phoshizzo

I'm currently working w/ Louis Garneau for a custom clothing order of about $7000. I thought that they would charge tax on the order, but apparently they don't. This a good thing because the prices are going to be lower than I originally planned, but now I wondering what Uncle Sam is going to think when I deposit $7000 in checks, then get a $7000 money order to pay for the order.

For tax purposes, do I need to charge tax so not to piss off Uncle Sam. What do other clubs/teams do?

Thanks

anticlimbactic

Consult a tax professional in your state. I am not a tax professional, but I can pretend on BF.

You're only potentially looking at sales tax unless you're making a profit on the resale.

The seller collects sales tax and if LG does not have a legal presence in your state there is no expectation that they will collect that sales tax and forward it to the state.

If you are simply pooling the money to buy for the team and not for resale, then you do not likely need to get the government involved at any level.

evenslower

I'd be more concerned about the impressions of money laundering. Although I doubt 7K will raise any flags.

Little Darwin

Many states require you to pay taxes yourself if the vendor doesn't collect it.

For example, I know CA and PA income tax forms have a line item so that you can pay the sales tax with your income tax for all internet purchases that year.

In fact, I think I recall at least one of the states gets silly enough that if you buy something while you are out of state, and then take it into the state you owe sales tax on it...

I have not heard of anyone being challenged for not using this line item.

Your state will have their own rules and methods to collect taxes.

Garfield Cat

Some states like California have sales and use tax. Notice this tax is said in one phrase, sales and use. Therefore, if the seller does not collect the tax, then the user must voluntarily pay the use tax. Now, you're going to ask, who really does this, right? Heck if I know.

Some clubs are organized as tax exempt organizations Federal and State. On some of their purchases, they are exempt from sales tax as well. But I don't know if that means their club members don't have to pay sales or use tax, when their purchases benefit members. There is a tax concept called the private inurement doctrine.

I believe it was during the Clinton Administration that somehow exempted internet sales from taxation. This may be an area you are referring to.