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Since it's sales tax time I'm trying to figure out about charging or being charged sales tax on raw gourds....it seems like I have never paid tax on raw gourds weather they are bought locally or from out of state.....when I've asked some folks they have said you don't pay sales tax on raw gourds. I can't find any "tax law" that tells me one way or the other. Does any one know the real answer to to this question or where can I find the answer. I'm not looking for a legal go to court type answer. Can anyone point me in the right direction....I haven't seen this question asked on the discussion anywhere else. Thanks for any help.
The farms I buy from all charge sales tax. In California, if you can't eat it or drink it, you pay tax on it. Here's all your questions answered, Ms Darla:
Thanks Vickie, Seems like most of the folks I've contacted are now saying they include the sales tax in the price, yet it's not stated that way or I haven't listened. I've just paid the sales taxes from my own pocket on the over all sales totals I've made using the country and city tax rates that apply from where ever I've sold any. I'm now heading to the link you listed:-) Hay, I checked the site and I have been paying my taxes correctly:-) Good site for Texas.
Miss Darla, the law says that you have to have it posted if taxes are included in the sale price. Then, when you send in the taxes you have to figure what the retail prices were. If you remember algebra, it's easy to do. As for collecting taxes on raw gourds, it looks like you do in Texas.
Hay Judy, You are right about the posting or it should be one the receipt statement....I remember algebra very well....I HATED IT:-) I just wanted to have this clear as a bell in my head and to be sure if or when I buy or sell a raw I have the facts correct. And to have the correct information posted for any show which I might do.....since I usually only do the Gourd Festival once a year I'm not that worldly. I will know what is right now. The link Vickie posted was a great answer place.
In California raw gourds are considered a vegetable and are not taxed. They become taxable once you cut, drill or decorate the gourds. ;)
I never remembered my algebra - but found out that if you divide the sales price by your local sales tax rate you come up with the correct amount. For example: Sales price $25. To figure tax, if the tax rate is 7.1%, you'd divide by 1.071, which gives an amount of 23.34. The residual (1.66) would be the sales tax. If your sales tax was 8.6, you'd divide by 1.086, and so on depending on the rate.
Every state is probably diffrent about what is taxable. It's best to check your own state laws, you might actually have to send an email or call for a specific question such as this. And my guess would be you'd probably get different answers depending on which person you talk to!
You are right Bonnie. You just skipped right past the equation. X + .086X = 25.
X being the retail price. LOL I still remember a lot about Algebra. It was one of my favorite subjects and I still use it pretty often figuring out things. I use that and Geometry, my other favorite class.
I have also heard that gourds are a farm product so they are not taxed until you do something with them....not produce but a product....could be called an agricultural product also I guess. I will be asking our CPA to see if he has a different answer......if corn is sold for livestock to eat it's not taxed....is it taxed if it's turned into gas? I'm going to pay sales tax on any raw gourd I sell until I see it in writing telling me I don't have to. Now, I'll really have to whip my self to use a formula or algebra....my favorite class was day dreaming.
First off I am moving your post to "General Questions"
2nd, you might want to check the IRS's website, if I remember correctly you only have to pay sales tax if you make more than $9000 a year selling your wares.
Also, depending on who and where you are sending something some places don't get charged a sales tax.