posted on April 15, 2001 09:56:54 PM new
I routinely buy mechandise on sale at the Gap to resell on eBay. I have a state Tax Permit that allows me to purchase merchandise for resell without having to pay sales tax. However, when I have tried in the past (3 or 4 times at different stores) to use my tax permit at the Gap, they have told me that they do not allow for reselling of their items, so they would not allow me to purchase items tax free. First question: Can they do that? Is it within their jurisdiction to dictate what I do with the merchandise I pay for? Second: If there is no way around paying the tax on the items, can I claim a deduction for the tax, since, it seems, I shouldn't have to pay it in the first place since I am reselling the merchandise? Your help is greatly appreciated.
posted on April 15, 2001 10:07:33 PM new
candi, i only know the California sales tax form, and if I recall correctly, there is a place on it for something like 'tax paid on items that were later resold' which would cover your situation. but each state has a different form.
You might want to call Gap HQ and ask for their policy. I'm 99 percent sure the average mall worker would not have any idea what you were talking about and might very well think you were trying to pull a scam to get out of the sales tax. so talk to the head honchos & then talk to a sales manager referencing your conversation with HQ.
i believe that once you have purchased the item they cannot dictate what you do with it, but that doesn't necessarily mean you can not pay them the tax. IMO it would be easier to take it off your sales tax form at the end of the year.
posted on April 16, 2001 01:53:01 AM new
In Texas, it's up to the discretion of each store whether to accept a buyer's resale certificate and waive the sales tax on a purchase. Local Goodwill and Salvation Army stores all allow tax exemption for resellers, but some of the independent thrift stores here don't.
I just include the sales tax I pay in my cost basis of the item. It all comes out the same, whether you pay the tax and show less profit or get the tax refunded to you and show more profit (on which you pay federal income tax).
posted on April 16, 2001 02:34:13 AM new
The worst case is that you can deduct the sales tax as part of the cost for obtaining the item. But, this is clearly not as good as not having to pay the tax.
Why not give your local sales tax office a call and see if there is any place on your sales tax remittance form to get a credit for sales tax on items purchased with the intent of resale.
posted on April 16, 2001 07:14:15 AM new
In Louisiana, you must still pay the STATE sales tax when you purchase the item. When your file your monthly/quarterly reposts to pay the sales taxes yoy collected, you deduct the amount you have already paid (on purchases.)
posted on April 16, 2001 08:18:21 AM new
In California you are required to accept a seelers certificate and not charge tax. BUT you are also permitted to prohibit sales to resellers.
BTW you are a fool if you think you are getting good prices by doing that.
These clothes are made by Chinese prisoners, for example a pair of Jeans cost GAP less than $1. I have a liquidator who sells me GAP and other name brand clothing for an average of $3 per piece. (And, no I'm not going to tell you who it is)
posted on April 16, 2001 09:02:45 AM new
Unknown, a fool is a person that buys merchandise that they cannot resell to make money. If you bought jeans at $3 that sell for $2, you are the fool. On the other hand, with 1750 positive feedbacks, I think I know what I am doing. I might spend $6.99 on 100 sweaters, but I've done my market research to the extent that I can sell them for $20 each.
posted on April 16, 2001 11:25:08 AM new
Just forget about avoiding paying the tax, just include it in your cost basis. Adding it to the sale price and transportation/shipping costs will give you the real cost of goods sold...
posted on April 16, 2001 07:35:43 PM new
Candibates: I'm sorry for refering to you as a fool. That was out of line.
[ edited by unknown on Apr 16, 2001 07:54 PM ]
