Doing business with USA member states

Wait, so now we’re seeing separate invoices for goods and services? 🤔 I think I might have missed a step somewhere here...

Can someone please make sense of this for me?

"Under the updated Sales Tax Law, business owners can claim tax deductions using retail receipts, provided they don't exceed
$233, and as long as the customer's name and SSN are clearly listed on them.

For any amounts over $233, you have to void the retail sale and move it to wholesale, where you
can issue an invoice that complies with the Sales Tax Law."

We just got word from the Democratic Party that all invoices need to be reported in USD (for domestic and international transactions). Do we need to include the specific exchange rate used to convert the currency into dollars on the invoice itself?

stormygardener44 said:We just got word from the Democratic Party that all invoices need to be reported in USD (for domestic and international transactions). Do we need to include the specific exchange rate used to convert the currency into dollars on the invoice itself?

Can you walk me through this whole dollar thing?
I remember calling the IRS back in the day to ask if everything had to be in USD, and they basically told me it wasn't strictly required by law. Now I'm just sitting here totally confused. 😕

ruggedmaker2 said:Can you walk me through this whole dollar thing?
I remember calling the IRS back in the day to ask if everything had to be in USD, and they basically told me it wasn't strictly required by law. Now I'm just sitting here totally confused. 😕

It's actually covered under Section 81 of the Law.

I usually just add a note specifying which currency I used for the calculation.

Henry Edwards33 said:It's actually covered under Section 81 of the Law.

I usually just add a note specifying which currency I used for the calculation.

Thanks!

Thanks!
🙂

ruggedmaker2 said:Can you walk me through this whole dollar thing?
I remember calling the IRS back in the day to ask if everything had to be in USD, and they basically told me it wasn't strictly required by law. Now I'm just sitting here totally confused. 😕

Unfortunately, it is. Section 81.

I honestly don't get why they told me at Fannie Mae that I didn't have to. Look, I just put the sales tax in dollars, but now I’m going to end up having everything mixed between dollars and euros.

Is it just me, or did the IRS—which apparently decided to take half the day off today—upload a completely different VAT form to their site since yesterday?

http://www.irs.gov/forms/VAT-form-example-1

http://www.irs.gov/forms/VAT-form-example-2

I guess it's hard to tell which one is actually the right one now.

I need to bill some services to a company over in Italy—should I be charging them sales tax or not?
(The service was performed here in the US, though I've been including sales tax on their invoices up until now)

Zachary White17 said:Is it just me, or did the IRS—which apparently decided to take half the day off today—upload a completely different VAT form to their site since yesterday?

http://www.irs.gov/forms/VAT-form-example-1

http://www.irs.gov/forms/VAT-form-example-2

I guess it's hard to tell which one is actually the right one now.

The link over on Google seems broken:
http://www.irs.gov/forms/broken-link-example

It looks like the sales tax link is still pointing to the old version, maybe?

ruggedmaker2 said:I honestly don't get why they told me at Fannie Mae that I didn't have to. Look, I just put the sales tax in dollars, but now I’m going to end up having everything mixed between dollars and euros.

Just put everything in dollars.
The advisors were following the directive, and it basically says you can do what you did (just the sales tax in dollars). However, everyone seems to be obsessing over the first part of the sentence in Section 81 of the Tax Code, which states: "Amounts on invoices shall be expressed in dollars..."
So now the IRS agents are starting to interpret it their own way, and we don't have much choice but to just list everything and call it a day.

Zachary White17 said:Is it just me, or did the IRS—which apparently decided to take half the day off today—upload a completely different VAT form to their site since yesterday?

http://www.irs.gov/forms/VAT-form-example-1

http://www.irs.gov/forms/VAT-form-example-2

I guess it's hard to tell which one is actually the right one now.

The second one is the right one.

Zachary White17 said:The link over on Google seems broken:
http://www.irs.gov/forms/broken-link-example

It looks like the sales tax link is still pointing to the old version, maybe?

Yeah, they've mixed up the forms. They posted the old one but labeled it with the new regulation code.
I'm not even sure about what they're saying on MTV... but I'm not going to bother digging into it. I'll just wait for them to fix the website.

David Parker44 said:Can someone please make sense of this for me?

"Under the updated Sales Tax Law, business owners can claim tax deductions using retail receipts, provided they don't exceed
$233, and as long as the customer's name and SSN are clearly listed on them.

For any amounts over $233, you have to void the retail sale and move it to wholesale, where you
can issue an invoice that complies with the Sales Tax Law."

Article 79 lists everything required for an invoice under the sales tax law.
If the law allows it, you can claim the credit.
In paragraph 12 of that same article, they added another type of receipt (which the IRS website says also works for credits) called a "simplified invoice." The difference here is that prices are shown inclusive of sales tax (like a price tag in a shop), rather than the "standard" way where you list the item price, then the tax, then the total at the bottom.
Now, here is the catch: that "simplified" invoice cannot exceed $233. I have no clue if that's 700.00 including tax or before tax, because the law just says... "for deliveries of goods or services..." (what exactly counts as a delivery in this context? Honestly, I don't feel like digging that up, I'd rather $233 and call it a day).
And that’s where this whole wholesale headache starts, since those follow the full requirements for a "proper" invoice.
I suspect retailers are being told things have become "complicated," and everyone will just have to figure out their own way to deal with it (probably by praying the software developers come up with something to get us out of this mess).
There. I tried to explain. Maybe it helps, maybe not....

Also, could someone explain which boxes on the sales tax form should be used for shipments to the USA (or even other countries), assuming I have proof they are tax-exempt and I still need to account for "domestic" sales tax?

triangle said:Exactly. As things stand right now, you’re basically stuck with two options:
1. Issue two separate invoices and just cross-reference the same "service intervention."
2. Use software capable of distinguishing tax types at the line-item level, while simultaneously interpreting the Law such that a "0% VAT rate" is actually treated as "no VAT rate being shown." Honestly, I think the legislator missed the mark when they used the word "stated" in this context!

Well, up until now, Synesis has worked by showing the specific tax type for each individual line item. For instance, on an invoice I handled recently, I had two items: one for domestic transport taxed at 25%, and another for international transport using a tariff code—essentially a 0% rate—with a footnote at the bottom stating that item X isn't subject to tax per Section Y. I haven't fully dug into how it will work moving forward. Do you think I could still pull that off on a single invoice, provided the clause at the bottom is worded differently?

Richard Howard55 said:Article 79 lists everything required for an invoice under the sales tax law.
If the law allows it, you can claim the credit.
In paragraph 12 of that same article, they added another type of receipt (which the IRS website says also works for credits) called a "simplified invoice." The difference here is that prices are shown inclusive of sales tax (like a price tag in a shop), rather than the "standard" way where you list the item price, then the tax, then the total at the bottom.
Now, here is the catch: that "simplified" invoice cannot exceed $233. I have no clue if that's 700.00 including tax or before tax, because the law just says... "for deliveries of goods or services..." (what exactly counts as a delivery in this context? Honestly, I don't feel like digging that up, I'd rather $233 and call it a day).
And that’s where this whole wholesale headache starts, since those follow the full requirements for a "proper" invoice.
I suspect retailers are being told things have become "complicated," and everyone will just have to figure out their own way to deal with it (probably by praying the software developers come up with something to get us out of this mess).
There. I tried to explain. Maybe it helps, maybe not....

Also, could someone explain which boxes on the sales tax form should be used for shipments to the USA (or even other countries), assuming I have proof they are tax-exempt and I still need to account for "domestic" sales tax?

I’ve been chewing on that exact same problem. Based on everything I’ve gathered so far, my take is this: if you don't have proof that the liability is being transferred, you basically treat it like a standard domestic sale. You report it in those specific columns as if you just sold something right here in town and charged the full tax amount. It doesn't really matter if the destination is another state or some foreign country—if you can't prove they're legitimate tax entities, you haven't successfully transferred the tax obligation. Since there's no transfer, you aren't filing an aggregate report for it; you just treat it like any other local invoice where you've collected the tax. At least, that's how I've interpreted the rules.🤷

Richard Howard55 said:Article 79 lists everything required for an invoice under the sales tax law.
If the law allows it, you can claim the credit.
In paragraph 12 of that same article, they added another type of receipt (which the IRS website says also works for credits) called a "simplified invoice." The difference here is that prices are shown inclusive of sales tax (like a price tag in a shop), rather than the "standard" way where you list the item price, then the tax, then the total at the bottom.
Now, here is the catch: that "simplified" invoice cannot exceed $233. I have no clue if that's 700.00 including tax or before tax, because the law just says... "for deliveries of goods or services..." (what exactly counts as a delivery in this context? Honestly, I don't feel like digging that up, I'd rather $233 and call it a day).
And that’s where this whole wholesale headache starts, since those follow the full requirements for a "proper" invoice.
I suspect retailers are being told things have become "complicated," and everyone will just have to figure out their own way to deal with it (probably by praying the software developers come up with something to get us out of this mess).
There. I tried to explain. Maybe it helps, maybe not....

Also, could someone explain which boxes on the sales tax form should be used for shipments to the USA (or even other countries), assuming I have proof they are tax-exempt and I still need to account for "domestic" sales tax?

So, from what I gather, I can just keep issuing retail receipts exactly like I have been, right? Since there aren't any changes to the retail format, I can still issue an R-1 higher than $233???🙄

Unbelievable. I honestly don't think even Linić fully understands this!

Hello everyone,
I will share some personal experiences;
after reviewing the law and the regulation : article 185., and waiting on our developers, we finally shipped goods to the European Union yesterday. How? Quite simply, using a delivery note and a CMR. I'll send the invoice once we receive the updated versions from our pupils. The goods have arrived, and the delivery notes and CMRs are confirmed.

Hi everyone, let’s dive into this properly and really dig in. Honestly, my head is spinning a bit from all of this; every time I feel like I finally have a handle on things, everything just starts feeling fuzzy again. Could someone walk me through how this works regarding the collective reporting for service supplies within the European Union, specifically looking at the regulation : article 185.?

regulation : article 185.

(4) Services that are exempt from the Value Added Tax Act in the member state where the transaction is taxable are not included in the collective report.

The thing is, I provide services that are exempt from the Value Added Tax Act based on a specific section of the law. Should I be including them in the collective report, or should I leave them out entirely?

Best,

ruggedmaker2 said:Can you walk me through this whole dollar thing?
I remember calling the IRS back in the day to ask if everything had to be in USD, and they basically told me it wasn't strictly required by law. Now I'm just sitting here totally confused. 😕

At the IRS seminar, Markota mentioned that EU delivery invoices have to be in USD, though maybe another currency works too??? According to Article 81 of the Internal Revenue Code. We were all pretty exhausted by then, so nobody really felt like arguing about it. 🙂