Doing business with USA member states

Jeremy Anderson63 said:We're talking about advertising services here. There isn't any special exemption for those under US tax laws.

So, yeah... you'll need to register for a sales tax permit and get an ID number.

Then you have to calculate the tax and pay it up. You don't get to claim any input tax credits on this.

Honestly, you should have been doing this since back in 2013...

That is exactly what I'm dealing with right now—except it's a small business owner. When they brought in the paperwork, I told them to go grab a sales tax ID immediately. Well, I sent over the calculated tax today, but the filing won't clear because they didn't have an active ID for the last seven months—even though it's valid as of today... that's why I was asking earlier if anyone had run into this exact mess...

ruggednomad5 said:I need some help here... I was just at the IRS office and the manager told me to file an amended sales tax return for July 2013, but then she admitted she isn't actually sure how to handle it... Basically, I reported one acquisition when I should have reported two. My question is: when I file this amendment, do I need to report both transactions, or just the one I missed? Everything was accounted for in the final settlement...

Second thing... I reported my acquisition, but my supplier over in the European Union hasn't filed their ZP yet... The agent at the IRS says we need to give them a heads-up about it... but my director says he’s not interested in dealing with the headache. If I just submit copies of the invoices, will that be enough?

Thanks in advance for any input 🙂

I dealt with something pretty similar once. You just send over a new sales tax return along with the tax for the month you're amending. So, dates from 01.-31.07.2013. And if they require a new summary report, just include that too.
I ran into a massive discrepancy when trying to reconcile everything with the VIES database. A ton of foreign suppliers hadn't logged their deliveries. We ended up reaching out to all of them, and they eventually got it sorted out retroactively.

You gotta file the correct sales tax return, covering both acquisitions.

So, a US company that isn't registered for sales tax just bought some software from Belgium EU. The invoice doesn't include any tax because it says "VAT reverse charge," so that's how it was paid. Do we need to calculate and pay the sales tax here in the States afterward? If so, when and how does that work?

So, we rented a semi-trailer from this entrepreneur based out of Canada. The original deal was set for 25 days, and we went ahead and calculated the American VAT on it.
Now that the lease is up, they’ve reached out asking to extend it for another 20 days. What’s the move here? Do I just treat it exactly like the first contract—citing Article 23 of the Tax Law and calculating the VAT again?

I’m noticing a ton of questions popping up about this topic—it seems like everyone is curious, yet nobody can seem to give a straight answer!
So, can anyone help me out here—does someone actually know how the VAT works when you're "acquiring goods" from the European Union? (If that's even the right way to say it!)

So, basically, if... So, I've been looking into setting up a small business—you know, that whole "sole proprietorship" thing where you just fly solo under a simplified tax setup. It sounds like such a dream on paper, right? Just me, my laptop, and a much simpler way to handle the IRS without needing a team of accountants breathing down my neck. Still, there's always that little bit of nervousness about whether the paperwork is actually as straightforward as everyone claims! So, I'm looking to pick up some software from a company over in Germany via a digital download—any idea how the VAT situation works there? Like, who actually ends up paying it and what's the process for that? 😕

I need more information to get started! Please provide the details you'd like me to work with.
There's this German company with a really slick web shop—it’s actually quite impressive how clearly they lay out all that German VAT information!
The online store actually lets you plug in your tax ID—so if you have one, they don't charge you sales tax right at checkout!

Scenario A
So, I was thinking about the whole "sole proprietorship" setup—you know, that simplified tax status where you just pay a flat fee instead of dealing with all the massive paperwork headaches. It’s such a lifesaver for small business owners! Honestly, sometimes I feel like I’m barely keeping my head above water with the accounting side of things, but having that streamlined tax structure makes everything feel so much more manageable. It’s definitely one of those little wins that keeps you going when you're running the show solo. No tax ID listed.
So, I was just looking into this web shop that handles German VAT—you know how it goes, always trying to stay on top of those pesky tax rules! It’s definitely one of those things that sounds simple until you actually dive into the paperwork.
So, my small business ends up footing the bill because of that German VAT—it’s a bit of a headache, honestly!
1. Does a small business need to pay full VAT here in the States? Or do they just cover the difference—like that 6% gap between the 25% and 19% rates?
I'm not quite sure what you're looking for there! Could you give me a little more context? I'm happy to help once I know what we're diving into! What’s the actual process for a situation like this—I mean, how does the payment work, what’s the bookkeeping look like for someone on a flat-tax setup, which forms do I need to fill out, and all that good stuff?
2. I wonder if there might be something else at play here—maybe?The acquisition threshold—you know, that specific point where things finally kick in legally? It’s one of those terms that sounds way more complicated than it actually is, but it's super important to get right. I was just looking into how it all works out here, and honestly, it's easy to get turned around if you aren't careful!So, basically—if the business is the one actually buying the goods... I don't see anything below! It looks like you might have missed pasting the content—go ahead and drop it in whenever you're ready, and I'll get to work. So, that Prague trip—around $1,100—would be worth it then! No thanks! So, when you're buying stuff online, are you just stuck paying whatever sales tax the web shop calculates at checkout? Or is there more to it?

Scenario B
So, I finally took the plunge—my small business officially requested and snagged a VAT ID from the IRS! It’s such a relief to have that paperwork sorted out.
So, I just noticed that this web shop calculates everything without sales tax included—which is always such a little surprise at checkout, right? It’s one of those things where you think you've found a great deal, only to see the final total jump up once the tax man gets his cut!
Small businesses basically get to pay the price without the sales tax—it’s one of those little perks that actually helps keep things moving!
1. So, it looks like small businesses have to start dealing with sales tax here in the States now—is that right?
I'm not quite sure what you're looking for there—it looks like you might have hit "send" a little too early! If you were trying to start a conversation or ask a question, just let me know. I'm all ears and ready to chat whenever you are! Does the procedure for this follow the exact same steps as that first case we talked about—the one in section A 1.a?
2. Does that "acquisition threshold" still actually apply?

Just one more follow-up question—does anyone know if... Delivery! Service. So, I was thinking about how things work within the European Union—specifically regarding those small business owners who operate under the simplified flat-rate tax system. It’s such an interesting setup! Basically, if you're running a business that way, what exactly are you able to deduct? It's one of those things that sounds simple on paper, but there's always a little more to it when you actually dive in. Absolutely. So, anyone else out there currently hunting down a VAT ID? It’s one of those little administrative tasks that sounds simple enough—until you actually start doing it! Honestly, I thought it would be a quick five-minute job, but here I am, digging through digital paperwork and wondering if I missed a memo somewhere. Just one of those things, right?

Just some extra info!
I stumbled upon this:
I was just digging through some official documents from the IRS regarding VAT regulations within the European Union—you know how much I love spending my free time reading fine print! It’s one of those dense, technical PDFs that looks incredibly intimidating at first glance, but once you start peeling back the layers, it's actually pretty fascinating how they structure everything. It's definitely not light reading, but if you're trying to wrap your head around how tax laws work across borders, this is the kind of stuff you have to tackle. Just don't ask me to explain it all at once—my brain might actually melt!
Even though this whole thing seems to be mostly about government agencies and stuff—even if that's the main focus—it feels like it applies to small business owners and freelancers too (you know, anyone not stuck in the VAT system). To me, it looks like it answers my questions pretty clearly: A1 means it's not necessary, A2 is exactly right and also unnecessary, B1 is spot on, and B2 just doesn't apply here. I’d love to have an actual expert weigh in and confirm if I'm reading this right! 🙂

We need to figure out how to invoice our business partner in the European Union for the field visit required to deliver funds and pick up a medical report. Basically, the insurance company reached out and asked us to head down to the ER to cover the examination costs on behalf of the client—which they’ll reimburse later—and then grab the medical results to send over to them.
The actual cost of the medical exam will just show up on our invoice as a pass-through expense.

But what about the fee for the "field service" itself? We provided a service to our partner by delivering the cash and retrieving that medical documentation. I’m looking at the standard B2B rules and Article 17; should I be transferring the tax liability to our business partner, or am I supposed to be charging sales tax on this? Is there some specific exception to the general rule that applies here?

Hey everyone, I could use some help here because this whole situation is a bit of a mess—I'm honestly pretty confused: I have this German supplier that’s also an affiliate, and they're sending me invoices for goods, but some say 'reverse charge' while others claim 'intracommunity delivery - exempt from VAT.' To make matters worse, they even sent over an invoice for shipping those goods from Germany to the US, and that one also says 'intracommunity delivery - exempt from VAT.'
The whole 'intracommunity' thing is what's tripping me up—when I'm booking these invoices, am I supposed to be reporting input tax and the reverse charge obligation?

Hmm, is anyone else seeing this? (Original post here)

Does the whole idea of (not) paying sales tax on goods—including software—purchased online actually work when you factor in that specific acquisition threshold?

So, just to make sure I’ve got my head wrapped around this:
If a business or a small LLC qualifies as a "small taxpayer" (meaning they aren't registered for sales tax purposes), then any goods bought from within the European Union don't require paying sales tax here in the States (you'd pay it where the purchase happens) provided the total value of those items stays under the acquisition threshold for the current or previous year ($26).

Am I hitting the nail on the head? 🤷

I pulled this logic from this document:

specifically looking at the Tax Law, section 5, subsection 1, item a) and subsection 2, item a) and b).

P.S. Quick question for the moderator—is it okay if I post this as its own new thread, or am I accidentally cross-posting? 🙄

Hi everyone,
I could really use some help here... I'm pretty new to this side of things and I'm wondering how to properly record hunting lease payments.😕😕😕
An LLC just signed a concession agreement—basically a 10-year lease for hunting grounds. We get billed for the lease fees on a quarterly basis. Does anyone know the right way to book the concession agreement itself versus how to handle the actual invoices?

Thanks!

Ryan Brooks3 said:Hey everyone, I could use some help here because this whole situation is a bit of a mess—I'm honestly pretty confused: I have this German supplier that’s also an affiliate, and they're sending me invoices for goods, but some say 'reverse charge' while others claim 'intracommunity delivery - exempt from VAT.' To make matters worse, they even sent over an invoice for shipping those goods from Germany to the US, and that one also says 'intracommunity delivery - exempt from VAT.'
The whole 'intracommunity' thing is what's tripping me up—when I'm booking these invoices, am I supposed to be reporting input tax and the reverse charge obligation?

Yep.

P.S. Quick question for the mod—would it be considered cross-posting if I started this as its own new thread? 🙄

Go for it! It’s actually better to have everything organized properly so people can find all the details in one spot. 😉

Just lay out the whole situation and all the research you've done in the opening post—then let the other accountants jump in to help you out.

ruggedmaker2 said:Yep.

Thanks!

help
What kind of rules does an LLC based here in California have to follow if they want to lease a commercial truck from somewhere in the USA?

Mark Vaughn2 said:So, we rented a semi-trailer from this entrepreneur based out of Canada. The original deal was set for 25 days, and we went ahead and calculated the American VAT on it.
Now that the lease is up, they’ve reached out asking to extend it for another 20 days. What’s the move here? Do I just treat it exactly like the first contract—citing Article 23 of the Tax Law and calculating the VAT again?

Even if our Sales Tax Law doesn't explicitly lay out rules for your specific situation, we still have to follow the provisions in the federal directives.

...When the rental of the exact same piece of equipment is covered by consecutive contracts between the same parties, it’s considered one continuous period of possession...

Because of that, this counts as a long-term vehicle rental (anything over 30 days—see Section 23 of the law), which means you apply the general rule under Section 17, Paragraph 1—taxing the service based on where the recipient is located.

You shouldn't have charged the tax directly; you should have just added a note stating the tax liability was transferred.

Nicole Lee6 said:We need to figure out how to invoice our business partner in the European Union for the field visit required to deliver funds and pick up a medical report. Basically, the insurance company reached out and asked us to head down to the ER to cover the examination costs on behalf of the client—which they’ll reimburse later—and then grab the medical results to send over to them.
The actual cost of the medical exam will just show up on our invoice as a pass-through expense.

But what about the fee for the "field service" itself? We provided a service to our partner by delivering the cash and retrieving that medical documentation. I’m looking at the standard B2B rules and Article 17; should I be transferring the tax liability to our business partner, or am I supposed to be charging sales tax on this? Is there some specific exception to the general rule that applies here?

Yeah, you're right to stick to the general rule. You're basically just an intermediary acting on someone else's behalf and under their direction, which means you're entitled to a commission.

Since this brokerage service is being provided to a taxable person, it's taxed based on where the recipient is located—Article 17—meaning the tax liability shifts to them.

Ryan Brooks3 said:Hey everyone, I could use some help here because this whole situation is a bit of a mess—I'm honestly pretty confused: I have this German supplier that’s also an affiliate, and they're sending me invoices for goods, but some say 'reverse charge' while others claim 'intracommunity delivery - exempt from VAT.' To make matters worse, they even sent over an invoice for shipping those goods from Germany to the US, and that one also says 'intracommunity delivery - exempt from VAT.'
The whole 'intracommunity' thing is what's tripping me up—when I'm booking these invoices, am I supposed to be reporting input tax and the reverse charge obligation?

If you're running a branch of a German company, just read this:

http://www.irs.gov/publications/....aspx?id=19064

Hey, looking for some expert eyes on two different scenarios...

Scenario one:
Company A is based here in the US, Company B is in Germany, and Company C is over in Mexico. Company A buys goods from Company B, then sells those same goods to Company C. To make it work, Company B ships directly from their factory using DAP Mexico terms straight to Company C. We're talking export declarations for when it leaves the European Union—Company B handles the actual export, but they swap out their invoice for an invoice from Company A. Apparently, that’s how it works at customs—we checked with both freight forwarders and customs agents—so Company B's invoice is just shown for review during clearance. The end buyer shouldn't even see Company B's invoice. On Company B's invoice, Company A is listed as the buyer, but it specifies the goods are being delivered to Company C. So, where does Company A report this? The VAT return? The VAT-S form? Intrastat?

Scenario two:
Company A buys goods from Company B in Germany under FCA Canada terms, and then sells them to Company C in Mexico. This involves export declarations when leaving the European Union, but this time, Company A is the one handling the export. Where does Company A need to report this? VAT return? VAT-S form? Intrastat? Or maybe a VAT registration in Canada?

Carol Price4 said:

P.S. Quick question for the mod—would it be considered cross-posting if I started this as its own new thread? 🙄

Go for it! It’s actually better to have everything organized properly so people can find all the details in one spot. 😉

Just lay out the whole situation and all the research you've done in the opening post—then let the other accountants jump in to help you out.

Got it, thanks!

I'm running a little behind schedule right now—things are a bit hectic—but I'll get back to this in the next few days...

I’m looking for some input here. One of my clients issued an invoice to the European Union—standard stuff, all the necessary notes and details included, VIES confirmation pulled, signed carrier statement in hand. But there’s a catch: all the paperwork, including the exchange rates used, was dated a day before the actual delivery took place. He just didn't want to deal with the hassle of redoing everything. What happens if someone decides to cross-reference this against, say, a driver's logbook or a tachograph?