Do I need a reseller permit if I use SmugMug?

dooderose

As a new business owner, I'm totally overwhelmed with tax requirements, especially with the complicated laws in Washington state. Reading over the basic tax registration information that came with my license, I came across reseller permits. There is an option to apply in order to " allow businesses to make qualifying purchases for resale without paying tax".

I have no idea if this applies to me, but it made me think about SmugMug and the fact that I've never seen sales tax on my own orders. If I have the option to apply sales tax to a client's order, then shouldn't I be taxed for my orders too?

I'm somewhat new to SmugMug as well, and haven't sold anything to my clients through the site. If I decide to purchase something and then give it to a client, am I not reselling it? If so, then I'm already purchasing something without paying sales tax, and I wouldn't have to apply for this permit.

Maybe this is a long explanation showing my ignorance about taxes in general, but I'm trying to explain my current understanding to whoever reads this... Clearly, I don't understand much yet, so go easy!

I'll use one of these fun icons to express my gratitude in advance to anyone who can sort me out... :bow

Angelo

as a business owner it's always good practice to have a seller's permit but as it applies to Smugmug it's a non-issue if your clients are purchasing off the site because you are not considered the seller.

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ca-ching

use/sales taxes
Hi Angelo, my business partner and i are also new to the use of smugmug. I already took two sales/use tax classes and I am still not sure how taxing works thru smugmug. So, if we/our company (who is based in CO, and which posts the photos on smugmug) is not considered to be the seller, how much sales/use tax do we need to apply to a customer who has photos or other tangible items shipped to let's say Florida. If smugmug is considered the seller in CA, a shipment to FL should should be considered a "drop shipment" and the recipient should be charged local FL use taxes. Please correct me if I am wrong! If I am NOT wrong, that would require that every order on smugmug needs to have its own local use taxes calculated. But that is not an option that exists in the current smugmug tax calculation setup. I am about ready to bang my head in the wall over this issue...Please help me!

dooderose

Angelo wrote: »

as a business owner it's always good practice to have a seller's permit but as it applies to Smugmug it's a non-issue if your clients are purchasing off the site because you are not considered the seller.

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Angelo, isn't it still an issue if my clients are NOT buying off the site? That's where I'm confused, because what if I buy something and then sell it to my client?

Angelo

ca-ching wrote: »

...So, if we/our company (who is based in CO, and which posts the photos on smugmug) is not considered to be the seller, how much sales/use tax do we need to apply...

If you're not the seller why be concerned about the sales tax? It will be handled as part of the smugmug transaction no differently than someone ordering a book from Amazon.




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Angelo

dooderose wrote: »

Angelo, isn't it still an issue if my clients are NOT buying off the site? That's where I'm confused, because what if I buy something and then sell it to my client?

well yes in that scenario you ARE the seller.

this isn't really confusing. it's a "follow the money" rule. whoever is actually selling the tangible property must collect sales tax.

might help to think of this the same as an artist / gallery relationship in which the artist simply creates and the gallery owner takes care of all the pesky money trading business.
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Angelo

edit: I just reviewed the sales tax panel on SM. I need to delve into this a bit... hold on...

Andy

Hi Guys - we can't and don't give tax advice, that's to be done between you and your tax advisor. We do have the option on SmugMug where you can tell us to collect additional taxes on your behalf. All the details are here: http://www.smugmug.com/help/photo-sales-tax Thanks!

Dan7312

There were a couple of threads a while back that noted that some states have clauses in the tax laws with respect to photographers which leave the phographer responsible for sales taxes for online sales where sellers of other kinds of products might not be. You really should check with an accountant/lawyer to see what your responsiblities are in your state.

Angelo wrote: »

edit: I just reviewed the sales tax panel on SM. I need to delve into this a bit... hold on...

Angelo

Thanks Andy

Dood - the best I can make of this is you should confer with your taxing authority, explaining that print sales are handled by a third party reseller based in California and let them advise you if you're still responsible for sales tax collection. If so, refer to Andy's post and set your site up appropriately. Good luck



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dooderose

Thanks everyone! I'm glad it's not just me that can't make sense of this.