Doing business with USA member states

Has anyone here actually attempted to file their sales tax return yet?

Rachel Morris42 said:Hi everyone.
I have a quick question regarding this new form we're using. For some reason, my imports from outside the country are showing up on my Sales Tax return as both input tax and assessed tax. It looks like they're just canceling each other out, when in reality, that amount should be reducing my total Sales Tax liability.🤷
Is there perhaps another section where I need to enter specific details about imports?
We've already taken care of the import duties.

Maybe they shouldn't be getting wiped out entirely. I guess it would make more sense to just list them as a pre-tax deduction—at least through the end of October.
If you're working on Synesis, there’s an option tucked away in the F-10 parameters. If you just hit that little key icon and select "No Solution," then yeah... everything will turn out exactly how you want it to. I guess.

Ethan Mitchell4 Asks: Anyone tried filing their Sales Tax yet?

Just filed mine. It's done. (I only had the Sales Tax form—didn't need the acquisition or summary reports).

Ethan Mitchell4 said:Has anyone here actually attempted to file their sales tax return yet?

I’ve already submitted my Sales Tax, Sales Tax-S, and ZP filings.🙂

By the way, just a heads-up for anyone using Synesis: if you want the software to automatically pull the mid-market exchange rate from the Federal Reserve for your "Import Sales Tax" calculations, you absolutely have to use the exact currency code from the Federal Reserve's official list (USD, EUR, GBP, etc.) under the currency label.
I assume most of you savvy users have already figured this out, but I figured I'd put it out there just in case someone is struggling.🙂

Richard Howard55 said:Maybe they shouldn't be getting wiped out entirely. I guess it would make more sense to just list them as a pre-tax deduction—at least through the end of October.
If you're working on Synesis, there’s an option tucked away in the F-10 parameters. If you just hit that little key icon and select "No Solution," then yeah... everything will turn out exactly how you want it to. I guess.

Yeah, I am working in Synesis. So, it sounds like that's the one little tweak I need to make. Thanks for the help!

Drew Rogers6 said:Anyone got an answer?

Here is an excerpt from the IRS website:
Generally, when acquiring goods within the European Union, the price stated on the invoice is accepted unless there is evidence that the amount is incorrect. The tax base for acquiring goods within the European Union is determined in the same manner as for domestic deliveries of the same goods. The IRS will use available business documentation to conduct audits regarding the acquisition of goods from other member states of the European Union.

Regarding the exchange rate you should use, at a seminar hosted by the IRS, they told us to stick to Section 36 for all calculations involving foreign currencies. That rule states we use the Federal Reserve mid-market rate on the day the Sales Tax liability arises. They explained this is usually the date of delivery—which in most cases means the date on the shipping manifest, or the day the supplier actually hands over the goods, even if the shipment takes a few days to reach you.

I could use some assistance here. I just started working on my Sales Tax filings after downloading the latest version of Synesis, but naturally, I’m feeling a bit lost... Since I’m importing goods from the Czech Republic, I have to deal with the various import declarations, the calculated Sales Tax on imports, and the standard tax forms. Am I supposed to be pulling everything from those specific import forms to complete my main Sales Tax returns? Also, what should I do about the parameters? It’s asking for the representative's Sales Tax ID, which I don't have. I guess I'm wondering what people usually enter there? Whose ID is it actually looking for? One more thing—if someone could point me toward the correct account for customs liabilities, as well as the accounts for tax payable and the 5% input tax, I’d appreciate it. Thanks much.

Benjamin Palmer80 said:Here is an excerpt from the IRS website:
Generally, when acquiring goods within the European Union, the price stated on the invoice is accepted unless there is evidence that the amount is incorrect. The tax base for acquiring goods within the European Union is determined in the same manner as for domestic deliveries of the same goods. The IRS will use available business documentation to conduct audits regarding the acquisition of goods from other member states of the European Union.

Regarding the exchange rate you should use, at a seminar hosted by the IRS, they told us to stick to Section 36 for all calculations involving foreign currencies. That rule states we use the Federal Reserve mid-market rate on the day the Sales Tax liability arises. They explained this is usually the date of delivery—which in most cases means the date on the shipping manifest, or the day the supplier actually hands over the goods, even if the shipment takes a few days to reach you.

thanks 🙂

I’m not quite sure about this one, Richard Howard55, and I’ve actually run into a different little headache myself, so if anyone has some insight, I’d really appreciate the help....🙂
A taxpayer brought in some imports back in July (sourced from Italy), and the invoice doesn't include any sales tax—it just carries a specific tax exemption code for intra-community transfers. Everything would be perfectly fine if they had already been assigned a Tax ID at the time. However, they didn't actually receive their official registration from the IRS until August.
How should this invoice be recorded in the books and then reported on the sales tax return?

Thanks!

Richard Howard55 said:@Henry Edwards33
Give us a heads-up once you hear back from the IRS so we can finally close this thread (assuming they actually get back to you).

I will. If or when I hear anything at all. 🤣

If anyone knows... 🙂

🤷
What part is tripping you up? Drop the link so we can wrap our heads around it together. 😉

Jack Carter88 said:I’m not quite sure about this one, Richard Howard55, and I’ve actually run into a different little headache myself, so if anyone has some insight, I’d really appreciate the help....🙂
A taxpayer brought in some imports back in July (sourced from Italy), and the invoice doesn't include any sales tax—it just carries a specific tax exemption code for intra-community transfers. Everything would be perfectly fine if they had already been assigned a Tax ID at the time. However, they didn't actually receive their official registration from the IRS until August.
How should this invoice be recorded in the books and then reported on the sales tax return?

Thanks!

If they didn't have a Tax ID, they were supposed to pay the tax upfront. It wouldn't make sense to try and report it as a tax-free acquisition on the pdv-obrazac because, technically, you didn't have the legal standing to process it that way at the moment of the transaction.
Personally, I’d pick up the phone and talk to them to get the records synced up. You don't want a mismatch where the acquisition shows up on one side but not the other. I’d ask them to just issue a corrected invoice.

Thanks, Henry Edwards33!

Yes, that would be the only fair way to handle it. But I’m worried I won't have enough leverage to make it happen.

Richard Howard55 said:I was asking whether I actually need to request a VAT ID if I'm invoicing a service to Austria—especially since I'm not even registered for VAT myself (just a small business, under $76667).
One answer I found on the IRS website totally confused me, so I sent them an inquiry, but they haven't gotten back to me at all.

If anyone knows the deal, let me know... 🙂

You definitely need it if you're invoicing a business, but if you're billing a private citizen, you should probably check with their local IRS office to see if there are any obligations involved... check out item no. 18.

http://www.irs.gov/VAT/....07.2013.).pdf

Henry Edwards33 said:I will. If or when I hear anything at all. 🤣

If anyone knows... 🙂

🤷
What part is tripping you up? Drop the link so we can wrap our heads around it together. 😉

If they didn't have a Tax ID, they were supposed to pay the tax upfront. It wouldn't make sense to try and report it as a tax-free acquisition on the pdv-obrazac because, technically, you didn't have the legal standing to process it that way at the moment of the transaction.
Personally, I’d pick up the phone and talk to them to get the records synced up. You don't want a mismatch where the acquisition shows up on one side but not the other. I’d ask them to just issue a corrected invoice.

So, Carol Price4 found it and posted the link. Check response number 18.

My eyes nearly popped out of my head when I read that interpretation.

Apparently, an entrepreneur who isn't even registered for sales tax will still have to file a sales tax return and a summary report during the months they provide services within the USA.
Instead of just citing a specific code on the invoice, they'll have to write out the full text and the article explaining the exemption.

Isn't that bizarre? 😕

Richard Howard55 said:So, Carol Price4 found it and posted the link. Check response number 18.

My eyes nearly popped out of my head when I read that interpretation.

Apparently, an entrepreneur who isn't even registered for sales tax will still have to file a sales tax return and a summary report during the months they provide services within the USA.
Instead of just citing a specific code on the invoice, they'll have to write out the full text and the article explaining the exemption.

Isn't that bizarre? 😕

From what I gathered, you need to list both Section 90(2) and Section 17(1)—🤷
Section 17(1) covers the transfer of tax liability, while Section 90(2) handles the actual exemption.

Just look at that last sentence...

I was wondering if I need to account for sales tax on an incoming international invoice from an agency that handles international flight bookings. Specifically, the company paid for an airline ticket on behalf of one of our employees!

Carol Price4 said:From what I gathered, you need to list both Section 90(2) and Section 17(1)—🤷
Section 17(1) covers the transfer of tax liability, while Section 90(2) handles the actual exemption.

Just look at that last sentence...

Fine. Writing the text on an invoice is easy enough. But I wasn't suggesting it was weird; I was talking about the scenario where someone who isn't even in the VAT system ends up filing a VAT return and a consolidated report.

Richard Howard55 said:Fine. Writing the text on an invoice is easy enough. But I wasn't suggesting it was weird; I was talking about the scenario where someone who isn't even in the VAT system ends up filing a VAT return and a consolidated report.

They can probably just check if the business owner actually accounted for the sales tax... whereas here, it has to show up as an acquisition on our end.

I need some guidance here,
When filling out the sales tax return, whose information should I be entering under the taxpayer ID section? Should I use the entity's tax ID, or does it require the details of the responsible individual?
Thanks

Solid.

I am honestly feeling so confused about which exchange rate to use when I'm acquiring assets from the European Union.

I have recorded all the goods that arrived as asset acquisitions using the rate specified by INTRASTAT—which basically means taking the average rate from the first valid exchange rate list for that specific month (you know, the one found on the Federal Reserve website for converting currencies to dollars)
.
Since there can be a gap of up to 20 days between receiving the supplier's invoice and the actual physical arrival of the goods (because our local trucking companies don't exactly race down the highway 🙂), which exchange rate should I actually be using when filling out my sales tax returns?
I just went ahead and used the exact same rate I used for my initial calculations—am I totally messing this up?
If I am, will I need to go back and fix all my previous calculations too?

And honestly, the folks over at the IRS haven't been any help at all with this!🙂

I’m dealing with a headache involving a client who constantly shops at one specific big-box retailer—won't name names here, but you get the idea—buying directly from their retail stores.
The invoices go through $233, yet they're listed at full retail prices (meaning the unit price includes the sales tax).
How on earth would you guys handle these kinds of receipts???