beer over 6 percent alcohol by volume: $0.55 per gallon.
Wine: $0.55 per gallon.

Additionally, wholesalers must pay a tax on spirits and fortified wines as follows:

Sales up to $500,000: 5 percent.
Sales from $500,001 through $749,999: $25,000 plus 10 percent of any amount over $500,000.
Sales from $750,000 and over: 25 percent.

Liquor sales tax

Grocery stores and convenience stores that sell liquor and beer, not for immediate consumption must also charge a 6-percent sales tax. If a municipality has the 1-percent local option tax, the businesses must also add the local option tax to the 6 percent state sales tax.

Cigarette and tobacco tax

Licensed wholesale dealers must pay a tax on tobacco products. The tax varies per type of tobacco product as follows:

Pack of 20 cigarettes: $3.08 per pack.
Pack of 25 cigarettes: $3.85 per pack.
Little cigars: 1,000 sticks weighing 4.5 or fewer pounds: $0.154 each.
Cigars: 1,000 sticks weighing 4.5 pounds or more with a wholesale cost of $2.17 or less: 92 percent of the wholesale price.
1,000 sticks weighing more than 4.5 pounds with a wholesale cost of $2.18 through $9.99 per cigar: $2.00 per cigar.
1,000 sticks weighing 4.5 pounds or more with a wholesale cost of $10.00 or more per cigar: $4.00 per cigar.
Roll your own: $4.74 per ounce.
Snuff sold by the ounce: $2.57 per ounce.
Smokeless tobacco sold by the ounce: $2.57 per ounce.
Smokeless tobacco sold in a package weighing less than 1.2 ounces: $3.08 per package.
Chewing tobacco and pipe tobacco: 92 percent of the wholesale price.
Electronic cigarettes: 92 percent of the wholesale price.

Motor fuel taxes

Retail sellers of coal, natural gas, electricity, propane, heating oil, dyed diesel fuel, and kerosene pay a fuel tax as follows:

Heating oil, kerosene, propane, dyed diesel delivered in Vermont: $0.02 per gallon.
Natural gas and coal: 0.75 percent.
Electricity: 0.5 percent.

Compute the tax on the retail price of coal, natural gas, and electricity.

Local sales tax

Local jurisdictions that have the 1-percent local tax must collect the taxes and remit them to the Vermont Department of Taxes. The local options taxes are levied on rooms, alcoholic beverages, meals, and sales tax. Use tax is not part of the local option tax.

Currently, Burlington, Rutland, and St. Albans collect their own local option taxes. Instead of remitting them to the Vermont Department of Taxes, contact the business location city to pay the tax and remit tax returns.

Burlington: (802) 865-7000
Rutland: (802) 773-1800
St. Albans: (802) 524-1500

Registering for and filing Vermont's taxes

Businesses should register to submit sales tax returns and use tax returns and remit payments online using myVTax.

While some businesses may be able to remit tax returns and payments by paper filing, businesses must file online if:

A business has multiple locations.
The tax exceeds $100,000.

Computing Vermont’s retail sales tax of 6 percent

When making tax computations, carry the decimal to the third place. Round the tax to a whole cent. If the third decimal is greater than four, round up. If not, round down to the nearest cent. For example, if the tax you owe is $24,443.544, the tax is $24,443.55. If the tax you owe is $24,443.443, the tax is $24,443.44.

Sales tax due dates

If a business filer pays its tax liability quarterly, the due dates are the 25th day of the month following the collection period. For example, taxes collected from January through March – the first quarter – are due on or before April 25.

If a business taxpayer pays its tax liability monthly, the due dates are the 25th day of the month following the collection period. For example, taxes collected in April are due May 25.

Vermont sales tax exemptions

Vermont has several tax exemptions on sales of tangible personal property, including:

Agricultural machinery and equipment used 75 percent of the time or more for the production of horticultural or agricultural commodities for sale.
Forestry and wood products machinery, equipment, and repair parts.
Advanced wood boilers installed as a primary heating system and has a higher heating value of 85 percent or more, contains a fuel feed system for at least a week and has an automated startup and shutdown, and meet the Vermont Department of Environmental Conservation’s efficiency and air emissions standards.
Sales to the federal government.
Sales to the State of Vermont.
Sales to certain nonprofit organizations.
Sales to certain volunteer fire departments, rescue squads, and ambulance companies.

Vermont sales tax holiday

Vermont does not have a sales tax holiday.

Remote and marketplace sellers

Remote sellers and marketplace facilitators must collect Vermont’s sales tax on retail sales into the state if their gross receipts for the previous year were $100,000 or more or if they made 200 or more individual sales into Vermont.

While those business taxpayers who do not meet those thresholds do not have to pay the tax, most do as a convenience to their customers. If the business does not collect and remit the tax, the consumer must file a use tax return.

FAQs

What is the Vermont sales tax for 2022?

Vermont’s sales and use tax rate is 6 percent. Several local jurisdictions have a 1 percent tax added to the state sales tax.

How do I get a sales tax resale certificate?

The purchaser can download a copy of the appropriate exemption certificate. The seller must keep the certificate on file for at least three years. The purchaser should also keep a copy of the resale certificate or exemption certificate on file.

How often does a business have to file a sales tax return?

If the business had a tax liability of at least $1,000 for the previous year, it must file monthly. If the tax liability is $500 or less per year, the business can file quarterly. The Vermont Department of Taxes assigns each business’s filing frequency at the time a business registers for an account.

Does Vermont use the streamlined tax program?

Yes. Vermont is a member of the streamlined sales tax project.

Are delivery and freight charges taxable?

If the item being delivered is taxable, then the delivery and freight charges are taxable.

Is ice taxable?

Yes. Ice, including pre-packaged ice and ice purchased to keep beverages cold is taxable.

The post Vermont Sales Tax Guide first appeared on Chamber of Commerce.

Washington Sales Tax Guide

Chamber of Commerce Team — Tue, 05 Apr 2022 01:10:04 +0000

Washington’s sales and use tax rate is 6.5 percent. Local jurisdictions also have tax rates that businesses must add to the state sales tax rate. Additionally, Washington has some special taxes, such as lodging and vehicle rental. Some are at the state level and others at the local municipality level.

This guide does not fully describe all of Tennessee’s laws and regulations regarding taxes. Businesses should contact a business attorney or visit the Washington Department of Revenue website to learn more about the rules, regulations, tax laws and tax information associated with their industries and the types of taxes due.

Types of taxes

Businesses must collect sales tax on sales of tangible personal property and some services.

Sales and use tax for sales of goods

The sales tax is a tax paid by the consumer. The use tax works in conjunction with the sales tax. A business only pays the use tax if it purchases tangible personal property for retail sales but ends up using or storing the items instead. For example, a business purchases 10 cases of Widget A, but it ends up being a poor seller. Instead of selling the last four cases, the business decides to use Widget A in the business. The business collected sales tax on the first six cases because it sold them. However, it did not pay taxes on the last four, so the business must pay use tax on those cases.

Spirits excise taxes

Washington has two liquor taxes – a sales tax and a spirits liter tax. Consumers pay a sales tax at a rate of 20.5 percent for liquor in its original package. On-premises retailers, such as bars and restaurants, pay 13.7 percent to distributors and distillers, who then collect the tax and pay it to the Washington Department of Revenue.

The spirits liter tax is based on volume. The general public pays $3.7708 per liter. Restaurants and bars pay $2.4408 per liter to distributors and distillers, who collect the tax and pay it to the Washington Department of Revenue.

The collection period runs from the 11th of the month through the 10th of the following month for both types of taxes for liquor purchased from distributors and distillers. Retailers remit taxes in February for taxes collected in January.

Motor vehicle rental surcharge tax

Washington’s automobile rental tax is 5.9 percent in addition to sales tax. Additionally, some counties might ad a 1-percent rental care rate for a total of 6.9 percent plus the state and local sales taxes. Additionally, vehicles rented in the Regional Transit Authority jurisdiction have another tax of 0.8 percent imposed.

For example, if the vehicle is rented in a county with a 1-percent tax, plus is in a Regional Transit Authority jurisdiction and is in a count with the extra rental car rate, the total tax would be 6.5 percent plus 1 percent, plus 0.8 percent, plus 1 percent for a total of 9.3 percent.

The vehicle rental taxes are for vehicles rented for less than 30 days to one person. Washington defines a rental car as one that is designed for carrying 10 or fewer passengers. Vehicles rented or loaned by an automotive repair shop for the consumer’s use while her vehicle is getting repaired are exempt. The federal government is also exempt if the government is paying for the rental. Government employees paying for the rental themselves must pay the tax.

Any charges added to the rental bill without giving the consumer a choice are also taxable. For example, the full tank of gas or insurance is added to every customer’s bill. They are taxable items.

However, if the business gives the consumer a choice of having rental insurance or offering to fill the tank up for a price when the consumer returns the vehicle, those items are not taxable.

Beer tax

Breweries and distributors pay a beer tax for the privilege of manufacturing their products in Washington. The tax is for each 31-gallon barrel or the equivalent if the beer is bottled or canned. Retailers must charge Washington’s sales tax on beer. The beer tax is as follows:

Breweries that produce 60,000 or fewer barrels per year: $4.782 per barrel.
Breweries that produce more than 60,000 barrels per year: $8.08 per barrel.

Washington business tax

Washington has a business and occupancy tax that varies by classification. In general:

Retailers pay $0.00471.
Wholesalers pay $0.00484.
Manufacturers pay $0.00484.
Services and other activities: $0.15.

Certain industries that might or might not fall under the above categories have different taxes. The tax is on gross receipts and is due on the 25th of the month after the collection month. For example, the tax on gross receipts for January is due on or before February 25 if you are a monthly filer.

Quarterly returns are due by the end of the month following the previous quarter. For example, gross receipts collected from January through March are due no later than April 30.

If the business is an annual filer, the tax is due on or before April 15 of the next year. For example, taxes collected in 2022 are due on or before April 31, 2023.

Motor fuel taxes

Washington’s motor fuel taxes have not changed since 2016. The taxes are as follows:

Gasoline: $0.678. Of this, $0.494 goes to the state, and $0.184 goes to the federal government.
Diesel: $0.738. Of this, $0.494 goes to the state, and $0.244 goes to the federal government.

Lodging tax

Washington has a lodging tax, but it is divided into three types:

The transient rental tax is a local tax that businesses report on the sales tax return. The tax is then deducted from the state part of the retail sales tax. It is not a consumer tax. If a lodging business reports this information, it does not pay additional taxes.
Special hotel or motel tax: Certain locations charge this tax to their consumers. The tax is based on the local jurisdiction. Not all jurisdictions charge the tax.
Convention and trade center tax: This is for Kings County only and is levied on businesses regardless of the number of units.
Tourism promotion area charges: This special lodging tax is also municipality-based and is used to fund activities that promote tourism.

In addition to the room charge, several other charges are subject to taxes, including:

Smoking fees.
Pet fees.
Damage and damage waiver fees.
Cleaning fees.
Attrition fees.
Early and late departure fees.

Public utility tax

Washington has five rates for different public utilities:

Water: $0.05029.
Electricity: $0.038734.
Telegraph companies, natural gas, collection of sewage: $0.03852.
Urban transportation, watercraft vessels under 65 feet: $0.00642.
Railroads, motor transportation, other public service businesses: $0.01926.

Registering for and filing Washington's taxes

Businesses must register for and file taxes online. Businesses can file by mail if they have a waiver.

A business has several ways to remit tax payments:

EFT debit.
EFT credit.
E-check.
Credit card.
Check (requires a waiver from the mandatory e-file).
Phone.
Cash (requires a waiver from the mandatory e-file).

Businesses with a tax liability of $20,000 or more and pay in cash should make an appointment with the Washington Department of Revenue. Make sure you schedule the appointment well in advance of the tax due date.

Sales tax due dates

The Washington Department of Revenue will advise you as to whether you pay taxes monthly, quarterly, or annually. If you are a:

Monthly filer: Returns and payments are due on or before the 25th of each month following the collection month. For example, taxes collected in March are due on or before April 25.
Quarterly taxpayer: Returns and payments are due on or before the last day of the month following the end of the quarter. For example, taxes collected for the first quarter – January through March – are due on or before April 30.
Annual filers: Returns and payments are due on or before April 15 of the year following the collection year. For example, taxes collected in 2022 are due on or before April 15, 2023.

If the due date is a holiday or weekend, the due date is the next business day.

Washington sales tax holiday

Washington does not have a sales tax holiday. However, legislators are trying to pass a one-time sales tax holiday for September 2022.

Remote and marketplace sellers

Remote sellers and marketplace facilitators must register to pay Washington’s sales tax if it meets the financial nexus. If a business has $100,000 or more in gross receipts, it must collect the state and local jurisdiction sales tax.

FAQs

What is the Washington sales tax for 2022?

Washington’s state sales tax is 6.5 percent. Many local jurisdictions also charge a sales tax and other special taxes.

How do I get a sales tax resale certificate (exemption certificate)?

Washington businesses must apply for a reseller permit. The permits expire. The state sends out renewal notices within 90 days of the expiration date.

What are the exemptions for Washington's retail sales tax?

Common exemptions include groceries, newspapers, and prescription drugs. Sales to the federal government are exempt. Additionally, any machinery and equipment used directly in manufacturing are exempt.

What is gross income?

Some tax forms may ask for gross income instead of taxable retail sales. Gross income is the total of all sales the business made, whether taxable or not.

Do tribal members pay retail sales tax?

Indians are exempt from paying sales tax if the sale is in Indian Country or if the tangible personal property is delivered to Indian Country.

The post Washington Sales Tax Guide first appeared on Chamber of Commerce.

Wyoming Sales Tax Guide

Chamber of Commerce Team — Tue, 05 Apr 2022 01:09:36 +0000

Wyoming’s sales tax is 4 percent. The state also has several special, local, and excise taxes. Cities, counties, and other municipalities may also have additional taxes related to retail sales. Businesses should ensure that they collect all monies related to their industries, as the state levies taxes against certain industries, such as alcohol, lodging, and tobacco.

Additionally, certain nonprofits and industries such as farming and manufacturing are exempt from paying taxes on certain items.

This guide does not fully describe all of Wyoming’s laws and regulations regarding taxes. Businesses should contact a business attorney or visit the Wyoming Department of Revenue website to learn more about the rules, regulations, tax laws, and tax information associated with their industries and the types of taxes due.

Types of taxes

In addition to Wyoming’s retail sales tax and use tax, business taxpayers must collect or pay several other taxes, including a use tax, local taxes, and special taxes.

Sales and use tax for sales of goods and services

Wyoming has a use tax that works in conjunction with the sales tax. Business filers pay one or the other. The use tax rate is not a consumer tax – it is a tax that a business pays for storing or using taxable tangible personal property instead of selling it. For example, a business purchases 20 cases of a cleaning agent to sell. It uses two of the cases in the business. The business would collect tax from the sale of 18 cases and pay use tax on two cases.

The use tax return is within the sales tax return.

Alcoholic beverage taxes

Wyoming levies an excise tax on alcohol. Currently, local municipalities do not add extra taxes to liquor and beer. Businesses must collect the special excise taxes on top of the sales tax rate of 4 percent.

The taxes are as follows:

Beer and malt beverages: $0.005 per liter.
Fermented liquors (wine): $0.0075 per 100 milliliters.
Spirits: $0.025 per 100 milliliters.

One hundred milliliters is approximately 3.4 ounces. One liter is approximately 33.8 ounces.

Motor vehicle rental surcharge tax

Motor vehicle rental agencies must charge and collect a 4-percent tax on top of the sales tax. Businesses file reports twice per year but pay at the end of the year. The reports include

The rental agency certificate number.
The legal name of the business.
Mailing address.
Phone number.
Fax number.
All Wyoming locations.

The tax is based on the total dollar amount of rental transactions from January 1 through June 30 for the first report and from July 1 through December 31 for the second report. Figure the motor vehicle rental excise tax before sales tax. For example, if the total receipts for the period were $100,000, the excise tax is $4,000, and the total sales tax is $4,000.

Businesses deduct Wyoming registration fees for the reporting period from the amount. For example, if registration fees for the first half of the year are $2,000, the total tax due is $2,000.

The business remits the end-of-year report and payment of taxes for the entire year in January of the following year.

Motor fuel taxes

Wyoming has several fuel taxes:

Gasoline: $0.24 per gallon ($0.23 on all gasoline sold plus $0.01 per gallon license tax).
Gasoline for aircraft: $0.04 per gallon.
Diesel fuels: $0.25 per gallon ($0.23 per gallon sold or distributed plus $0.01 per gallon license tax).
Jet fuel: $0.04 per gallon.
Alternative fuels: $0.24 per gallon, which includes a $0.01 license tax. Businesses use the gallon equivalent of liquid petroleum gas, compressed natural gas, or electricity for tax purposes. The tax includes a $0.01 license tax.

Lodging tax

Wyoming has a lodging tax of 5 percent. Lodging services include sleeping accommodations for transient guests, including:

Hotels.
Motels.
Campgrounds for tents, campers, trailers, mobile homes, and other mobile sleeping accommodations.

Guides and outfitters must also collect the lodging tax for sleeping accommodations, including:

Tents.
Snow shelters.
Base camps.
Temporary structures that are dismantled after being used and any other form of temporary shelter.

The Wyoming Department of Revenue publishes a list of local sales and lodging taxes. The local taxes frequently change, so businesses should check them often.

Guides and outfitters are exempt from local lodging taxes. If a county has a local lodging tax, guides and outfitters collect only 3 percent of the lodging tax as the other 2 percent is distributed to the local jurisdiction.

For example, Laramie County has a local lodging tax of 4 percent. Guides and outfitters providing lodging as part of the service collect:

Sales tax: 6 percent.
Statewide lodging assessment: 3 percent.

If a city or town has a local lodging tax, business providing guides and outfitters collects the 3-percent portion of the state lodging tax, but not the 2 percent that goes to the city. For example, Pinedale has a 4-percent local lodging tax. The business would collect:

Sales tax: 4 percent.
Statewide lodging assessment: 3 percent.

If the guide or outfitter provides lodging with their services outside of Pinedale but in Sublette County, the business will collect:

Sales tax: 4 percent.
Statewide lodging assessment: 5 percent (Sublette County does not have a local lodging tax).

Since Lusk has a local lodging tax of 3 percent, guides and outfitters would collect the sales tax of 6 percent plus the statewide assessment tax of 3 percent. Lusk is in Niobrara County, which does not have a local lodging tax. If the guide or outfitter provides services outside of Lusk’s boundaries but within the county of Niobrara, the business will collect the state sales tax of 6 percent and the statewide lodging assessment of 5 percent.

Because some of the services a guide or outfitter offers are not taxable, the business must list each service separately in order to distinguish between taxable and non-taxable services. If the business does not list items separately, then the entire amount is taxable.

For example, if an invoice includes guide service at $1,000, meals at $100, and lodging at $50, the consumer pays sales tax on meals and lodging, no tax on the guide service, and the state lodging assessment on lodging.

Discretionary tax (Local sales tax)

Certain counties levy a general-purpose county option tax rate, specific purpose county option tax rate, an economic development tax, and resort district tax as follows:

County	General Purpose County Option Tax Rate	Specific Purpose County Option Tax Rate	Economic Development Tax	Resort District Tax	Total Local Taxes
Albany	1%	1%	0	0	2%
Big Horn	1%	0	0	0	1%
Campbell	1%	0	0	0	1%
Carbon	1%	1%	0	0	2%
Converse	1%	0	0	0	1%
Crook	1%	1%	0	0	2%
Fremont	1%	0	.50%	0	1.50%
Goshen	1%	0	.25%	0	1.25%
Hot Springs	1%	1%	0	0	2%
Johnson	1%	1%	0	0	2%
Laramie	1%	1%	0	0	2%
Lincoln	1%	0	0	0	1%
Natrona	1%	0	0	0	1%
Niobrara	1%	1%	0	0	2%
Park	0	0	0	0	0
Platte	1%	1%	0	0	2%
Sheridan	1%	1%	0	0	2%
Sublette	0	0	0	0	0
Sweetwater	1%	0	0	0	1%
Teton	1%	1%	0	0	2%
Teton Village Resort District	1%	1%		2%	4%
Grand Targhee Resort District	1%	1%	0	2%	4%
Uinta	1%	0	0	0	1%
Washakie	1%	0	0	0	1%
Weston	1%	1%	0	0	2%

All local taxes are in addition to the state sales tax of 4 percent.

Registering for and filing Wyoming's taxes

Register at the Wyoming Department of Revenue to file sales and use tax returns and pay taxes. The state still allows paper filing for applications and submitting tax returns and other tax forms.

Wyoming sales tax holiday

Wyoming does not have a sales tax holiday.

Remote and marketplace sellers

Remote sellers and marketplace facilitators must collect sales tax from retail sales into Wyoming if they meet the financial nexus of:

Gross receipts of over $100,000 for the previous year; or
200 or more individual transactions into the state.

Small businesses that do not meet the nexus are not required to collect sales tax. However, most businesses collect the tax as a convenience for their customers. If a business does not collect the sales tax, the consumer must pay use tax on taxable tangible personal property and services.

Wyoming sales tax exemptions

Wyoming law provides several sales tax exemptions. Some of the more common exemptions include:

Sales to training and apprenticeship programs that are joint between Wyoming and the United States Department of Labor.
Sales to certain manufacturers, processors, and compounders when the tangible personal property is an ingredient or part of the tangible personal property being manufactured, processed, or compounded.
Livestock for marketing purposes.
Livestock feed for marketing purposes.
Poultry for marketing purposes.
Poultry feed for marketing purposes.
Seeds, bulbs, small plants, roots, and fertilizer to grow products to be sold.
Wholesale sales, with the exception of controlled substances not sold with a prescription.
Fuel, if used as boiler fuel to produce electricity.
Tangible personal property and services sold to the government, and certain charitable and nonprofit organizations.
Water delivered by truck or pipeline.
Food for home consumption.
Charges for the transportation of drilling rigs.
Newspapers.
Certain farm implements.

FAQs

What is the Wyoming sales tax for 2022?

Wyoming’s sales and use tax is 4 percent. Several counties have additional taxes, plus the state and certain counties have certain special taxes.

How do I get a sales tax resale certificate?

Wyoming’s resale certificate and tax exemption certificate is one document. Purchasers exempt from sales tax must ensure that the entire form is filled out. Give a copy to the seller and keep a copy for yourself.

The post Wyoming Sales Tax Guide first appeared on Chamber of Commerce.

Wisconsin Sales Tax Guide

Chamber of Commerce Team — Fri, 01 Apr 2022 16:20:56 +0000

The Wisconsin sales and use tax is 5 percent for sales of tangible personal property and certain services. The state also allows counties to add a 0.05 percent sales and use tax, and it also has several excise taxes that businesses must collect.

This guide does not fully describe all of Wisconsin’s laws and regulations regarding taxes. Businesses should contact a business attorney or visit the Wisconsin Department of Revenue website to learn more about the rules, regulations, tax laws and tax information associated with their industries and the types of taxes due.

Types of taxes

Before a business opens, it must be ready to collect sales and use tax, plus any additional excise taxes pertaining to the business’s industry. Businesses must also collect Wisconsin’s local sales taxes.

Sales and use tax for sales of goods and services

Wisconsin’s sales tax rate of 5 percent is the same as the use tax rate. Business taxpayers must pay the use tax if they purchase taxable tangible personal property and do not resell it but instead use it or store it.

Individuals must also pay the use tax if they purchase taxable goods and do not pay the tax on them. This is a common occurrence if a person buys something from a marketplace seller or another online store that does not meet the physical or financial nexus for taxable retail sales in Wisconsin.

Alcoholic beverage taxes

Wisconsin has an alcoholic beverage tax, though most consumers do not “see” the tax because it is paid by:

Wholesalers importing distilled spirits and wine from a foreign country.
Shippers from out of state who ship distilled spirits and wine into Wisconsin.
Manufacturers or rectifiers in Wisconsin who produce or bottle distilled spirits and wine.
Direct shippers who ship wine to consumers in Wisconsin.

The tax is as follows:

Intoxicating liquor (distilled spirits): 85.86 cents per liter, plus an administrative fee of 2.90 cents per liter.
Wine 14 percent or less alcohol by volume: 6.605 cents per liter.
Wine more than 14 percent alcohol by volume: 11.89 cents per liter.
Cider 7 to 14 percent alcohol by volume: 6.605 cents per liter.
Cider more than 14 percent alcohol by volume: 11.89 cents per liter.
Cider less than 7 percent alcohol by volume: 1.71 cents per liter.

Automobile rental surcharge tax

Wisconsin imposes a 5-percent fee for the lease or rental of a vehicle. Additionally, sales from providing a limousine service are taxed at 5 percent.

Exemptions include:

Vehicles without drivers rented to or provided to those having their vehicles repaired.
Rentals that are not in Wisconsin.
Rentals to the U.S. Government, nonprofit organizations holding an exemption certificate, and public or private elementary or secondary schools.
Re-rentals.

Beer tax

Wisconsin has a beer tax (fermented malt beverage tax). Breweries and brewpubs in the state must pay the tax. Additionally, wholesalers importing beer from a foreign country and out-of-state shippers shipping into Wisconsin must pay the tax.

The fermented malt beverage tax is $2.00 on every 31-gallon barrel. However, if a brewer produces less than 300,000 barrels per year, the brewer is eligible for a tax credit of $1.00 per barrel for the first 50,000 barrels.

Coin-operated amusement tax

If a business operates a coin-operated amusement device, it must pay sales tax on receipts from consumers using the device. For example, if the business took in $2,000 from a coin-operated pool table and the combined county and state sales tax rate is 5.5 percent, the sales tax due is $110. Do not subtract payouts or commissions to the owner of the establishment.

Coin-operated amusements also have a franchise tax. The operator reports income and expenses to figure the franchise tax. For example, the gross receipts are $2,000. The operator can deduct:

The sales tax of $110.
Commissions.
Payouts to winning players.
Repairs and maintenance.
Depreciation.
Supplies.
Travel expenses.

Net receipts after deducting sales tax are $1,890. If the deductions add up to $1,870, then the operator pays $20 for the franchise tax ($2,000 minus $110 equals $1,890. Then subtract expenses of $1,870 for a total of $20).

Franchise and income tax

Wisconsin has a franchise tax and an income tax it imposes on businesses. A business pays one or the other – not both. At the state level, the tax provisions are almost the same. It is at the federal level that the tax is different.

The franchise tax of 7.9 percent applies to domestic corporations that have nonexempt income and businesses not organized under Wisconsin law (foreign corporations).

The only exception to the franchise tax, other than paying income tax, is where taxation is exempted by statute or barred by federal law.

The income tax is also 7.9 percent levied on foreign corporations that are not subject to the franchise tax and own property in Wisconsin. The income tax also applies to businesses that have exclusively foreign or interstate commerce.

Motor fuel taxes

Suppliers of motor vehicle fuel pay the tax on terminal receipts or imports of motor vehicle fuel into Wisconsin by means other than a marine vessel or pipeline. An unlicensed blender using untaxed fuel products where the products would normally be taxed is also subject to the motor fuel taxes. For example, when a consumer blends kerosene with diesel in the tank of a licensed motor vehicle to make the vehicle easier to start, that person must pay the tax.

The tax is 30.9 cents per gallon.

Premier resort area tax rate

The Wisconsin Department of Revenue also administers the premier resort area tax, which is a local retail sales tax. The tax is used to pay for infrastructure expenses in the jurisdiction. Jurisdictions that have the premier resort area tax include:

Village of Ephraim: 0.5 percent.
Village of Sister Bay: 0.5 percent.
Village of Stockholm: 0.5 percent.
Village of Lake Delton: 1.25 percent.
City of Rhinelander: 0.5 percent.
City of Eagle River: 0.5 percent.
City of Bayfield: 0.5 percent.
City of Wisconsin Dells: 1.25 percent.

Local exposition taxes

The City of Milwaukee’s Local Exposition District, called the Wisconsin Center Tax District, imposes a tax to fund exposition center facilities. While the Wisconsin Department of Revenue administers the taxes, they go to the city. The taxes include:

Basic room tax: 3 percent.
Additional room tax for the City of Milwaukee only: 7 percent.
Food and beverage tax: 0.5 percent.
Rental car tax: 3 percent.

Anyone selling lodging, renting automobiles, or selling food and beverages in any municipality that is partially or wholly in Milwaukee County must collect and remit the tax.

Dry cleaning facility license fee

Dry cleaners must pay a license fee of 2.8 percent of their gross receipts from the previous three months. The fee only applies to dry cleaning apparel and household fabrics, not formal wear that the dry cleaning facility rents to the general public.

Dry cleaners also have to pay a dry cleaning products fee of $5 per gallon of perchloroethylene sold and $0.75 per gallon for any dry cleaning product sold that is not perchloroethylene.

Cigarette tax

The tax on cigarettes is at the distributor level. The distributor pays the tax and affixes a tax stamp to the cigarettes. The tax is included in the price to the retailer. The cigarette tax is 12.6 cents per single cigarette and $2.52 per pack.

Tobacco products tax

The tobacco products tax is paid by manufacturers who manufacture tobacco products in Wisconsin. However, anyone in the state who purchases tobacco products for sale or resale from someone without a valid distributor license must also pay the tax. And anyone outside of Wisconsin who ships tobacco to consumers and businesses in the state and does not hold a distributor permit from Wisconsin must also pay the tax.

The tax is 71 percent of the manufacturer’s list price to distributors for tobacco products. Moist snuff has a 100 percent tax based on the manufacturer’s list price. The tax on cigars is 71 percent of the manufacturer’s list price or $0.50 per cigar, whichever is lower.

Discretionary sales tax rates

Sixty-eight Wisconsin counties elected to adopt a 0.5-percent county tax that applies to retail sales, leases, licenses, and rentals of tangible personal property. The tax is in addition to the state tax.

The counties subject to the 0.5-percent tax are listed by the Wisconsin Department of Revenue and include

Adams
Barron
Calumet
Dane
Eau Claire
Florence
Grant
Iowa
Jackson
Kenosha
La Crosse
Manitowoc
Oconto
Pepin
Racine
St. Croix
Taylor
Vernon
Walworth

Businesses and consumers can find a complete list of counties that charge the 0.5-percent county tax by visiting the Wisconsin Department of Revenue and should always check the tax to ensure that their point-of-sale terminals are always updated. As with any other tax, the county tax could change from year to year.

Registering for and fling Wisconsin's taxes

If a business is not already registered or is an out-of-state business, it must first register with the Department of Revenue. Otherwise, a business needs to create a tax account.

Wisconsin sales tax holiday

Wisconsin does not have a sales tax holiday.

Remote and marketplace sellers

Remote sellers and marketplace facilitators must register for a Wisconsin sales tax account if their gross receipts for the previous year were $100,000 or more or if they had 200 or more individual sales into Wisconsin.

Small sellers are exempt by law, but many collect sales tax as a convenience for their customers. If a business does not collect Wisconsin sales tax, the consumer must pay the use tax.

FAQs

What is the Wisconsin sales tax for 2022?

Wisconsin’s sales tax is 5 percent. Additionally, several counties have a 0.5 percent sales tax rate. The state also has several specialty taxes and excise taxes.

How do I get a sales tax resale certificate?

Wisconsin calls the resale certificate a “seller’s permit.” You must apply for the permit. Additionally, the state could charge up to a $15,000 “security deposit” for the permit. Businesses must apply for the permit at least three weeks before starting the business. Register online for the permit or submit Form BTR-101 Application for Wisconsin Business Tax Registration.

Do I still have to file a tax return if I have zero sales?

Yes, you must still file a sales tax return.

Are sales to Native American Tribal members exempt?

Yes, but only if the sale takes place on the reservation and the person is a member of the reservation.

The post Wisconsin Sales Tax Guide first appeared on Chamber of Commerce.

West Virginia Sales Tax Guide

Chamber of Commerce Team — Fri, 01 Apr 2022 16:20:26 +0000

West Virginia’s state sales tax is 6 percent. The state also has a complementary use tax, municipality taxes, and several special taxes. Businesses must determine which taxes apply to them and charge their consumers accordingly, then submit a combined sales and use tax return to the West Virginia State Tax Department.

This guide does not fully describe all of West Virginia’s laws and regulations regarding taxes. Businesses should contact a business attorney or visit the West Virginia State Tax Department website to learn more about the rules, regulations, tax laws, and tax information associated with their industries and the types of taxes due.

Types of taxes

In addition to the sales tax of 6 percent, West Virginia has several additional taxes based on the municipality and industry you are in.

Sales and use tax for sales of goods and services

The sales tax has a complementary use tax. Consumers and businesses do not pay both. If a business purchases tangible taxable personal property without paying taxes and does not resell the items, it must pay use tax on them. If a consumer purchases tangible personal property and does not pay tax, the consumer must pay the use tax. Some online businesses do not charge West Virginia’s sales tax because they do not meet the physical or financial nexus.

Local wine and liquor distribution tax

Retailers selling wine and liquor must collect and remit:

The state sales and use tax of 6 percent.
Municipality sales and use tax for the business location.
Local wine and liquor tax of 5 percent.

The state requires a retailer to complete two forms: The CST-200CU Combined Sales and Use Tax Return and the CST-270 Wine/Liquor Return.

To determine the total tax due for a municipality that charges a 1-percent sales and use tax:

Multiply gross sales by 7 percent combined state and municipality tax. If a sale is $100, the tax is $7, for a total of $107.
Multiply gross sales by 5 percent. If a sale is $100, the tax is $5. Add the $5 to $107 for a total due from the consumer of $112.

Retailers can also file both taxes online.

Special district excise tax

If a municipality has a Special District Excise Tax for economic opportunity development, the business pays only this tax. It does not have to pay the state’s sales tax. As of this writing, Monongalia County, Harrison County and Ohio company are the only three counties with a Special District Excise Tax:

Monongalia County: University Town Center. The tax rate is 6 percent.
Harrison County: Charles Pointe. The tax rate is 6 percent.
Ohio County: The Highlands. The tax rate is 6 percent.
South Charleston: Park Place. The tax rate is 6 percent.

The local sales tax of 1 percent still applies to Park Place, so the total tax rate for that local jurisdiction is 7 percent.

If the business taxpayer has sales only in Park Place, it can file the local tax on the District forms. However, if the business has sales from other physical business locations or sales made by delivery to locations not in the District, it must file those sales on the regular sales tax return (CST-200CU).

West Virginia fireworks safety fee

Businesses that make retail sales of consumer fireworks must collect a 12-percent safety fee in addition to the state sales tax. This fee is due on the 20th of each month for the previous calendar month.

Thus, if a consumer purchases $200 in fireworks, the business must collect 6 percent for the state tax plus the municipality tax (we’ll use 1 percent for this example), and the 12 percent safety fee. Multiply the total due by .06 to get the state tax of $12, then by .01 to get the local tax due of $4, and finally, by .12 to get the fireworks safety fee of $24. The total sale is $240.

Factory built homes

Businesses that sell factory-built homes must charge the state’s sales tax rate of 6 percent on 50 percent of the cost of the home. The tax applies to homes being used as the consumer’s principal year-round residence. All other sales are subject to sales tax on the full price of the home.

Additionally, businesses must also pay a factory-built homes fee of $20 per home.

Motor fuel taxes

West Virginia has two motor fuel taxes – a flat rate and a variable rate. The combined rate for the different types of fuel are:

Gasoline: $0.3570.
Diesel: $0.3570.
Gasohol: $0.3570.
Liquid propane: $0.2222.
Liquid natural gas: $0.1600.
Compressed natural gas: $0.2490.
Ethanol: $0.3570.
Methanol: $0.3570.
E-85: $0.3570.
M-85: $0.3570.
Biodiesel: $0.3570.

The following fuels are subject only to the variable rate as follows:

Dyed diesel: $0.1520.
Aviation gas: $0.1520.
Aviation jet fuel: $0.1520.
#1 fuel oil: $0.1520.
Heating oil: $0.1520.
Dyed biodiesel: $0.1520.
Dyed kerosene: $0.1520.

Cigarette and tobacco products tax

West Virginia has a cigarette tax and a tax on other tobacco products. The cigarette tax is $1.20 per pack of 20 cigarettes. The state taxes other tobacco products at 12 percent of the wholesale price.

Additionally, when the cigarette tax increases, the state charges a floor stock tax on wholesale dealers and retailers with stamped cigarettes in their possession that were stamped at the lower rate. The floor tax also applies to other tobacco products. The floor tax for cigarettes is $0.65 per pack of 20 cigarettes and 5 percent of the wholesale price for other tobacco products already stocked.

Discretionary sales tax rates

Several municipalities in West Virginia charge a 1-percent municipal sales and use tax. The tax is on taxable goods, services provided within the municipality, and custom software. Local businesses collect this tax in addition to the state sales tax.

Registering for and filing West Virginia's taxes

Businesses can file their taxes online through the MyTaxes website.

File Your West Virginia Sales and Use Tax Return Online

As of May 15, 2008, if you are filing this tax electronically, it must be filed through the MyTaxes website. They may also file a paper copy of the CST-200 Consumer’s Sales and Service Tax Return. If filing a paper copy, businesses should make the sales tax return and remit payment to: Tax Account Administration Div., PO Box 1826, Charleston, WV, 25327-1826.

If a business needs assistance with filing taxes, it can call (304) 558-3333 or (800) 982-8297.

West Virginia's sales tax holiday

The West Virginia sales tax holiday is from 12:00 a.m. on Friday, August 5, 2022, through 11:59 p.m. on Monday, August 8, 2022.

Qualifying items include:

Certain clothing costing less than $125.
Certain school supplies costing $50 or less.
Some laptops and tables costing $500 or less.
Some school instruction material costing $20 or less.
Certain sports equipment costing $150 or less.

Consumers can have more than one items that are tax-free in the same transaction, even if the total of both items exceeds the threshold. The qualification is based on the purchase price of each item.

Remote and marketplace sellers and retail sales tax

Remote sellers and marketplace facilitators must collect West Virginia’s sales tax rate, including the municipal taxes, if they meet the thresholds of $100,000 in gross receipts for the previous year or 200 individual sales into West Virginia.

Consumers who purchase products and services from a remote business that does not meet the financial nexus and does not collect tax must pay use tax on the items they purchased.

West Virginia tax exemptions

Certain items are tax-exempt and do not require a sales tax exemption certificate, including:

Advertising.
Contracting for real property, including construction, repair, alteration, decoration, or improvement.
Daycare center services.
Certain drugs, mobility enhancing equipment, durable medical goods and prosthetic devices.
Prescriptions.
Summer camp tuition for educational summer camps.
Fundraiser sales by certain nonprofit organizations and churches.
Copyrights, royalties, bonds, and other intangible property.
Newspapers and lottery tickets.
Personal services, such as hair styling and barbering.
Certain professional services, including certified public accountants.
Certain transportation services.

West Virginia sales tax due dates

Depending on the amount a business collects, it has to pay sales tax on a monthly, quarterly, or yearly basis. A business learns of its due dates when it creates an account.

Generally, sales and use tax is due on the 20th of the month following the month when the business collects the tax. For example, taxes collected in January are due on or before February 20.

Quarterly taxes are due on the 20th day of the month following the end of the quarter. For example, taxes collected from January through March are due on or before April 20.

Annual taxes are due on or before January 20 of the year following the collection year. For example, filers pay taxes collected in 2022 on or before January 20, 2023.

FAQs

What is West Virginia's sales tax for 2022?

West Virginia’s sales tax for 2022 is 6 percent. Several municipalities in the state also charge an additional sales and use tax rate.

How do I get a sales tax resale certificate for sales of tangible personal property?

Businesses can download the Streamlined Certificate to use as a resale certificate. Tax-exempt businesses that qualify, such as certain nonprofits and governmental agencies and also use this document as a tax-exempt certificate.

The post West Virginia Sales Tax Guide first appeared on Chamber of Commerce.

Pennsylvania Sales Tax Guide

Chamber of Commerce Team — Mon, 28 Mar 2022 14:40:31 +0000

Pennsylvania’s sales and use tax rate is 6 percent. Additionally, the state allows local jurisdictions to add additional sales tax. The state, county, or municipalities can also add specialty taxes, such as accommodations taxes, rental taxes, and more.

This guide does not fully describe all of Pennsylvania’s laws and regulations regarding taxes. Business taxpayers should contact a business attorney or visit the Pennsylvania Department of Revenue website to learn more about the rules, regulations, tax laws, and tax information associated with their industries and the types of taxes due.

Types of taxes

Pennsylvania has several taxes for various industries in addition to sales and use taxes.

Sales and use tax for sales of goods and services

Pennsylvania taxes sales of tangible personal property and some services at 6 percent. Some counties or municipalities add discretionary sales and use tax. Business owners must pay use tax if they purchase taxable goods or services without paying tax and store or use them instead of reselling.

An individual who purchases taxable goods and does not pay the sales tax at the time of purchase must also pay use tax. This might happen if someone purchases goods from out of state and the seller does not charge sales tax. The use tax return is the same as the sales tax return.

Alcoholic beverage taxes

Pennsylvania has three alcoholic beverage taxes.

Direct wine shipments: In addition to the state and local sales taxes, direct wine shipments are subject to a $2.50 per gallon excise tax. Pennsylvania’s liquor tax does not apply to direct wine shipments.
Malt beverage tax: Malt and brewed beverages manufactured or sold in Pennsylvania or manufactured out of state but sold in Pennsylvania are taxed. The manufacturers, distributors, and importers remit the tax but pass it onto consumers. The malt beverage tax is $2.48 per gallon.
Liquor tax: The state levies an 18-percent tax on the distribution of liquor. The first sale of liquor, e.g., to a retailer, is the sale that is taxed. The manufacturers include the cost of the tax in their products, which is eventually passed onto the consumer.

Motor vehicle rental surcharge tax

Pennsylvania has several rental and tire surcharge taxes. The taxes are in addition to sales and use tax and other taxes levied on vehicle rentals. When figuring the tax, do not tax one tax with another. For example, if a vehicle rental is $100, figure the sales tax on $100, the vehicle rental tax on $100, and the other taxes on $100.

Tires: $1 per new tire. Only new tires for highway use are taxed. Off-road tires and used tires are not subject to this fee.
Motor vehicle rentals: $2 per rental day or part of a rental day if the rental is for fewer than 30 days.
Motor vehicle leases: 3 percent tax on the total lease payment, including the down payment and any accelerated lease payments.

Additionally, Pennsylvania levies a 2-percent vehicle rental tax on rental companies that rent vehicles designed to carry 15 or fewer passengers if the rental agency has five or more motor vehicles. The tax also applies to trucks, trailers and semi-trailers used to transport property that is not commercial freight. The tax is on vehicles rented for 29 or fewer consecutive days.

Carsharing services must also pay a tax as follows:

Less than 2 hours: $0.25
2 to 3 hours: $0.50
Over three hours, but less than 4 hours: $1.25
4 or more hours: $2.00

Accommodations tax

A room rental charge at the same rate as the sales tax rate – 6 percent – is levied on room rentals for 30 or fewer days by the same person. The tax also applies to rooms, apartments, and houses rented through third-party brokers or online. Accommodation fees charged by booking agents are also taxable at the 6-percent rate.

Gross receipts tax

Pennsylvania levies a gross receipts tax on several industries, including:

Electric companies: 59 mills on gross receipts from electric energy sales. The tax is paid annually, and the due date is March 15.
Telecommunications: 50 mills on gross receipts from telephone and telegraph messages transmitted within Pennsylvania. Included are mobile telecommunications services, international landline calls that originate or terminate in Pennsylvania, interstate calls, and calls billed to a service address within the state. The tax is payable yearly on March 15.
Transportation: 50 mills on gross receipts from baggage, freight, and passengers transported in Pennsylvania. Intrastate shipments of freight and oil are also taxed. Transportation by railroad and motor vehicles is exempt. The tax is due annually on March 15.
Private bankers: 1 percent on gross receipts from commissions on loans, discounts on loans, banking services, depositor account fees and charges, safe deposit box rentals, profits from the purchase and sale of securities, and interest on mortgages, bonds, dividends and premiums. The tax is due annually on February 15.
Managed care organizations: 59 mills on gross receipts received by managed care organizations pursuant to a contract with the Pennsylvania Department of Public Welfare.

Motor fuel taxes

The motor fuel tax rates for 2022 are good through the calendar year. In addition to the motor fuel tax rates for various types of fuel, the business must pay a 1.1-cent per gallon underground storage tank fee to the Insurance Department. Motor fuel taxes include:

Aviation gasoline: $0.060 per gallon
Jet fuel: $0.020 per gallon
Liquid fuels (gasoline for engines and gasohol): $0.576 per gallon
Undyed diesel and undyed kerosene: $0.741 per gallon

e-911 tax

Retail businesses selling wireless telephones and pre-paid telecommunication services must collect and remit $1.65 per retail transaction for emergency-911 surcharges.

Discretionary taxes

In addition to the state sales tax of 6 percent, Allegheny County levies a 1-percent sales tax on retail sales. Philadelphia levies a 2-percent local tax to sales of tangible personal property.

Registering for and filing Pennsylvania's taxes

Register to pay sales tax and other taxes with the Pennsylvania Department of Revenue e-TIDES. You can also amend sales tax returns through e-TIDES.

Pennsylvania sales tax due dates

Sales taxes are due monthly, quarterly, or semi-annually. In some cases, the tax must be pre-paid. When you sign up for your account, the Pennsylvania Department of Revenue will advise as to your payment frequency.

Sales, use, and hotel occupancy taxes are due:

Monthly: On the 20th day of the month following the month that the business collected the tax.
Quarterly: On the 20th day of the first month after the end of the quarter. For example, first-quarter taxes collected from January through March are due on or before April 20.
Semi-Annually: The first half of 2022 is due on or before August 22, 2022. The second half is due on or before February 21, 2022.

Pre-paid taxes for 2022 are due pursuant to the following:

January 1 through January 31: Due January 20.
February 1 through February 28: Due February 22.
March 1 through March 31: Due March 21.
April 1 through April 30: Due April 20.
May 1 through May 31: Due May 20.
June 1 through June 30: Due June 21.
July 1 through July 31: Due July 20.
August 1 through August 31: Due August 22.
September 1 through September 30: Due September 20.
October 1 through October 31: Due October 20.
November 1 through November 30: Due November 21.
December 1 through December 31: Due December 20.

Pennsylvania sales tax holiday

Pennsylvania does not have a sales tax holiday as of the end of the third quarter of 2022, though a Pennsylvania senator is pushing for a sales tax holiday.

Remote and marketplace sellers

Remote sellers and marketplace facilitators must collect Pennsylvania sales tax if they have over $100,000 in gross receipts into the state for the previous year. Previously, the state had an option for out-of-state businesses to advise buyers to pay use tax. However, that option is no longer available. Collecting sales tax if a business meets the financial nexus is mandatory.

FAQs

What is the Pennsylvania sales tax for 2022?

The sales tax rate and use tax rate for Pennsylvania is 6 percent. Alleghany County adds 1 percent to the sales tax rate, and Philadelphia adds 2 percent to the state sales tax rate.

How do I get a sales tax resale certificate?

Pennsylvania has one tax form for an exemption certificate and resale certificate. The business does not have to file the form but must give a completed copy to a seller. Nonprofits and other exempt businesses must also give a copy to the seller. Businesses should also keep a copy for each seller in their records.

How can a business get tax updates in Pennsylvania?

Pennsylvania businesses can register for tax updates via email.

Can a business mail in a tax return and payment?

The Pennsylvania Department of Revenue prefers that businesses file online or through Telefile ((800) 748-8299). Payments over $1,000 must be made electronically. Otherwise, if a business must file via mail, it should mail payments and returns to the PA Department of Revenue, B.I.D.M., PO Box 280406, Harrisburg, PA 17128-0406.

What if a business has to pay by mail and the payment is over $1,000?

Businesses can send a certified cashier’s check or money order for the amount due to the PA Department of Revenue, BTFT EFT Unit, 9th Floor Strawberry Unit, Fourth and Walnut Streets, Harrisburg, PA 17128-0908.

Can more than one person use my e-TIDES account?

E-TIDES allows more than one person to have access to the account. However, each filer must register their own electronic signature. Each filer will have a personal user ID and password to access the account.

The Administrator of the e-TIDES account is no longer with the company. What do I do?

Complete REV-1176 e-TIDES Administrative Access Change Request and the REV-677 Power of Attorney and Declaration of Representative forms to remove the old administrator and change the access rights to the account.

The post Pennsylvania Sales Tax Guide first appeared on Chamber of Commerce.

South Dakota Sales Tax Guide

Chamber of Commerce Team — Mon, 28 Mar 2022 14:40:04 +0000

South Dakota’s sales and use tax rate is 4.5 percent. The state also has several special taxes and local jurisdiction taxes at the city and county levels, including lodging taxes, alcohol taxes, admissions taxes, and taxes on eating establishments. Other taxes include telecommunications taxes, tourism taxes, and motor vehicle taxes.

This guide does not fully describe all of South Dakota’s laws and regulations regarding taxes. Businesses should contact a business attorney or visit the South Dakota Department of Revenue website to learn more about the rules, regulations, tax laws and tax information associated with their industries and the types of taxes due.

Types of taxes

In addition to South Dakota’s 4.5-percent sales tax, the state has a use tax, which is the rate.

Sales and use tax for sales of goods

Businesses making retail sales and selling some services must collect and remit South Dakota’s sales tax of 4.5 percent. If a business purchases tangible personal property and stores or uses it instead of reselling it, the business must pay the use tax on the items. For example, a business that purchases 10 cases of Widget A and only sells eight cases. Instead of trying to sell a slow-moving item, the business decides to use the other two cases in the business. It must pay the use tax on the two cases. The sales tax return and use tax return are on the same tax form.

Motor vehicle tax

South Dakota has a motor vehicle excise tax fee of 4 percent of the purchase price. Additionally, South Dakota has a motor vehicle gross receipts tax of 4.5 percent that applies to the rental of cars, trucks, motorcycles and vans if the business rents them to the same person for less than 28 days. Certain trailers are also subject to the tax if they are rented for 6 months or less.

Cigarette and tobacco tax

Cigarettes are taxed at $1.53 per pack of 20 and $1.92 per pack of 25. Other tobacco products are taxed at 35 percent of the wholesale purchase price. Additionally, retail sales of cigarettes are subject to the state sales tax rate and the rate at the local jurisdictions, if any.

South Dakota also has a rule that retailers cannot sell cigarettes and other tobacco products for less than 8 percent above the distributor’s or wholesaler’s price.

Tourism tax

The state has a tourism tax of 1.50 percent on the following types of establishments:

Lodging establishments.
Campgrounds.
Recreational equipment rentals.
Motor vehicle rentals.
Recreational services.
Spectator events.
Visitor attractions.

South Dakota levies the tax year-round. Additionally, the tax applies to “visitor-intensive” businesses from July through September.

If a business is exempt from sales tax, it is also exempt from the tourism tax. For example, fair admissions are not subject to the state’s sales tax. Thus, they are not subject to the tourism tax. However, rodeo admissions, rides at a fair and concessions are subject to sales tax. Thus, those items and services are subject to the tourism tax.

Telecommunications tax

The telecommunications tax of 4 percent applies to several telecommunications services, including:

800 services.
Fixed wireless service.
900 services.
Mobile wireless service.
Prepaid calling service.
Paging service.
Prepaid wireless calling service.
Value-added non-voice data service.
Private communication service.
Voice over internet protocol (VoIP).

Prepaid wireless 911 emergency surcharge

Wireless service providers and other businesses that sell prepaid wireless service must collect and remit the prepaid wireless 911 emergency surcharge of 2 percent on gross receipts from retail sales.

Taxable items include prepaid wireless airtime cards and prepaid wireless minutes and plans in addition to other services. If the surcharge is not itemized, it is subject to sales taxes for the state and municipalities.

If the retailer sells prepaid wireless services with non-taxable products for a single price, the entire price is taxable.

Boat excise tax

A boat excise tax of 3 percent applies to the purchase of most boats in addition to the sales tax.

Discretionary taxes (Local sales tax)

Local jurisdictions can impose a gross receipts tax, municipal sales tax and use tax. Although the taxes are for the municipalities, the South Dakota Department of Revenue administers the taxes.

The general municipal sales tax can be up to 2 percent. The gross receipts tax can be up to 1 percent and is in addition to the municipal sales tax.

Municipalities can impose the gross receipts tax on:

Alcoholic beverages.
Lodging accommodations.
Eating establishments.
Admisssions to places of amusements.
Cultural events.
Athletic events.

The South Dakota Department of Revenue also administers these taxes.

The following special jurisdictions have the following taxes:

Cheyenne River: Sales/Use of 4.5 percent; Excise of 2 percent; and River Tourism of 1.5 percent.
Crow Creek: Sales/Use of 4.5 percent; Excise of 2 percent; and Tourism of 1.5 percent.
Oglala: Sales/Use of 4.5 percent; Excise of 2 percent; and Tourism of 1.5 percent.
Rosebud: Sales/Use of 4.5 percent; Excise of 2 percent; and Tourism of 1.5 percent.
Standing Rock: Sales/Use of 4.5 percent; Excise of 2 percent; and Tourism of 1.5 percent.
Sisseton Wahpeton: Use tax only of 4.5 percent and Excise tax of 2 percent.
Yankton: Use tax only of 4.5 percent and Excise tax of 2 percent.

Additionally, the following cities also have special taxes, which are in addition to the state sales tax and the special jurisdictional taxes:

Cheyenne River

Dupree: 1 percent.
Eagle Butte: 2 percent.
Isabel: 2 percent.
Timber Lake: 2 percent.

Standing Rock

McIntosh: 2 percent.
McLaughlin: 2 percent.
Morristown: 1.50 percent.

Rosebud

Mission: 2 percent.

Businesses can also look up their tax rate by address.

Registering for and filing South Dakota's taxes

Business filers should register to file South Dakota’s taxes at the South Dakota Department of Revenue’s EPath page. The online option allows a business to pay by ACH Debit or ACH Credit.

For businesses that prefer to pay by check, send payments to:

South Dakota Department of Revenue

Anderson Building

Mail Stop 5055

Pierre, SD 57501

Businesses can also pay over the phone by calling (800) 829-9188. Payment options are ACH Debit or credit card.

The South Dakota Department of Revenue will accept cash payment in person at one of their offices.

Due dates for retail sales tax

Sales and use taxes are due on the 20th of the month following the collection month. For example, taxes a business collected in January are due on or before February 20.

South Dakota sales tax holiday

South Dakota does not have a sales tax holiday for sales of tangible personal property.

South Dakota sales tax exemptions

The law in South Dakota exempts certain entities from paying sales tax on purchases. Nonprofit and other relief agencies, private schools and religious entities must apply to the South Dakota Department of Revenue for approval of tax exempt status.

Certain entities are tax exempt, including:

State of South Dakota.
United States Government.
Public corporations of the State of South Dakota.
Municipal corporations of the State of South Dakota.
Indian tribes.
Volunteer or municipal fire and ambulance departments.
Nonprofit hospitals.

Remote and marketplace sellers

If a business sells taxable tangible personal property and services into South Dakota, it must file sales tax returns and remit payments if it makes $100,000 or more in gross receipts in South Dakota, or if it has 200 or more individual transactions into the state.

Businesses located in South Dakota must collect another state’s sales taxes if they have more than $100,000 or 200 or more individual transactions into another state. The best way to pay other states’ sales taxes is to register for a Streamline account.

FAQs

What is the South Dakota sales tax for 2022?

South Dakota’s sales tax is 4.5 percent. The state also has several special taxes and additional sales taxes for local jurisdictions.

How do I get a sales tax resale certificate?

South Dakota uses the same certificate as a resale certificate or exemption certificate.

How does a business cancel its license if it goes out of business?

Excise tax licenses are not transferable. If the business changes hands or changes its legal organization type, it must cancel the license and obtain a new license within 15 days. You can cancel it online or check the “Out of Business” box in the upper right corner of a paper return.

How does a business change its mailing address?

A business must notify the South Dakota Department of Revenue in writing of a mailing address change. In the correspondence, include the new address, the effective date of the new address, the business taxpayer number, and the name of the business on the change of address form or change the address in your online account.

Can a business change its accounting method?

If the business changes its accounting method with the IRS, the business must also notify the South Dakota Department of Revenue. If the business uses the accrual method, sales tax is due on the date, even if the business has not collected it. With the cash method, the sales tax is based on gross receipts, so you can pay it as you receive payments.

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