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Stephanie B.
Stephanie B., Enrolled Agent
Category: Tax
Satisfied Customers: 555
Experience:  MTax, EA, QuickBooks Proadvisor. Over 10 years accounting and tax experience specializing in individual and small business.
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As a dog breeder in Washington state, do I have to charge and

Customer Question

As a dog breeder in Washington state, do I have to charge and pay sales tax on the puppies I sell?
Submitted: 1 year ago.
Category: Tax
Expert:  Megan C replied 1 year ago.
Thanks for asking your question! I'm sorry to hear about your tax issue and I'm going to try my best to help you understand or resolve it.

No, you do not need to charge and pay sales tax on puppies that you sell in Washington State.

CLICK HERE for more on the Washington State sales tax.

** Please take a moment to rate my response as "Excellent" so that I may be compensated for assisting you today. Please let me know if my assistance was anything less than "OK Service", as I am compensated based on whether or not I have assisted you with your issue. If you need further clarifications, PLEASE WAIT TO XXXXX ANSWER UNTIL AFTER RECEIVING FOLLOW UP FROM ME. If I receive anything less than OK Service, I do not get paid, but the Web site will still collect your payment. Thank you for your kind understanding in this matter. If you have difficulties rating, then simply respond stating that you are having difficulties rating and thank me for my excellent, good, or ok service and we can get the rating applied by the site**
Customer: replied 1 year ago.

I read the info you linked, but there is no mention of dogs or pets in that. Can you please tell me the source of your information? I am terrified that I will owe taxes and get into trouble with the dept. of Revenue.

Expert:  Stephanie B. replied 1 year ago.

Another professional here. I am researching the WA state legislature and what I find is that the puppy sales would be subject to sales tax. Most items are subject to sales tax unless they are "exempted". I pulled up WAC 458-20-210 which discusses Sales of tangible personal property for farming - sales of agricultural products by farmers http://apps.leg.wa.gov/wac/default.aspx?cite=458-20-210...and see that dogs and cats are considered pet animals, so they are not excluded under this section of the legislation. This to me says that the sale of pet animals, which is tangible personal property, to people in the state of WA is subject to sales tax in the state of WA. If you sale a puppy and have them shipped to another state, this would be interstate commerce and you would not owe sales tax to WA on this sale. However, I suggest dropping an email to WA Dept of Revenue and to ensure there are no "exemptions" from the collection of sales tax on the sale of puppies.

If you need further clarification, please let me know.

I look forward to your response.

Stephanie

Expert:  Stephanie B. replied 1 year ago.

I see that you rated my service to you as bad. Please let me know what made you rate this way so I can better assist you.

I look forward to your response.

Stephanie

Customer: replied 1 year ago.

I am really frustrated with this. I asked a question and got 2 totally opposite answers. How am I to know which one is correct? I am clueless. I appreciate both of your time, but it didn't help me one bit. thank you anyway.

Expert:  Stephanie B. replied 1 year ago.
I am sorry that you feel that way. You are correct that you received two different answers. I believe the first answer you were given was incorrect, so I posted after the first professional opted out providing you with a link to WA legislation that does not exclude pet animals under agricultural products. The link the first professional gave you was a "not all-inclusive" list of items subject to sales tax. Items that are not excluded under legislation are inclusive for sales tax purposes. I again suggest that you send an email to your WA Dept of Revenue requesting further clarification of the sales tax issue. Especially if you are unsure with the responses you received here.

I appreciate your honesty and appreciate your response.

Stephanie
Expert:  Megan C replied 1 year ago.
I would not classify an animal as tangible personal property, which is why I said no tax is owed.

** Please take a moment to rate my response as "Excellent" so that I may be compensated for assisting you today. Please let me know if my assistance was anything less than "OK Service", as I am compensated based on whether or not I have assisted you with your issue. If you need further clarifications, PLEASE WAIT TO XXXXX ANSWER UNTIL AFTER RECEIVING FOLLOW UP FROM ME. If I receive anything less than OK Service, I do not get paid, but the Web site will still collect your payment. Thank you for your kind understanding in this matter. If you have difficulties rating, then simply respond stating that you are having difficulties rating and thank me for my excellent, good, or ok service and we can get the rating applied by the site**
Expert:  Stephanie B. replied 1 year ago.

To assist in clearing this up, I contacted WA DoR to provide you with more information. I just spoke with Misty at WA Dept of Revenue and she states that the sale of puppies is subject to sales tax. She says the portion of legislation to look at is WAC 458-20-210 (which is the link that I gave you earlier). She says they are not excluded because they are considered pet animals and not excluded under agricultural products. The phone number I called is(NNN) NNN-NNNN It took a bit to get through the system but I hope this is of assistance to you.

I look forward to your response.

Stephanie

Stephanie B., Enrolled Agent
Category: Tax
Satisfied Customers: 555
Experience: MTax, EA, QuickBooks Proadvisor. Over 10 years accounting and tax experience specializing in individual and small business.
Stephanie B. and 5 other Tax Specialists are ready to help you
Customer: replied 1 year ago.

Thank you so much for your effort. I so appreciate that.


My situation is that I have been raising and selling puppies for years. It never occurred to me that I should pay sales tax and my tax person never mentioned it either. I know lots of dog breeders and none of them charge or pay sales tax.


Now I have a situation where a disgruntled customer is trying to make trouble for me and has reported me to the dept of revenue. So they sent me a letter asking for a bunch of information for 2011 and I am scared stiff. I don't know what to do and am afraid they are going to slap fines on me and make me pay all this sales tax. It would cause my business to go under.


I don't mind setting up the tax for the future but if we have to go backwards, I am going to be in trouble.


Thank you so much for your help.


Donna

Expert:  Megan C replied 1 year ago.
Yes, it is quite possible that the state will go back and assess sales tax and penalties for at least 2011, quite possibly further back than that. If you are required to collect sales tax and don't it usually won't end up pretty.

I would suggest getting a good CPA or tax attorney to assist you with this issue, to perhaps minimizing the impact on the department of revenue will have on your business. The CPA or tax attorney will be able to deal with them and won't be emotionally involved in the process.

In the meantime, I would start collecting sales tax on any puppies you sell from here on out.

** Please take a moment to rate my response as "Excellent" so that I may be compensated for assisting you today. Please let me know if my assistance was anything less than "OK Service", as I am compensated based on whether or not I have assisted you with your issue. If you need further clarifications, PLEASE WAIT TO RATE MY ANSWER UNTIL AFTER RECEIVING FOLLOW UP FROM ME. If I receive anything less than OK Service, I do not get paid, but the Web site will still collect your payment. Thank you for your kind understanding in this matter. If you have difficulties rating, then simply respond stating that you are having difficulties rating and thank me for my excellent, good, or ok service and we can get the rating applied by the site**

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