Hey all,

 

(Apologies in advance, I know there's been a thread or two on this but couldn't find them, please merge if so desired :-)

 

I am in the process of getting sales tax exemptions as we're going to be doing a LOT more Lego buying this year and I'm tired of applying for refunds from the state. 

 

The online ones are pretty straightforward and I'm getting those all done, but can anyone tell me how it works for brick and mortar stores? Do I head to my nearest WalMart and apply there, or do I have to go through a corporate office? And if the former, will the exemption hold at all Walmarts, or do I have to apply at each one individually? Also, do they give you some sort of i.d. card to use at checkout, or???

 

(Same question for Target, TRU, KMart, etc.)

 

Thanks!

Best Buy has the best process, they issue a Plastic card with a barcode, so when checking out the employee can scan barcode at any point during the transaction and becomes tax free. They also have a link during online checkout which opens up a window where you Input the # from your card to make the purchase tax exempt. All retailers should follow their model.

Did you guys get the tax exemption under a LLC?

Did you guys get the tax exemption under a LLC?

 

No. In California you get them by registering with the State Board of Equalization (they are the sales tax authority in this state). They issue you a resale certificate, and you have to periodically file sales tax returns with them for taxes you collect from your in-state buyers.

Just got around to contacting TRU.com regarding sales tax exemptions. They don't set up accounts for exemptions in advance of purchases, like Amazon or Target will, but they do refund after the fact if you fax them your certificate.

 

Disclaimer: I have not yet tried this, so make no guarantees as to whether it's easy, a pain the butt, or, in spite of what CS tells me, impossible.

 

The meat of the response is:

At the present time, our online ordering system does not allow for the exemption of sales tax before the order is placed or during the ordering process.  However, we will be happy to refund the taxes paid on your order following receipt of your exemption certificate. Please fax a copy of your exemption certificate to 1-800-335-4720. Please be sure to note your order number on your fax, and address your fax to "Attention: Tax Exempt Inquiries Department" so that we can apply your credit accordingly. Refunds of sales tax may take up to ten business days, so we ask for your patience in advance.  Once the credit has been issued, you will receive an email notification that you should keep as a reference.

 

Now, my next question: Does anyone have a recommendation for online fax service? We don't have a landline and I don't want to travel to the local copy center and pay them for every sales tax refund I need from TRU!

I'd also be interested in anyone's experience with online fax services. I used to use Efax.com a long time ago.

I found this comparison: http://www.faxcompare.com/.

There's also zerofax.com which advertises up to 5 free faxes (3 pgs) per day.

I've used hellofax for these docs before.

Let's you draw a signature on the document as well which makes it easy and quick.

I used this today to send over my receipt and my sales tax permit to TRU.com via http://www.myfax.com/free/

Does toysrus.com give tax exemption now?

 

Edit: Never mind.  I read back.

Edited October 14, 201411 yr by Jackson

I used this today to send over my receipt and my sales tax permit to TRU.com via http://www.myfax.com/free/

 

I just did the same a day or two ago - TRU says up to 10 business days to see the refund, so we shall see!

I just did the same a day or two ago - TRU says up to 10 business days to see the refund, so we shall see!

Justafrog thanks for keeping us in loop. Let us know how it goes. This would be good and will save a lot of resource for us.

On that note, have you tried that in physical stores?

Justafrog thanks for keeping us in loop. Let us know how it goes. This would be good and will save a lot of resource for us.

On that note, have you tried that in physical stores?

Physical store is pretty straight fwd, just time consuming as they have to input your info every single time.

Btw I use nextivafax.com as a service. Never had an issue with them

Information on setting up sales tax exemption at Yoyo.com:

 

please email or fax your resale certificate to [email protected] or 1-888-466-1158. Include the email address associated with your account, or the customer number along with the resale certificate.

 

If there is a space to enter the seller/vendor's information, please complete with the following information.

 

 

YOYO.COM

10 Exchange Place

25th Floor

Jersey City, NJ 07302

 

Once this information is received, the tax exempt department will reach out to you for any additional information, or to advise the account is marked as tax exempt.  If the account is marked exempt from tax, all future orders will not include sales tax.

justafrog,

Did you get your TRU refund yet?

I faxed my first batch of 15 orders 8 days ago, haven't heard a peep from them.  Only 173 more orders to go....not counting the mess of orders November will undoubtedly create.

justafrog,

Did you get your TRU refund yet?

I faxed my first batch of 15 orders 8 days ago, haven't heard a peep from them.  Only 173 more orders to go....not counting the mess of orders November will undoubtedly create.

 

Nope, and yesterday was 10 business days, so I sent another message to CS, who told me to resend the fax. Did that just now, waiting another 10 business days until Nov. 12, and then I'll probably get excitable and start calling everyone including the U.S. Marines.

I finally got set up with Amazon for sales tax exemption. Does anyone have experience with getting the sales tax of prior orders refunded?

Yep - just submit the request with the previous order #'s.

they handled it within a week for me.

 

I am at a loss as to where to submit this. Is it via email?

Hey Guys,

     I have been reading over lots of things and spent time googling and much to my disappointment can't find any sort of answer on this question.

 

If I buy something (Lego/anything really) for resale using a Resale Certificate to someone in my State (nexus in which you do business), you charge them the Sales Tax of your area.  Alright cool, got that.

 

If I buy something for use using a Resale Certificate to someone out of my state what happens to the sales tax then?  Do you charge them?  Do you have to report your sale and you owe the Sales Tax back to your state so you work it into the price without calling it sales tax?

 

Any insight is appreciated.

You don't charge sales tax to buyers out of state. And if you refuse business to in-state buyers you won't have to deal with collecting sales tax at all.

So straight up I cold go to Walmart buy it 9.75% off (stupid high) and as long as I don't sell to someone in my state I'm good.

That explains to me how people make money selling masses at/near retail then. Not that I have the resources to move that kind of volume but still, might be worth looking into more.

As a sales tax accountant by day, technically if you sell a product to another state you do not have to collect sales tax. The purchaser however needs to be paying use tax on the product. No one does this really though except large corporations.

Yeah I did know the purchaser was supposed to and none of us did until amazon started charging sales tax pretty much.

I'm sure one day we will have a federal mandated tax on all online purcheses, but for now actually starting a small business looks like it has perks.

Amazon charges sales tax on the states they have nexus in, not use tax. Use tax is paid directly to the state by the purchaser and is not collected by the selling entity.

In regards to your last statement yes that is a nice perk. If you sell in state though you have to collect and remit. Your sales tax rate is one of the highest in the states.

As a bonus bit of info, if you pay more in sales tax than the amount you pay in state income tax, you don't have to pay state income tax. That's just in Georgia I think though. This is mostly for when you purchase a large item though, like a car (or a ton of Lego).

We have no state income tax here in TN, but that is interesting.

​You only have to pay for sales that you make in your own state.  For me, that amounts to a small fraction of the sales that I make each year and is well worth the hassle of collecting and remitting sales tax each quarter.

​But you still pay income tax on your profits though right? I never understand why I get charged sales tax from my state but when I ship it to another state I don't have to pay it. Is it better if I charge sales tax from customers in my same state? I only get like...1 customer in every 30 sales orders. Worth the hassle when it comes to tax season next year?

​But you still pay income tax on your profits though right? I never understand why I get charged sales tax from my state but when I ship it to another state I don't have to pay it. Is it better if I charge sales tax from customers in my same state? I only get like...1 customer in every 30 sales orders. Worth the hassle when it comes to tax season next year?

​You do still have to pay income tax on your profits.  The reason that you get charged sales tax from your state, but not another, boils down to a legal principle called personal jurisdiction.  By living in your state, you establish a sufficient "nexus" between you and that state for the state government to have personal jurisdiction over you and your commercial activities.  That nexus and that personal jurisdiction gives the state the ability to impose tax obligations on you consistent with the due process clauses in the US Constitution.  When you ship an item to another state, that is an act that is not deemed to have enough jurisdictional gravity to establish a nexus between you and that other state for jurisdictional purposes.  As a result, you couldn't be sued in that state and, more importantly for present purposes, you can't be taxed by that state.  Now, if you opened a store in that state and began operating your business there as well, that would establish the nexus needed for that state to exercise jurisdiction and impose the legal obligation to collect and remit sales tax on you.   

If you only have a physical location in one state and rarely ship items to that state, it would probably be worth it to go tax exempt.  That's what I did and I've saved a fortune.  It's even better if you live in a state that will refund the sales tax that you pay on a non-exempt transaction because you don't have to go through the hassle of having the retailer enter your exemption information.  I don't live in one of those states and am not sure how many there are out there.