Doing business with USA member states

casualorca5 said:Don't worry, it isn't a significant amount. If Customs calls you, you can just explain it.👍

thanks

Need some help here—how should I handle the sales tax on these specific expenses:
- hotel stay in Brussels,
- flight from some Greek airline on the route from LA to Brussels,
- train ticket bought in Düsseldorf for the trip back home.
Everything was paid via corporate card in USD.
Since we're dealing with services within the USA, do I record the liability and claim the input tax on these?

Also, what’s the deal with hotel bills from Mexico? My gut says I shouldn't be recording any liability or claiming tax since there's no sales tax involved.

George King4 said:Need some help here—how should I handle the sales tax on these specific expenses:
- hotel stay in Brussels,
- flight from some Greek airline on the route from LA to Brussels,
- train ticket bought in Düsseldorf for the trip back home.
Everything was paid via corporate card in USD.
Since we're dealing with services within the USA, do I record the liability and claim the input tax on these?

Also, what’s the deal with hotel bills from Mexico? My gut says I shouldn't be recording any liability or claiming tax since there's no sales tax involved.

Look, you only deal with a liability and input tax if the tax obligation actually shifts to you.
With the kind of invoices you're talking about, there's no transfer of tax liability. You've probably already been charged sales tax on them, so that's it—it's paid.

ruggedmaker2 said:Look, you only deal with a liability and input tax if the tax obligation actually shifts to you.
With the kind of invoices you're talking about, there's no transfer of tax liability. You've probably already been charged sales tax on them, so that's it—it's paid.

That’s my take as well.
Business travel expenses. If there isn't a "reverse charge" note citing the specific exemption code, sales tax isn't your concern.

It's the same story in Mexico.

ruggedmaker2 said:Look, you only deal with a liability and input tax if the tax obligation actually shifts to you.
With the kind of invoices you're talking about, there's no transfer of tax liability. You've probably already been charged sales tax on them, so that's it—it's paid.

Thanks a ton. I usually just book everything without sales tax using the mid-market rate on the issue date, but a coworker told me she books all invoices from suppliers in other USA states as both a liability and an input tax under services. She also files a specific usage report whenever she submits her standard sales tax forms.

George King4 said:Thanks a ton. I usually just book everything without sales tax using the mid-market rate on the issue date, but a coworker told me she books all invoices from suppliers in other USA states as both a liability and an input tax under services. She also files a specific usage report whenever she submits her standard sales tax forms.

In principle, those invoices function just like our domestic cash transactions; the sales tax is already calculated (the rate depends on the originating state), but it has to be clearly stated on the invoice itself.
Check if the sales tax is explicitly listed. If it is, the entire amount is recognized as a cost, and you don't need to report it on the import tax form.

George King4 said:Thanks a ton. I usually just book everything without sales tax using the mid-market rate on the issue date, but a coworker told me she books all invoices from suppliers in other USA states as both a liability and an input tax under services. She also files a specific usage report whenever she submits her standard sales tax forms.

🤦
Look, it doesn't matter if the invoice comes from another USA state or country. What matters is the PLACE OF TAXATION.
If you're dealing with a delivery of goods or services where the taxation happens in the country where the invoice was issued, then there’s no transfer of tax liability. Period.
For a transfer of tax liability to actually happen, it has to be explicitly stated on the invoice—like citing a specific section of the US tax code or a federal regulation. If it's not clearly marked on that piece of paper, it didn't happen. In those cases, you don't pay the tax of the issuing country; instead, you see a note about the transfer of tax liability.

And let's be real: if there is actual sales tax listed on an invoice, the debate is over. The tax was paid. You might try to get it back through some tax refund service later, but there is absolutely no "transfer of liability" happening there.

ruggedmaker2 said:🤦
Look, it doesn't matter if the invoice comes from another USA state or country. What matters is the PLACE OF TAXATION.
If you're dealing with a delivery of goods or services where the taxation happens in the country where the invoice was issued, then there’s no transfer of tax liability. Period.
For a transfer of tax liability to actually happen, it has to be explicitly stated on the invoice—like citing a specific section of the US tax code or a federal regulation. If it's not clearly marked on that piece of paper, it didn't happen. In those cases, you don't pay the tax of the issuing country; instead, you see a note about the transfer of tax liability.

And let's be real: if there is actual sales tax listed on an invoice, the debate is over. The tax was paid. You might try to get it back through some tax refund service later, but there is absolutely no "transfer of liability" happening there.

Thanks,
how should I log this one: bought a license for some Russian antivirus software with a credit card, and they just emailed an order number?
subtotal $164.95
VAT $41.24
order total $206.19

George King4 said:Thanks,
how should I log this one: bought a license for some Russian antivirus software with a credit card, and they just emailed an order number?
subtotal $164.95
VAT $41.24
order total $206.19

Look, Russia isn't part of the USA; they're a foreign country.
I haven't dealt with this specific mess before, so I haven't spent hours digging through the fine print.
check out the details here:
http://www.irs.gov/tax-topics/sales-tax-rules...0.2014.pdf

I just launched my own car dealership
I picked up a vehicle in Europe that's part of the VAT system, but because of how it was acquired, I need to apply the special margin taxation scheme.

The sticker price on the car itself is $3,600.

On top of that, I had various transport and logistics costs, which were hit with a 21% tax rate, totaling $135.00.

How exactly does this work when filing my sales tax returns?

Specifically, regarding the car versus those extra overhead costs—am I actually able to claim a credit for the tax paid on those additional expenses?

Exporting to Japan,
does anyone know?
I guess Japanese companies don't have tax IDs????

casualorca5 said:Exporting to Japan,
does anyone know?
I guess Japanese companies don't have tax IDs????

It’s the same deal as any other foreign country.
You need a VAT number to transfer tax liability, but in this case, there isn't one. If you don't have a number on the invoice, you just cite the standard export regulation like you would for any other shipment.

Ethan Bailey18 said:It’s the same deal as any other foreign country.
You need a VAT number to transfer tax liability, but in this case, there isn't one. If you don't have a number on the invoice, you just cite the standard export regulation like you would for any other shipment.

Thanks,

it still seems somewhat odd to me that they lack any sort of "ID number," or whatever the sales department calls it.🤔

I honestly think they ought to have some kind of identification number 😁
It doesn't even have to be labeled specifically as a Tax ID or anything, but there really should be some sort of reference code on there.
Take a closer look at that order confirmation or the contract you've already got—it’s gotta be tucked away in there somewhere. If it’s nowhere to be found, just shoot them an email. They'll probably just send over whatever info you're looking for.

I could use some help here,

I provided a service at my office to an individual from Canada—essentially a foreign client. I billed him under his full name and address in Canada, and he went ahead and paid the invoice immediately via a local US post office.

Since I’m part of the VAT system, I just issued a standard invoice with the base amount plus tax.
I already remitted the tax to the government and recorded it as a domestic sale on my tax return.

Now I'm wondering if I handled this correctly... or if there was something else I should have documented since he's a foreign citizen and an individual...
Thanks,

You did the right thing. 👍

Just a quick question for information—let's say, importing cosmetics.

If I were to import "Product X" cosmetics from the European Union and sell them here via a webshop as an LLC, how does the taxation work? The product has all its labels and meets all safety regulations for sale within the European Union.

For instance: Product X costs 18 Euro at wholesale within another EU member state, and shipping to the US is 2 Euro. That brings the total to 20 Euro.

That same product sells in the US for 42 Euro. If I sold it for 35 Euro, would my costs be the 20 Euro paid to the supplier plus 25% sales tax on the 35 Euro retail price? That would be 28.75 Euro, meaning the potential profit for the company would be 6.25 Euro per unit?

Jason Walker said:Just a quick question for information—let's say, importing cosmetics.

If I were to import "Product X" cosmetics from the European Union and sell them here via a webshop as an LLC, how does the taxation work? The product has all its labels and meets all safety regulations for sale within the European Union.

For instance: Product X costs 18 Euro at wholesale within another EU member state, and shipping to the US is 2 Euro. That brings the total to 20 Euro.

That same product sells in the US for 42 Euro. If I sold it for 35 Euro, would my costs be the 20 Euro paid to the supplier plus 25% sales tax on the 35 Euro retail price? That would be 28.75 Euro, meaning the potential profit for the company would be 6.25 Euro per unit?

Cost basis: 20 Euro
RUC : 8 Euro
Sales Tax, 25% : 7 Euro
====================
Retail Price : 35 Euro

Maybe analyze the overhead, the market, initial capital, risks... more thoroughly.
Good luck.👍

Starting an entirely new LLC just for that seems a bit overkill, honestly, though I can see how expanding what you’re already offering through your current business makes total sense. Don't forget that if you go the online store route, you'll have to factor in all those shipping costs too.

Thanks for the input. I’m just looking for some rough numbers right now. It wouldn't be limited to a single product, either; we're talking about a broader range from several different manufacturers. Essentially, the webshop would focus on consumer goods imported from the European Union. Of course, I'll also need to factor in shipping costs to the customer.

Regarding monthly business expenses—if I'm already employed and not paying my own self-employment taxes, what would those look like without the cost of renting a warehouse? I'll run those numbers once I find a location.

Thanks