Sales tax procedure when tax not collected by vendor

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wxrwxr
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Sales tax procedure when tax not collected by vendor

Postby wxrwxr » Sun Oct 13, 2013 7:03 am

Is there a procedure for the following situation?
1. Authorized member is to purchase an item from Amazon.
2. Amazon does not collect sales tax for the member's state such as Idaho.
3. By law the member would be required to pay the sales tax with his/her personal state income tax return which may not be submitted until several months after the purchase.

I am guessing that such purchases are not allowed by church policy.

Gary_Miller
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Re: Sales tax procedure when tax not collected by vendor

Postby Gary_Miller » Sun Oct 13, 2013 2:18 pm

wxrwxr wrote:I am guessing that such purchases are not allowed by church policy.

There is nothing prohibiting these types of purchases.

Since the member is making the purchase and then more likely getting reimbursed it would be the members responsibility to pay the sales tax on their tax form. I would suggest the member add the sales tax amount to the reimbursement. However, as a Finance Clerk I'm not going to look at the purchase and make sure sales tax was paid so it would be up-to the individual.

jdlessley
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Re: Sales tax procedure when tax not collected by vendor

Postby jdlessley » Sun Oct 13, 2013 3:48 pm

I recommend contacting the Church tax department.
Tax Administration
50 East North Temple Street, Room 2223
Salt Lake City, UT 84150-3620
Telephone: 1-801-240-3003 or 1-800-453-3860, extension 2-3003

Personally, if I were to make a purchase over the internet that qualified for tax exempt status, and at the time of the purchase no tax were collected, I would keep personal records of the purchase along with details that showed the purchase qualified as a tax exempt purchase for the Church. In my state we use a state form on which the Church's exempt status is shown. This is used for brick and mortar tax exempt purchases. I would include this form with a copy of the receipt and a copy of the request for reinbursement form I filed with the ward for reimbursement. Then at tax filing time I would have no problems excluding the purchase from the list of Internet purchases requiring a tax payment.
JD Lessley
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eblood66
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Re: Sales tax procedure when tax not collected by vendor

Postby eblood66 » Sun Oct 13, 2013 3:55 pm

wxrwxr wrote:Is there a procedure for the following situation?
1. Authorized member is to purchase an item from Amazon.
2. Amazon does not collect sales tax for the member's state such as Idaho.
3. By law the member would be required to pay the sales tax with his/her personal state income tax return which may not be submitted until several months after the purchase.

I am guessing that such purchases are not allowed by church policy.

I doubt there is any prohibition against this kind of purchase. I would contact LUS to find out the appropriate action for your state. Although they are required to pay sales tax with income tax for personal purchases the same may not be true for purchases made on behalf of the church. The church's Tax Administration office should know and LUS should be able to connect you to them.

russellhltn
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Re: Sales tax procedure when tax not collected by vendor

Postby russellhltn » Sun Oct 13, 2013 4:31 pm

Gary_Miller wrote:Since the member is making the purchase and then more likely getting reimbursed it would be the members responsibility to pay the sales tax on their tax form. I would suggest the member add the sales tax amount to the reimbursement. However, as a Finance Clerk I'm not going to look at the purchase and make sure sales tax was paid so it would be up-to the individual.


The alternative is to look at the purchase and see if sales tax was paid. If not, add it to the reimbursement. That way you can be reasonably assured you won't get a surprise next year when the member comes back and asks for a reimbursement on the tax.

What the member does with the tax reimbursement or if they pay their sales tax is their problem.
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Mikerowaved
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Re: Sales tax procedure when tax not collected by vendor

Postby Mikerowaved » Sun Oct 13, 2013 6:54 pm

russellhltn wrote:The alternative is to look at the purchase and see if sales tax was paid. If not, add it to the reimbursement.

I'm not sure how an auditor would feel about that. You would essentially be writing a check for MORE than was actually spent or documented as being spent.
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