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Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 3184
Experience:  18+ years of experience in tax preparation; 25+ years of experience as a real estate/corporate paralegal.
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New york state based LLC distributed socks product as

Customer Question

New york state based LLC distributed socks product as samples in New York State, but did not collect any sales tax. Per my knowledge, in this case LLC is responsible to pay sales tax on sample products distributed. What form do I use, ST100 or there is any other specific form to use for Sample products? Also, since I did not collect sales tax while distribution sample products, can I deduct sales tax to be remitted to NYS on my business schedule C of 1040?
Submitted: 1 year ago.
Category: Tax
Expert:  CGCPA replied 1 year ago.

Free samples intended only for distribution as free samples are not subject to tax in NY. However, if they have a price on them which is then discounted to become a sample the tax will be due on the original retail value. The return to be filed is form ST-100 and its Schedule H. The quarter has recently ended and the return is due on the 21st (due one day later than the usual 20th because of a weekend). The quarters are Sept - Nov, Dec - Feb, March - May, and June - Aug with the returns being due 20 days after the quarter ends. While you can file the first return by mail you will thereafter be required to file electronically.

Customer: replied 1 year ago.

Thank you.

2 things:

1. However, if they have a price on them which is then discounted to become a sample the tax will be due on the original retail value. - DO YOU HAVE REFERENCE FOR THIS?

or maybe it should be USE tax to pay for distributing samples? If yes, what form to use? Is it deductible on business schedule C of 1040?

2. You did not answer this part of my question - "Also, since I did not collect sales tax while distribution sample products, can I deduct sales tax to be remitted to NYS on my business schedule C of 1040 as this is an expense for me?"

Expert:  Barbara replied 1 year ago.

Different expert here - my name is ***** ***** please allow me to provide you with additional information you will find helpful.

Clothing, footwear, and items used to make or repair exempt clothing sold for less than $110 per item or pair are exempt from the New York State sales tax. It does not matter if they are provided to potential customers as samples or not.

https://www.tax.ny.gov/pubs_and_bulls/tg_bulletins/st/clothing_chart.htm

You cannot deduct sales tax on Schedule C of your 1040 if you did not pay it.

Please let me know if you require further information or clarification.

Thank you and best regards,

Barb

Expert:  Barbara replied 1 year ago.

Just following up with you to see if you have any other questions. If so, please come back to me here at your convenience, and I will be happy to assist you. If not, please take a moment to rate my answer since that is the only way I receive credit for answering you and alerts Just Answer to compensate me for a portion of the fee you previously paid.

Best regards,

Barb