Any entity or person, who performs a sale of a tangible product, should register and file for Sales Tax. For example, if you sell taxable items at a craft fair only once a year, you are required to register, collect, and remit sales tax. However, if you open an office and provide accounting, you are not required to register for sales tax purposes because the services you will be providing are not subject to sales tax. If you are a vendor and you are selling taxable goods and services, then you must register with the state whether you operate from a store or sell goods or services from your home, over the Internet, from a cart, or even at a craft fair. You must file sales tax if you are selling a tangible asset and meet any of the following conditions:
- You own a place of business in the state, such as a convenient store, office, or warehouse, and sell taxable, tangible personal property or services to persons within the state; or
- You solicit business in California State through employees, independent contractors, agents, or other representatives, and through these persons, sell taxable, tangible personal property or services in California State; or
- You solicit business through catalogs or other advertising material, and have some additional connection with the state, and through the catalogs you sell taxable, tangible personal property or services.
Define Tangible Personal Property:
To put it in simple terms, it is anything that you can see and touch. Below are few examples of tangible personal property:
- Raw materials (for example, wood, cloth, or metal);
- Manufactured items such as jewelry, clothing, furniture, machinery, and appliances;
- Motor vehicles, gasoline, oil, and chemicals;
- Computers and prewritten computer software (canned or off-the-shelf);
- Artistic items such as paintings, sculptures, photographs, and craft items;
- Animals, trees, shrubs, and flowers; and
- Certain grocery store items such as soda, beer, candy, and bottled water.
Payments and Filing Dates:
Filing dates for sale tax payments and reports is different for each person or entity. The Board of Equalization determines which bracket you fall into and ask you to file according to that bracket.
TGG Accounting helps many businesses file their sales tax returns. Handling this process effectively is a critical component to ensuring success in a business. The penalties for non-compliance can be severe. Contact us today for an evaluation of your current situation. We can help get this in order.Written by: Adriat Markos TGG Accounting