Sales Tax Rules
What is sales tax?Sales tax is tax that is paid to the state and or local tax authority by an entity for the sale of services and goods. It is often the case that the law requires the entity to collect the tax funds from their customers when they purchase said goods or services. The tax laws may allow the seller to have the tax itemized separately from the price of the goods and services, or it may be allowed to be included in the price of the goods or service. The tax laws may also provide that certain goods and services are exempt from sales tax.
Why can’t a seller buy a product and sell it to a customer without charging sales tax?The reason that a seller cannot sell a product to a customer without charging sales tax is because no sales tax has been paid upon the item. The seller most commonly buys the product from a wholesaler, paying no sales tax on the item. For the sales tax law to be satisfied the seller must charge the customer sales tax on the item, so that sales tax has been paid. This is not true of all products; there are some products that are sales tax exempt.
Is sales tax applied to a vehicle lease in the state of Virginia?It is important to note that in the state of Virginia the lessor does not have to be licensed, and is also known as the leasing company. The vehicle that is being leased is titled in the name of the lessor not in the name of the lease, and all fees that are applicable and are due at the time the vehicle is leased by the lessor. It is important to note that lease agreement may make the requirement that the lessee pay these fees. Also after the lease is terminated, if the lessee retains the vehicle, then it will need to be re-titled in the lessee’s name. If the lessee was the one that paid the fees then they will be exempt from paying them again.
In the state of Pennsylvania if a contractor is buying building materials for a educational facility, are the building materials sales tax free?In Pennsylvania the purchase of building materials by a construction contractor for use in the building of a government agency or a charity that is purely public, or a tax-exempt organization. For the supplies to be exempt of sales tax then the contractor will need to give the supplier an exemption certificate.
Sales tax is the tax that is imposed upon the purchase of goods and services. The reasoning behind entities charging sale tax to its consumers is that the sales tax law must be satisfied and if an entity buys their products from a wholesaler, then there is no sales tax paid. If any individual has any questions regarding sales tax rules they are able to ask the Experts.