Doing business with USA member states

redgardener52 said:Does anyone happen to be able to help me out with this?🤔

Personally, I wouldn't list this in the sales tax reports or record it as if there were a transfer of tax liability when that isn't actually the case; those aren't valid elements on their invoice. You've already paid their sales tax since you mentioned they charged it directly on the bill. I would simply book the standard entry as a total expense (using the USD exchange rate) and leave it at that. If I'm off base, feel free to correct me, but that’s how we handled things whenever an invoice looked incorrect. Think of it this way: if you report it in your tax filings but they don't report it on their end, you're going to run into trouble with the IRS. Both sides have to report the invoice identically. The auditors might come knocking asking why you reported a tax liability that they didn't, and then they'll just tell you that you shouldn't have filed it because the invoice clearly shows their local sales tax rather than a transfer of obligation.

Brenda Chase3 said:Personally, I wouldn't list this in the sales tax reports or record it as if there were a transfer of tax liability when that isn't actually the case; those aren't valid elements on their invoice. You've already paid their sales tax since you mentioned they charged it directly on the bill. I would simply book the standard entry as a total expense (using the USD exchange rate) and leave it at that. If I'm off base, feel free to correct me, but that’s how we handled things whenever an invoice looked incorrect. Think of it this way: if you report it in your tax filings but they don't report it on their end, you're going to run into trouble with the IRS. Both sides have to report the invoice identically. The auditors might come knocking asking why you reported a tax liability that they didn't, and then they'll just tell you that you shouldn't have filed it because the invoice clearly shows their local sales tax rather than a transfer of obligation.

I suppose I'd just book it as an expense without tax, or maybe as a capital asset.
Class, for example, 4... / supplier 22...
Don't submit any sales tax filings, nor should they be included in the tax returns.
The issue is that you aren't eligible for the sales tax credit.👍

casualorca5 said:I suppose I'd just book it as an expense without tax, or maybe as a capital asset.
Class, for example, 4... / supplier 22...
Don't submit any sales tax filings, nor should they be included in the tax returns.
The issue is that you aren't eligible for the sales tax credit.👍

Thanks so much for all the help.🙂

Hey everyone 🙂
So, I’m totally tripping out over a question here...

I’ve got this incoming invoice from Switzerland in USD for some "customs clearance, shipping and payment of fees Administrative expenses" stuff. They even tacked on a 7.7% sales tax, but our US tax ID isn't listed anywhere on there. How am I supposed to book this?
Has anyone dealt with something like this before? I've been scouring the internet for a few days now but I'm getting nowhere...
Ludaaaaaaa

Thanks in advance 🙂

So, I’m running a small business here in the States and I'm not registered for sales tax. What's the deal with sending an invoice to a business owner over in Canada who also isn't registered for sales tax? Since neither of us has a tax ID, apparently we don't even need one if nobody's collecting tax, right? Also, what currency should I list on the bill? Does the guy in Canada just send a SWIFT transfer? And should I just keep going with my normal numbering sequence or label it Invoice 1?
Thanks in advance

First things first, you really have to look at what actually took place before you can even begin to figure out how the IRS is going to treat it.

The breakdown follows below. Just a heads-up: the figures are listed in USD, though they might show a conversion to Euros as well.

Thanks for getting back to me. We're looking at two different services here: one needs to happen right here at our office, and the other would be over in Austria.

Look, you both need to have your tax IDs sorted out at least 15 days before any services actually kick off.

https://www.irs.gov/tax-topics/vat-registration-requirements

http://www.investopedia.com/terms/v/vat.asp

There are plenty of links here if you feel like doing the homework... just scroll through.

I spent all day digging through those links, but I can’t find a single case where both the buyer and the seller aren't tax-registered. Does the B2C rule apply if I'm just providing a service at my own place of business?

Nah, you're still taxpayers; you just aren't registered in the sales tax system, so it's handled as a standard B2B transaction.

I work as a freelance translator.
Typically, my monthly workload involves handling two separate accounts—one for the United Kingdom and one for the Czech Republic. I have to file both my sales tax returns and my FBI reports, and the totals end up being identical on both forms.

However, this month is a bit different because I have three specific invoices to account for:
1) United Kingdom
2) Czech Republic
3) America

My question is regarding the filing process: should I be submitting sales tax filings for all three of these, while limiting my FBI reporting to just the first two? Does an invoice from America fall under the scope of the FBI reporting requirements (I suspect it doesn't), and does it still require a sales tax filing?

Timothy Torres3 said:I work as a freelance translator.
Typically, my monthly workload involves handling two separate accounts—one for the United Kingdom and one for the Czech Republic. I have to file both my sales tax returns and my FBI reports, and the totals end up being identical on both forms.

However, this month is a bit different because I have three specific invoices to account for:
1) United Kingdom
2) Czech Republic
3) America

My question is regarding the filing process: should I be submitting sales tax filings for all three of these, while limiting my FBI reporting to just the first two? Does an invoice from America fall under the scope of the FBI reporting requirements (I suspect it doesn't), and does it still require a sales tax filing?

America isn't subject to those reporting rules.
As for sales tax, it depends on whether you're filing based on when you get paid or when you send the invoice.😁

casualorca5 said:America isn't subject to those reporting rules.
As for sales tax, it depends on whether you're filing based on when you get paid or when you send the invoice.😁

I'm not registered for sales tax. So, from what I can gather, it seems like nothing from the US would show up on my sales tax filings or my CIA reports at all, right?

Hi there! I could use some help... I have a shipment of our own manufactured goods (traffic signs) being sent to a taxpayer with a valid VAT ID over in Canada (USA). How should I format the invoice, and which specific exemption clause or article should I include? Are there any special rules I should know about for this kind of delivery?
Thanks

Hey everyone, maybe this has been asked before, but if anyone can help me out, I’d really appreciate it.

A US-based LLC is starting to sell products through various American webshops. We hadn't planned on registering for VAT in the delivery states, at least not during the first year.
Because of that, we'll be charging American sales tax.
What exactly needs to be included on a B2C invoice to stay compliant with US legal frameworks?
From what I've gathered so far, the invoice can be multilingual, prices can be shown in USD, but the tax calculation must be based on the average exchange rate from the Federal Reserve, right?

Thanks!

Look, the invoice has to be in dollars, but you can also include the Euro amount based on the Federal Reserve's mid-market exchange rate. Most accounting software handles this automatically nowadays, so just double-check with your IT guy. If you’re out there manually typing up every single bill, just make sure you list the dollar amount in smaller print and the Euro amount in a larger font. The law doesn't dictate specific fonts, so feel free to play around with the layout until it looks right.
You can check out all the required invoice details right here:
https://www.irs.gov/guidance/vat-regulations-example.pdf

Need some advice here🙂)
I run a small business, but I’m not set up for sales tax and don't have a federal tax ID. I have a local shop. I need to buy some packaging from a supplier in Italy, but they're asking for my tax ID (like an SSN or EIN). I sent the money directly from my business account to their company account including the tax, but now they’ve realized they can't actually issue an invoice.
I do this all the time and everyone else just gives me a receipt (usually handwritten but with a stamp and all the info) that includes the Italian sales tax. This guy won't budge. He says he can't print a formal invoice.
I know some companies refuse to deal with private individuals—is he treating me like one? Maybe he's only registered for wholesale business-to-business transactions? What am I supposed to give him? I already sent the payment using my business ID, but they aren't accepting it. What now? 🙂 Thx

Megan Jackson68 said:Need some advice here🙂)
I run a small business, but I’m not set up for sales tax and don't have a federal tax ID. I have a local shop. I need to buy some packaging from a supplier in Italy, but they're asking for my tax ID (like an SSN or EIN). I sent the money directly from my business account to their company account including the tax, but now they’ve realized they can't actually issue an invoice.
I do this all the time and everyone else just gives me a receipt (usually handwritten but with a stamp and all the info) that includes the Italian sales tax. This guy won't budge. He says he can't print a formal invoice.
I know some companies refuse to deal with private individuals—is he treating me like one? Maybe he's only registered for wholesale business-to-business transactions? What am I supposed to give him? I already sent the payment using my business ID, but they aren't accepting it. What now? 🙂 Thx

Look, if you want him to issue an invoice without charging you local sales tax, you absolutely have to provide him with your sales tax ID (what they call a VAT ID over there). Just a heads-up: if a small business isn't part of the standard sales tax system, they don't just automatically get a tax ID; they actually have to apply for it through the IRS. You can verify tax IDs right here: http://ec.europa.eu/taxation_customs...tResponse.html

Since your business isn't currently registered in the sales tax system, if he issues you an invoice and calculates his own country's sales tax on it, then he doesn't actually need your tax ID at all—though, naturally, you'll end up paying more in the process.

So, we're running this LLC that isn't part of the VAT system, which means we don't have a tax ID for that. Now we've gotta bill some guy for translation services, but here’s the thing—he’s an Italian guy who actually owns a vacation rental house right here in the States, and he's fully registered in our tax system with a valid US tax ID. Since these services are taxed based on where the recipient is located, I guess I'm wondering... do we need to grab his tax ID and invoice him using the reverse charge method? Or do we just skip it and add a note saying we aren't in the tax system per the local regulations? Basically, the service is tied directly to that rental property he's running here in the US. Personally, back in Italy, he runs a totally different business that has zero to do with this specific job.

Brandon Walker6 said:So, we're running this LLC that isn't part of the VAT system, which means we don't have a tax ID for that. Now we've gotta bill some guy for translation services, but here’s the thing—he’s an Italian guy who actually owns a vacation rental house right here in the States, and he's fully registered in our tax system with a valid US tax ID. Since these services are taxed based on where the recipient is located, I guess I'm wondering... do we need to grab his tax ID and invoice him using the reverse charge method? Or do we just skip it and add a note saying we aren't in the tax system per the local regulations? Basically, the service is tied directly to that rental property he's running here in the US. Personally, back in Italy, he runs a totally different business that has zero to do with this specific job.

If your sole business relationship is with that individual holding the domestic tax ID, then you would simply list the exemption under Section 90 on the invoice. Otherwise, if you were providing the service to an entity in Italy, the reverse charge would apply.

In this particular scenario, it is clear that a reverse charge wouldn't be applicable; it would be functionally impossible to shift the tax liability to a US tax ID while simultaneously recording it in the way required by the accounting standards.