If I buy items on line from out of state ( no tax charged ) , never use them , and re - sell them on an auction site for profit or loss ( for example if something doesn't fit or I don't like it ) , do I owe use taxes on these items ? I don't have any re - sell license , it's just items I buy for myself like bags , clothing , but sometimes end up not using them , and re - sell them , and since it's called " use " tax , I wonder if I have to pay it in these situations . Thank you
Contracts / Agreements Lawyer
Sales tax applies to retail sales of certain tangible personal property and services. Use tax applies if you buy tangible personal property and services outside the state and use it within New York State. Products and services subject to tax
Sales and use tax (sales tax) is applied to:
tangible personal property (unless specifically exempt);
gas, electricity, refrigeration and steam, and telephone service;
food and beverages sold by restaurants, taverns, and caterers;
hotel occupancy; and
certain admission charges and dues.
For more detailed information about what sales are subject to tax, see Tax Bulletin Quick Reference Guide for Taxable and Exempt Property and Services (TB-ST-740).
Transactions not subject to tax/exempt sales
The Tax Law exempts purchases for resale; most sales to or by the federal and New York State governments, charitable organizations, and certain other exempt organizations; sales of most food for home consumption; and sales of prescription and nonprescription medicines.
Sales tax also does not apply to most services. Examples of services not subject to sales tax are capital improvements to real property, medical care, education, and personal and professional services. See Transactions that are not subject to sales tax for details.
If a property or service is exempt from tax from all purchasers, the vendor is not required to obtain an exemption certificate. However, an exemption certificate enables a purchaser to make tax-free purchases that would normally be subject to sales tax. See Tax Bulletin Exemption Certificates for Sales Tax (TB-ST-240) for details.
Additional taxes and fees
Certain additional taxes and fees are imposed as part of the sales tax. Tax Bulletin Sales Tax Rates, Additional Sales Taxes, and Fees (TB-ST-825) provides more detail about these additional taxes.
Passenger car rentals: An additional 11% tax applies to charges for passenger car rentals in the MCTD. Outside the MCTD, the car rental tax is 6%.
Information and entertainment services: An additional state tax applies to information and entertainment services heard over the telephone (such as "900" numbers). These taxes are in addition to the regular state and local sales tax on these services.
Hotel occupancy in New York City: A $1.50 per unit per day fee on hotel occupancy in New York City applies in addition to the sales tax on the rent for hotel occupancy.
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Use tax applies to items you purchase out-of-state and bring into the state. However, don't let the word "use" mislead you: unless you are in the business of reselling those goods at the time you purchase them you owe use tax; basically, your use is presumed.
My answer does not constitute legal advice and may not be relied upon by anyone for any purpose and does not constitute an attorney/client relationship or an offer to form such a relationship. This disclaimer is intended to be fully compliant with the requirements of Treasury Department Circular 230 and the terms thereof are fully incorporated by reference. If you wish to consult with me please contact me at dana@nytaxcounsel or visit my website at www.nytaxcounsel.com
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If you aren't registered, then you can't buy the items with use tax liability. You also have some real tax exposure if you are selling items of clothing. Most states only exempt two, maybe three sales - then you must register as a dealer and start collecting sales tax yourself. You become liable for the sales tax if you don't collect it. You could get credit for the use taxes paid on your purchases.