Posted by:
mike quinn
(---.carolina.res.rr.com)
In Hawaii you have a STATE General Excise Tax. [AKA: Gross Receipts Tax.] It is totally separate of Fed Tax. (Remember the double tax). Think of it as the upper 48 says Toe may toe and Hawaii says Toe ma toe. This tax completely ignores your FET. Think of the state telling you to "talk to the hand" when you say “FET” to them. A STATE tax is a STATE and has nothing to do with a FEDERAL tax.
When you post in your purchase journal, show cost of item you paid FET for. You can do this by G/L number or use a spreadsheet/journal to record it. Next in your sales journal you post the item sold and in that price you should have included A) 10% Federal "Import" excise tax as cost of goods sold, B) Federal "Export" excise tax on 'the sale less the cost of the item you already paid the tax on' for your newly Manufactured product. For the feds you must report federal excise tax you Collected on sales and report that you purchased certain parts from that you already paid the FET to. Surprisingly the feds do not double tax you on the same part. The fed instructions below says not to include it but they aint stupid, you still gotta prove it. It is not FedEx's or Seller responsibility to break it down for you. The feds consider this your problem. This is why when it comes to reporting taxes spreadsheets are your best friend.
You are probably very confused now but read the above again and try to think of it as the fed only takes a taste of any part only once. If you use ten parts to make a product and already paid the FET on two parts, then for tax purposes you must collect the FET only on the eight items the fed did not already collect their taste on. The other two items are part of cost of goods sold that you billed for. (You do not collect anything for the feds on those two parts)
I hope this helps. Feel free to ask more.
[
www.irs.gov]
Determination of Sale Price
In General. The tax on sport fishing equipment, electric outboard motors, and bows is based on the price for which the article is sold.
The price for which an article is sold includes the total consideration paid for the article, whether that consideration is in the form of money, services, or other things. Section 4216(a).
Include the following in the sale price:
• Any charge for coverings or containers (regardless of their nature).
• Any charge incident to placing the article in a condition packed ready for shipment.
Exclude the following from the sale price:
• The manufactures excise tax, whether or not it is stated as a separate charge.
• The actual cost of transportation, delivery, insurance, installation, and other expenses incurred by the manufacturer or importer in placing the article in the hands of the purchaser pursuant to a bona fide sale. (The costs of transportation of goods to a warehouse before their bona fide sale are not excludable.)
• Discounts, rebates, and similar allowances actually granted to the purchaser.
• Local advertising charges.
• Charges for warranty paid at the purchaser’s option.
