Sales taxes

PA Sales tax is to be collected on all items, even cash items.  Apparently cash sales have limited records.  6% state wide, 7% in the two larger metropolitan areas, Philly and Pittsburgh.  Each vendor should have a state sales tax number and authorization to collect and forward the sales tax to the state. 

Those claiming PA residence, would have Sales tax documentation. Problem is out of state vendors that are not authorized, but still obligated to collect PA Sales Tax.  Same applied on a greater scale via internet sales.

At one time there was discussion of State Sales Tax auditors/police of sorts, present at the York event.

Hopefully Allan or Rich will chime in. Both were familiar with the process, OGR being a vendor, Orange Hall.   

How do you know they are not?

Or the vendors are just eating the sales taxes on cash sales.

As I said, I'm not familiar with PA sales tax law, but in some other states, the tax law states that the tax must be stated separately and is not to be included in the price.

I hate to carry lots of cash, but 6% is 6%.

Here in NY, I see lots of tables with signs stating that prices include sales tax.

Generally speaking, vendors should be collecting sales tax on all sales at York.  Usually, sales paid via cash and personal check get a slightly better deal in that vendors will add 6% sales tax directly on sales paid via credit card.  Most likely because they lose a bit on those sales anyway (i.e., merchant fees) -- not to mention the more definitive "electronic/paper trail" on the transaction.

Beyond credit card sales, I suspect vendors treat their sales tax reporting on cash sales much like wait-staff need to factor their tips into total wages reported for the year.  It's unlikely never gonna be $0, but do they report ALL of it?  Perhaps yes... perhaps no.  But they report an amount that doesn't generate any red-flags with the taxing authorities.

David

I would say that this strictly is a matter between the seller and the State of Pennsylvania. Unless someone has proof that there are irregularities and is desirous of serving as a whistle blower. I am not sure what is served by the Forum members' input on this one who typically have nothing to do with collecting and reporting sales taxes at the York Meet. 

I'm in 100% agreement.

PTC, I don't think anyone here was inferring irregularties, whistle-blowing, or what-not.  It's nobody's business here. 

Rather the OP asked why vendors don't charge sales on cash sales... which may be somewhat a mis-statement in its own right.  And that's what most posts thus far were addressing.

The fine line here is that vendors don't CHARGE sales tax.  They COLLECT it and then pay the tax to the taxing authority.  So although cash sales don't often involve invoices detailing sales tax at York -- heck, some transactions don't even have an invoice -- that doesn't imply the vendor isn't paying a tax on those sales at the end of the meet.  Many of the larger vendors I've purchased from at York keep tabs of their cash sales on a tablet, cash register, or whatever... so it's pretty much straight-forward to calculate whatever amount they need to report as "sales tax" at the end of the meet.

The OP's question was valid... just slightly mis-stated.

David

I thought I had read here on the forum many times that there was some kind of special sales tax exempt agreement for the York shows? Thought that was a reason for making it a TCA members only event? Or does this just apply to individuals selling at York and not actual businesses selling things there?

Also, do out of state businesses like Trainworld, Nassau Hobby, Charles Ro etc. have to collect and pay the PA sales tax as well, even though they are not from out of state? 

Yes... it's my understanding that all the hoopla about not opening the meet to the public is somehow related to TCA members selling their wares to other TCA members and being exempt from PA sales tax for the York meet. 

Entities that "make a living selling trains" still need to pay the tax though -- including out of state vendors.  That's true not just for York, but of industry shows, craft shows, etc... in general, since the sale AND delivery of the item takes place in that state.   And that's not a PA restriction either.  Lots of states have this requirement.  So if you're a business selling at a craft show in State ABC even for a day/weekend, you may need to apply for a sales tax license in that state and then report/remit sales tax returns on an ongoing basis even if you have $0 sales for that period.  Small businesses get saddled with this requirement all the time, but it's part of life when businesses attend shows "on the road" throughout the year.

Generally speaking, sales tax is NOT collected when a vendor ships the goods to a buyer residing outside the state where the purchase is made.  But technically speaking, the buyer should be paying the sales tax -- in the form of a "use tax" -- to the buyer's state of residence at the end of the year.  Individuals seldom do this, but states keep close tabs on businesses making out-of-state purchases, since the businesses need to report/remit "use tax" whenever they report/remit "sales tax" -- which is usually monthly (or quarterly for smaller businesses).  And if businesses report $0 "use tax" for too many reporting periods, that sets off a red-flag.  They can do it, they just need to validate/prove their purchase records if the state inquires.

David

 "It's nobody's business here."

David, I agree with your statement. It says it all.

One misconception that most people have about sales taxes is that sellers must collect sales taxes from buyers.  This incorrect.  Sellers must pay sales tax on their sales.  The law allows sellers to collect sales taxes from buyers but sellers are not required to collect this tax.  Most sellers collect sales taxes because they do not want to reduce their profits by whatever the tax rate happens to be.

There is a major hardware store chain here in CA that routinely has: "We pay the sales tax sales."  When you buy something from this store during the sale period the price you see is the price you pay.  The store is basically giving buyers a 10% off sale.

I sell trains at trains shows here in CA.  I only take cash or checks.  I never charge customers sales tax but I always keep track of my total sales and pay the tax at the end of the year.  This keeps both my customers and the state tax board happy.  It costs me about 10% of my sales because the tax rate throughout the state is about 10%.  You guys in PA are lucky to have a 7% rate.

Joe

Joe, don't wish the extra 1% on the whole state just yet!!!  For now, at least, the PA Sales Tax is 6%, except for Philadelphia and Allegheney counties (i.e., basically Philadelphia and Pittsburgh, respectively) where they grab an extra 1% on the transaction.

David

My post should have said 'even though they ARE from out of state' instead of 'are not', but you got it anyway. My typing is getting worse by the day and so are my composition abilities...   Thanks for the clarification, in spite of all that.

Our sales taxes here are fast approaching 9%, I think it's at 8.75% or 8.875% now. However, that is not all state tax, some are local/city taxes. All the cities around here in the metropolitan area are about the same though, give or take maybe 1/8% or so. As Joe Barker says above, my LHS gives me about a 10% discount so basically they are paying the sales tax for me and I get about a 1% or so discount.

Joe, some states do require sellers to collect the tax.  Sales tax laws do vary.

PassTrn Coll, you are dead wrong.  What a seller charges me is between seller and me.

I add another thought.  If a seller takes advantage of a loophole in the tax law, that's fine.  But if the seller is finagling his books to avoid collecting and transmitting the tax, then that indicates that he/she lacks integrity and why should I assume that that seller will deal with me, who has far less power than the state, with integrity?

Dave, thanks for that clarification... my bad!!!     It happened in 2009 no less, and they still can't make any ends meet in the city.  So I suspect we won't see the "temporary" increase rescinded anytime soon. 

Shows ya how often I've purchased anything inside the city limits that this happened 5+ years ago!!!  

David

In theory, on cash transactions, the seller should be submitting an appropriate portion of the sale to the PA Dept. of Revenue.  We are just not getting to see the pre-tax price (assuming the vendor is honest in this regard, and since I'm told that tax agents do occasionally visit and check, I would imagine that most are honest in this regard).

For example if you pay $1000 cash for an engine, and a 6% sales tax rate, the seller is supposed to submit $56.61 to the state in taxes (making the pre-tax sale price $943.39).

In other words, the vendor is doing the math later.

Andy

I thought the reason that the meet was only for members was to get around having to have everyone pay sales tax? Is that only in the member halls?

"Is that only in the member halls?"

Yes.

In order to get a booth in the orange hall, we must provide our PA sales tax vendor id to the eastern division TCA officials. Obviously, for those of us not from PA we have to register with the secretary of state's office in PA, and file a return. 

I hate the IRS with a passion... I'm just starting to realize how much money goes into taxes! Its crazy!

I am of the opinion that the morass of tax laws is the reason manufacturing and sales

have been run out of the country, and certainly several states.  Per Mr. McMuffin, if you are in California and you want a booth at York selling your new line of .....uh, period boxcar models, and three rail trucks....you first have to find the right office in the right town in Pa., and call them up and ask for a form, and dealing with govt. bureaucracy, after playing phone tag finding the right office, right person,  get it sent to you (better do this months ahead), and then submit it to TCA?   And then wait to see if there is even booth space available?  We are lucky so many providers have

gone over the barbed wire to set up and offer their goods to us at York!

We discuss this a lot at the club since most of our purchases seem to be coming from our Internet connections back east. Technically, if a resident of the People's Republic of California makes an out-of-state purchase, he/she/it is required to pay a "use tax" which by some remarkable coincidence is exactly the same as the sales tax. It's on the honor system and I'm sure there's near 100% compliance. On-line retailers with a "physical presence" within the state (warehouse, distribution enter, retail outlet, etc.) collect the sales tax. I like that Amazon opened a distribution center in San Bernardino, but now they collect sales tax, depriving me of the fun of calculating my use tax amounts.

congratulation, you all have now passed the tax portion of the CPA examine.

Just in case anyone is feeling guilty bout not paying enough tax, feel free to send me a check or cash equivalent to 1% of your transactions and I promise complete absolution.  See, isn't that easy?  

Farmerbill.org a 501c(3) charitable fund

LOL