3 {{ upvoteCount | shortNum }}
3 {{ upvoteCount | shortNum }}

Any tax accountants here?

by sweetaj
2 replies
  • OFF TOPIC
    • |
I have a question, if anyone cares to answer. (U.S.)

Is "use tax" an expense or a liability? Is "use tax" deductible against revenue?

The detail behind the question: A sports team is buying equipment in bulk for their players. The players are reimbursing the sports team for the equipment and are not being charged sales tax. There is no profit being made. The company that shipped the equipment didn't charge state sales tax, and the sports team resides in a tax-collecting state. They were under the assumption that they would owe "sales tax" to the state for the equipment, but isn't it really "use tax".

Thanks for any answers!
AJ
  • Profile picture of the author Michael Motley
    i think it would be a sales tax. if the company bought the items on their tax id, so they didnt have to pay tax for the purchase, they should collect tax for the sale. Someone is going to owe the tax on that purchase, either the equipment seller or the purchaser.
    {{ DiscussionBoard.errors[1900911].message }}
  • Profile picture of the author sweetaj
    Yep, they plan on paying the tax. I just want to know how to classify it. Sales Tax (I was told) isn't tax deductible. And they didn't use their exemption # to get it, the company just forgot to add it on.

    Thanks for the reply!
    {{ DiscussionBoard.errors[1900928].message }}

Trending Topics