Doing business with USA member states

ruggedmaker2 said:The Swedes actually have a point here.
The goods aren't even leaving the US, so you've gotta charge sales tax.
It doesn't matter where the buyer's headquarters are located; what matters is where the delivery actually happens.

When you're trying to figure out if sales tax applies, the whole thing hinges on what counts as the place of delivery—and in your situation, that’s right here in the States.
Sure, you're sending an invoice to Sweden, but since you aren't actually shipping anything there, you still owe the tax.

thanks a ton 🙂 just one more thing. When I'm filling out the tax forms, does this count toward taxable transactions within the USA? And should it be included in the aggregate filings?

Aaron Young85 said:thanks a ton 🙂 just one more thing. When I'm filling out the tax forms, does this count toward taxable transactions within the USA? And should it be included in the aggregate filings?

'taxable transactions in the EU?'
In my view, it’s just a standard delivery of goods within the USA, except you're invoicing an international client. It doesn't go in the ZP because the buyer isn't paying the tax—you are.🤔

Ethan Bailey18 said:'taxable transactions in the EU?'
In my view, it’s just a standard delivery of goods within the USA, except you're invoicing an international client. It doesn't go in the ZP because the buyer isn't paying the tax—you are.🤔

But what happens if they don't even have a registered headquarters here in the States? 🤔🙂

Aaron Young85 said:But what happens if they don't even have a registered headquarters here in the States? 🤔🙂

That’s irrelevant... the invoice goes to the buyer regardless.
I'm not sure if your software even allows that, but I used to "adjust" my base figures from 12,000 to 12,100 all the time.

Ethan Bailey18 said:That’s irrelevant... the invoice goes to the buyer regardless.
I'm not sure if your software even allows that, but I used to "adjust" my base figures from 12,000 to 12,100 all the time.

Alright, thanks a ton. So, basically, this is a taxable transaction at the 25% sales tax rate and it doesn't go into the zero-rated category. But here’s the kicker—after their accountant practically bled me dry insisting that sales tax had to be on the invoices, now the procurement team is breathing down my neck asking how the hell there's sales tax on them in the first place. Their big question is whether they actually need to register for some kind of VAT refund process here in the US??? We don't really deal with any of that stuff, right?

On top of all that, since I'm still pretty much the rookie accountant here, I noticed the previous guy was entering these exact same invoices (the ones with the sales tax included) into the system as tax-free exports to other US states. So, what am I supposed to do with that mess?

Does the invoice actually need to specify a transfer of tax liability when we're importing goods from Austria in this scenario? Right now, it just says, "In accordance with Article 46 of the tax law in Austria."

Aaron Young85 said:Alright, thanks a ton. So, basically, this is a taxable transaction at the 25% sales tax rate and it doesn't go into the zero-rated category. But here’s the kicker—after their accountant practically bled me dry insisting that sales tax had to be on the invoices, now the procurement team is breathing down my neck asking how the hell there's sales tax on them in the first place. Their big question is whether they actually need to register for some kind of VAT refund process here in the US??? We don't really deal with any of that stuff, right?

On top of all that, since I'm still pretty much the rookie accountant here, I noticed the previous guy was entering these exact same invoices (the ones with the sales tax included) into the system as tax-free exports to other US states. So, what am I supposed to do with that mess?

Look... I have no clue what the former accountant was doing. But...
If those goods aren't actually leaving the US, they don't meet the requirements under Section 41, so you have to charge sales tax..
Whether they decide to register or not isn't your problem..
You are handling a domestic US sale where you bill the customer..
The responsibility to collect the tax lies with you..
If they want a refund, they can register themselves.. That's their call based on their own math..
Honestly, I have no idea why invoices for goods that stayed within the US were being issued without sales tax in the first place
Our state laws might vary slightly, but we still follow the standard federal guidelines and general principles

Regarding your second point... just cite the specific code that allows for the non-taxable status..
We list it as reverse charge.. citing Section
But if they cited an exemption clause, then it's treated as an interstate acquisition
Not sure if that helps, but that's how my auditors handled it..
Maybe some other American accountants can weigh in

Ethan Bailey18 said:Look... I have no clue what the former accountant was doing. But...
If those goods aren't actually leaving the US, they don't meet the requirements under Section 41, so you have to charge sales tax..
Whether they decide to register or not isn't your problem..
You are handling a domestic US sale where you bill the customer..
The responsibility to collect the tax lies with you..
If they want a refund, they can register themselves.. That's their call based on their own math..
Honestly, I have no idea why invoices for goods that stayed within the US were being issued without sales tax in the first place
Our state laws might vary slightly, but we still follow the standard federal guidelines and general principles

Regarding your second point... just cite the specific code that allows for the non-taxable status..
We list it as reverse charge.. citing Section
But if they cited an exemption clause, then it's treated as an interstate acquisition
Not sure if that helps, but that's how my auditors handled it..
Maybe some other American accountants can weigh in

The second part was for Betty King7

Betty King7 said:Does the invoice actually need to specify a transfer of tax liability when we're importing goods from Austria in this scenario? Right now, it just says, "In accordance with Article 46 of the tax law in Austria."

Look, you don't need to spell out the whole tax transfer deal on the invoice. It’s not a requirement. You can just cite your own domestic tax code or even point back to the European Union directives. Honestly, as long as the legal basis is there, you're fine.

Ethan Bailey18 said:Look... I have no clue what the former accountant was doing. But...
If those goods aren't actually leaving the US, they don't meet the requirements under Section 41, so you have to charge sales tax..
Whether they decide to register or not isn't your problem..
You are handling a domestic US sale where you bill the customer..
The responsibility to collect the tax lies with you..
If they want a refund, they can register themselves.. That's their call based on their own math..
Honestly, I have no idea why invoices for goods that stayed within the US were being issued without sales tax in the first place
Our state laws might vary slightly, but we still follow the standard federal guidelines and general principles

Regarding your second point... just cite the specific code that allows for the non-taxable status..
We list it as reverse charge.. citing Section
But if they cited an exemption clause, then it's treated as an interstate acquisition
Not sure if that helps, but that's how my auditors handled it..
Maybe some other American accountants can weigh in

Thanks a ton 🙂 🙂 :clapping:

ruggedmaker2 said:Look, you don't need to spell out the whole tax transfer deal on the invoice. It’s not a requirement. You can just cite your own domestic tax code or even point back to the European Union directives. Honestly, as long as the legal basis is there, you're fine.

Fine. So we’re basically admitting both the input tax credit and the obligation? We have all the VAT IDs and numbers right here.

Our company just got an invoice for some new equipment coming in from Germany, but there's a bit of a mess—the total amount includes the German VAT at 19%.
Does anyone know the right way to book this?
We’re registered for sales tax here in the US, and the supplier is also a registered business back in Germany.
If you ask me, the supplier really should have issued the invoice without any tax applied in the first place...
So, how do we handle this in the books now? Should we be asking them for a refund on that tax?
And where does this even go on our tax filings, or do we just leave it out entirely?

It really should’ve been tax-free.
Did you actually send them your Tax ID? Or better yet, do you even have one?
If you don't, just hit up the IRS and get it sorted, then shoot it over to the vendor. There might still be a window to fix the invoice before things get messy. If you didn't give the supplier your Tax ID in the first place, they wouldn't have had any way to verify you through the federal database.

If that doesn't work, just write the whole thing off as equipment cost and try to claim a refund through that tax recovery service we talked about.

So, I’m trying to figure out how to handle an invoice for a client based in the USA if I'm selling them an apartment here in the States. Should I be charging sales tax or leaving it off? And does it actually matter if the buyer is just some regular person or if they're representing a corporation? Just so you know, the seller is a local US business already registered for sales tax.

I need some guidance on how to handle a situation where a client hands over invoices that fall into previous VAT periods. For instance, I just received four invoices from six months ago and three from five months ago, even though the VAT returns for those months have already been filed. Am I allowed to record these for input tax credit in the current July filing, or am I required to file amended returns for May and June with the IRS? Furthermore, does the IRS actually penalize businesses that happen to stumble upon lost invoices after the fact?

dustyscout8 said:I need some guidance on how to handle a situation where a client hands over invoices that fall into previous VAT periods. For instance, I just received four invoices from six months ago and three from five months ago, even though the VAT returns for those months have already been filed. Am I allowed to record these for input tax credit in the current July filing, or am I required to file amended returns for May and June with the IRS? Furthermore, does the IRS actually penalize businesses that happen to stumble upon lost invoices after the fact?

I dealt with this exact scenario just this month. My supervisor suggested I shouldn't make life harder than it needs to be; he told me to simply include them in the most recent filing. Since the IRS ultimately looks at the annual totals to see if everything balances out, and because you're recording both the expense and the credit simultaneously, it isn't a major issue. Just make sure to keep a clear note of when you actually received those invoices so you have a paper trail explaining why they weren't included earlier.

Brenda Chase3 said:I dealt with this exact scenario just this month. My supervisor suggested I shouldn't make life harder than it needs to be; he told me to simply include them in the most recent filing. Since the IRS ultimately looks at the annual totals to see if everything balances out, and because you're recording both the expense and the credit simultaneously, it isn't a major issue. Just make sure to keep a clear note of when you actually received those invoices so you have a paper trail explaining why they weren't included earlier.

I'm with you there—that's exactly how I handle it. Some people insist on doing formal amendments, but then you have to waste your breath calling the agent to explain everything... honestly, as long as the yearly totals balance out for them, it’s fine.

Just make sure during that first month of the year you really push them to hand over all the previous year's paperwork on time—you don't want that stuff dragging into the next cycle...

I really appreciate all the feedback here; honestly, that is exactly the strategy I was planning to implement. The problem is their sheer stubbornness—they always manage to dig up some random invoice from months ago just to derail my entire year... it’s exhausting.

Does anyone have any insight on how sales tax works if a corporation or just an individual from out of state picks up a property here?

Honestly, I'm feeling a little lost, so any kind of help would be a total lifesaver.

Thanks so much!

Hey everyone,

So, we just picked up a spare part for one of our trucks from an Austrian company for about $260. We gave them our tax ID, but they didn't charge us any sales tax. My brain is honestly fried right now—I can't for the life of me remember if I'm supposed to include this in my sales tax filings or what... 🤔