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Thread: stupid question - sales tax and non-excise taxes?

  1. #1
    Join Date
    Jan 2009
    Location
    Abingdon, VA.
    Posts
    191

    stupid question - sales tax and non-excise taxes?

    OK, this is very late in the game for us since we're licensed and nearly ready to sell beer but I was just thinking about other taxes besides federal and state excise taxes.

    We decided recently to add a retail off license and do growler fills which led us to ponder 'do we have to pay sales tax on this' which then begged the question 'do we pay sales tax when we sell kegs to our distributor' (we're a production microbrewery).

    I feel like such an idiot for missing this up til now but, hell, I'm an idiot. What's the answer? What other taxes am I missing?

    I guess I was assuming all along that with a 7/bbl federal excise tax and a state of $8.06/bbl we were covered. Man. . . . . . . . . . . . . . . .
    _______________________
    Chris Burcher, Wolf Hills
    Abingdon, VA

  2. #2
    Join Date
    Mar 2003
    Location
    Nashville
    Posts
    693
    I would think yes, you have to pay sales tax on retail receipts, but no, not on sales to wholesalers.
    Linus Hall
    Yazoo Brewing
    Nashville, TN
    [url]www.yazoobrew.com[/url]

  3. #3
    Join Date
    Sep 2008
    Posts
    75
    Check with your local excise tax folks (the ones in the Darth Vader outfits...) but generally you have to pay sales tax on any sale of goods to the end customer, but not on sales to folks that are buying for the purpose of resale. So, if the person you're taking money from is going to drink the beer - pay sales tax. If not, they're resellers/wholesalers and the transaction is not subject to sales tax.

    Most jurisdictions (including CA, where I am) require a "resale permit" or registration number if you're a wholesaler or distributor, which they would provide to you (the manufacturer) for your records. In CA the purchaser generally has to execute a form with their resale number stating they are making the purchase for the purpose of resale and therefore the seller is not on the hook for sales taxes. The brewery keeps this on file in case Darth Vader does an audit.

  4. #4
    Join Date
    Sep 2007
    Location
    McCall, Idaho
    Posts
    337
    A tax bracket issue in Idaho we were a tad behind the curve on was "beer" tax vs "Strong beer or Wine" tax. Anything 4% by weight and over is "strong beer"
    so .45 cents per gallon instead of .15 cents per gallon. Josh....you mentioned this early on but we neglected to act on this fine wisdom you shared!

    Gawd I hope the BA finds a way to push their reduced tax paperwork legislation thru congress.

  5. #5
    Join Date
    Jan 2009
    Location
    Abingdon, VA.
    Posts
    191
    I figured this out when I accessed my online tax filing website. I file retail at the state regular rate and excise separately. Thanks.
    _______________________
    Chris Burcher, Wolf Hills
    Abingdon, VA

  6. #6
    Join Date
    Sep 2008
    Posts
    75
    Not a stupid question, by the way. I've been an attorney for longer that I like to think about and I @#$%&ing hate anything to do with tax... ALWAYS ask questions about tax.

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