Sales_Tax_Session-_Cloud_Computing (3)

Sales_Tax_Session-_Cloud_Computing (3) - Taxing the Clouds...

Info iconThis preview shows pages 1–9. Sign up to view the full content.

View Full Document Right Arrow Icon
Introduction to U.S. Sales and Use Taxes Page 1 Taxing the Clouds Faranak Naghavi
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Introduction to U.S. Sales and Use Taxes Page 2 Overview of the U.S. Tax System Federal level taxes Income Payroll Excise taxes on some items ( e.g. , fuel, tobacco) State and Local level taxes Income/Franchise Sales and Use Property Employment/Payroll
Background image of page 2
Introduction to U.S. Sales and Use Taxes Page 3 Imposition of Sales and Use Taxes 45 states, the District of Columbia, and the Commonwealth of Puerto Rico impose a sales/use tax Numerous local jurisdictions are authorized to impose local taxes in addition to the state taxes Tax may be imposed on the seller or the purchaser, but the purchaser will always bear the economic burden of the tax States with no sales tax (NOMAD)
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Introduction to U.S. Sales and Use Taxes Page 4 Sales Tax Base Tax generally imposed on receipts from the sale of Tangible Personal Property (TPP) TPP is: Tangible – Intangible property such as stocks and patents are not taxable Personal – Real property generally is not taxable Property – Services generally are taxable only if expressly enumerated as such under state law Receipts from other types of transactions (services; mixed transactions) may be taxable depending on state law
Background image of page 4
Introduction to U.S. Sales and Use Taxes Page 5 Use Tax Complement to Sales Tax No use tax if state sales tax paid Credit for sales or use taxes paid to other states Collection of Use Tax Seller’s Viewpoint: Companies must collect use tax from purchasers where it has nexus Purchaser’s Viewpoint: Companies must self-assess use tax if vendor does not charge use tax (if vendor does not have nexus and is therefore not required to collect)
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Introduction to U.S. Sales and Use Taxes Page 6 Responsibility for Collecting and Remitting Tax Retailer located in a state is required to collect tax on sales in the state Retailers are also required to collect tax on sales made in other states if the retailer has nexus with the state Nexus refers to the connection between the state and the activity or person it seeks to tax Sufficient nexus must exist before a jurisdiction can impose a tax or tax collection responsibility
Background image of page 6
Introduction to U.S. Sales and Use Taxes Page 7 Nexus Nexus = Jurisdiction to Tax For sales and use tax purposes, nexus is created only by a physical presence in the state Direct Physical Presence Affiliate Nexus (Indirect Physical Presence) No permanent establishment required ( e.g. , delivery in own vehicles) Different rules for other taxes ( e.g. , income-based taxes)
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Introduction to U.S. Sales and Use Taxes Page 8 Nexus – The Primary Issue Does the state have jurisdiction to compel a vendor to charge/collect/remit sales and use taxes on taxable goods and services? Vendor must have nexus (connection) with taxing state,
Background image of page 8
Image of page 9
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 27

Sales_Tax_Session-_Cloud_Computing (3) - Taxing the Clouds...

This preview shows document pages 1 - 9. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online