How do I know what is taxable?

Department of revenue or the division of taxation and finance regulates taxable and nontaxable items and services upon which sales and use tax is charged.

Other than following states apply sales and use tax for tangible properties.

1. The state of Alaska: is exempted from sales tax. Sales and use tax is not charged on tangible properties upon transfer of ownership to a new owner.

2. The state of Delaware: is exempted from sales tax. Sales and use tax is not charged on tangible properties upon transfer of ownership to a new owner.

3. The State of Montana: is exempted from sales tax. Sales and use tax is not charged on tangible properties upon transfer of ownership to a new owner.

4. The state of New Hampshire: is exempted from sales tax. Sales and use tax is not charged on tangible properties upon transfer of ownership to a new owner.

5. The state of Oregon: is exempted from sales tax. Sales and use tax is not charged on tangible properties upon transfer of ownership to a new owner.

A list of taxable and nontaxable items are printed from the state website to find out correct sales tax on the specific item.

Sales tax collection has become an important and complex subject for a vendor to determine how, who and when sales tax is charged, especially since the internet sales of taxable goods come into existence.

A vendor considers following fundamental characteristics of a sale activity to determine if the sale is subject to sales and use tax or not.

Enter taxable and nontaxable items carefully in the cash register along with current sales tax rate to charge sales tax automatically upon punching an item by the operator.

A vendor decides and notify to a drop shipper about the responsibility to collect sales tax. A drop shipping is generally a part of eCommerce sale.

The buyer provides resale certificate number to a seller to sell taxable items to an end user and does not pay sales tax on taxable goods and services.

Sales tax rules are different in each state such as sales tax is not charged on hair cutting in Nassau County, where as it is subject to sales tax in New York City. Therefore, acquaintance and awareness is essential to the sale and use tax regulation of the state  where business is conducted to calculate accurately.

Basis of  sale tax rate reveals to a buyer upon selling taxable items  including where sales tax is not charged outright such as an equipment is taxable where as the installation is not.

A business owner is personally accountable by the state for any deficiency in sales tax collection. It is paid to the department of revenue in the period it was collected by a buyer.