Resale Number Permit

[rubenshub]

Hello eBay world!

I wasn't sure if I'm suppose to post this in the seller or buyer section but I do hope it finds the right audience.

I currently purchase large amounts of motorcycle parts from across the world (and US) and have them shipped to a warehouse in NY state.

With the new internet tax law in place, as a buyer I have to pay taxes in (NY state) on items that are shipped to the warehouse (which is 8% if memory serves me correctly).

But as a seller most items are refurbished and resold and shipped from the NY warehouse.

But as a reseller of items we're entitled (by NY state law) to a tax exemption of items purchased online and shipped to NY. 

So my question is as a Canadian reseller, how do I apply for this tax exemption? Do I need to have a registered business number in NY and/or Canada to apply?

[ypdc_dennis]

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@rubenshub wrote:

I currently purchase large amounts of motorcycle parts from across the world (and US) and have them shipped to a warehouse in NY state. With the new internet tax law in place, as a buyer I have to pay taxes in (NY state) on items that are shipped to the warehouse.

But as a seller most items are refurbished and resold and shipped from the NY warehouse. But as a reseller of items we're entitled (by NY state law) to a tax exemption of items purchased online and shipped to NY. 

So my question is as a Canadian reseller, how do I apply for this tax exemption?

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Since New York is your place of business, you need to deal with them.

https://www.tax.ny.gov/bus/default.htm

https://www.tax.ny.gov/pubs_and_bulls/tg_bulletins/st/do_i_need_to_register_for_sales_tax.htm

At the moment, you need to keep track of all sales tax paid, and then ask for a tax refund from New York state.  I do hope you have been filing state tax forms, audits are not fun.

-..-

[ichopshop · Accepted solution]

If you're fully above board with your operations in NY State then it should be a matter of applying for a tax certificate...

If you're not, then you're just going to eat the 8%

Ian

[tyler@ebay]

Hi @rubenshub - if you are a tax-exempt buyer you can go through this process to remove taxes charged to you on your eBay purchases. Thanks!

[rubenshub]

When you say above board what is the minimum annual income in order to qualify as a legitimate business in NY? I know in Canada its above 30,000 but not sure in NY.

[rubenshub]

Hi Tyler, I've only started this online store a few months ago and i've read through the process... it appears that I would need some certificate vendor number in order to complete this form. Can someone demystify this?

[tyler@ebay]

Hi @rubenshub - it looks like for New York state we recommend New York ST-120 Form
& Sales Tax Cert of Authority, which I am confident you could contact the New York state tax authority regarding. 

Unfortunately, I'm limited in what I can discuss,  as I am not a tax expert and can't give anything resembling advice, but I'd suggest contacting the a tax professional to see how to go about getting those forms!

[reallynicestamps]

The $30,000 has nothing to do with the legitimacy of a business.

It's the amount of sales (domestic and international) an Ontario resident has to have before he is required to register to collect sales taxes.

He can register before that if he wants.

Income taxes are due on any profits from an item that was purchased for resale.

So no tax due from garage sales that are clearing out the basement, but  if you are buying at the thrift store and reselling on eBay, you have to declare your profits as income.

There are small hobby businesses that never hit the $30,000 annual de minimus lever, but the operator declares and pays income tax on her $1000 profit.

Let's not get into municipal business licensing or for that matter commercial insurance for small businesses.

[ypdc_dennis]

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@rubenshub wrote:
When you say above board what is the minimum annual income in order to qualify as a legitimate business in NY? I know in Canada its above 30,000 but not sure in NY.

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A legit business income can be anything over $0.  The $30,000 in sales over 12 months is the point where you are required to register for GST/HST in Canada.

[recped · Accepted solution]

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@rubenshub wrote:
Hi Tyler, I've only started this online store a few months ago and i've read through the process... it appears that I would need some certificate vendor number in order to complete this form. Can someone demystify this?

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Here's a link to the proper form for NY:

https://www.tax.ny.gov/pubs_and_bulls/tg_bulletins/st/exemption_certificates_for_sales_tax.htm

It is NOT the ST-120 Tyler referred to, pretty sure that's the form number for a different State! The correct one is ST-240 (linked above).

Note: As far as I know you have to be registered in NY first to obtain a reseller permit because you need a Vendor number to complete the exemption form, you can find the application and instructions here:

https://www.tax.ny.gov/pubs_and_bulls/tg_bulletins/st/how_to_register_for_nys_sales_tax.htm

You can get general information about registering here:

https://www.tax.ny.gov/pdf/publications/multi/pub20.pdf

And here:

https://www.tax.ny.gov/pdf/publications/sales/pub750.pdf

[reallynicestamps]

BTW, since your business is resident in NY state, even if you are not, you do have state Representatives.

If you run into problems, phone the office of your local state rep. (senator? I am vague on what they are called) the more local the better.

You don't need the rep herself, there is probably a staffer who helps with these all the time.

[recped]

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@reallynicestamps wrote:

BTW, since your business is resident in NY state, even if you are not, you do have state Representatives.

If you run into problems, phone the office of your local state rep. (senator? I am vague on what they are called) the more local the better.

You don't need the rep herself, there is probably a staffer who helps with these all the time.

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I don't think the OP is a US resident, more likely they just have a mail drop there. The sales tax is on the shipping destination not the buyer location.