Sales Tax Question (1 Viewer)

[Vince Maskeeper]

If I sell a used item to a friend, am I required to charge him sales tax on the transaction?

How about if I sell a "new" item, and I am not specifically a vendor, but rather it is a private sale- am I required to charge sales tax?

-Vince

 

[Thik Nongyow]

No. Since you do not represent a vendor, you are not required to charge your friend a sales tax.

 

[Vince Maskeeper]

So, you have to be a vendor, like a dealer to charge sales tax?

 

[MikeAlletto]

Hehehe...if some friend sold me something and charged me tax I'd probably punch him

 

[KDHM]

Sales tax is decided state to state. So what the official rule in Ohio is may not be the same in other states, this is why online stores do not collect tax on out of state sales, In NY the official rule is that anything bought out of state without tax you are suppose to fill out a form at the end of the year and pay the state tax.
kd

 

[ken thompson]

The purchaser is responsible for the sales tax when buying a used item. similar to buying a used car from an individual when they go to register it at the DMV sales tax is charged to them at that time. If someone wants go strictly by the letter of the law they must report the purchase to the department of revenue. Obviously no one does though.

 

[Mark Zimmer]

Most states have an exception from sales tax for "occasional sales." So in such states, if you have a garage sale once a year, no sales tax need be charged or collected. If you sell something to a friend once in a while, same thing.

HOWEVER, the typical rule also is that if you are already a sales tax collecting vendor, you can never have an "occasional sale." So the guy owning the DVD shop (personally, not through a corporation) should be collecting sales taxes on his garage sales too.

HOWEVER again, there are also exceptions to the general rule. For instance, in Wisconsin there is no "occasional sale" exception for cars, so if you sell your car to your buddy he's hit with the sales tax when he goes to license it.

Although I work for the Wisconsin Department of Revenue, this is not an official statement of the Department nor is it legal advice. If you have such a situation contact an attorney in your jurisdiction.