# Paying tax on an equipment purchase?



## Justin Walker (Dec 6, 2006)

I am curious how tax works, when purchasing a major piece of equipment for your business (ie, DTG printer) - do you pay tax if you purchase from within your own state, like with standard sales tax? Do you pay tax if you purchase from outside your home state? Does it matter?

Just curious what everyone has to say! Thanks for the input, guys.


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## DivineBling (Sep 14, 2010)

From what I understand, you only get to skip paying sales tax within your state if you have a seller's permit and will actually be reselling the items you're purchasing. If you're using it for your business and you purchase it within your state, at least here in California, you have to pay sales tax.


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## DAGuide (Oct 2, 2006)

My understanding is most states have a sales tax and a use tax. If you purchase a new piece of equipment from someone in your state, you should be charged sales tax on your invoice. If you purchase a new piece of equipment from someone outside your state, you are responsible for filing a use tax. This is the way it works in Florida and I have been told the same thing for other states. Ultimately, the state wants your money either way! 

Mark


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## DivineBling (Sep 14, 2010)

DAGuide said:


> My understanding is most states have a sales tax and a use tax. If you purchase a new piece of equipment from someone in your state, you should be charged sales tax on your invoice. If you purchase a new piece of equipment from someone outside your state, you are responsible for filing a use tax. This is the way it works in Florida and I have been told the same thing for other states. Ultimately, the state wants your money either way!
> 
> Mark


Hmmm... Whenever I've looked at the sales tax rate, I remember seeing sales & use together. I can't find anything that says they're separate.
California City and County Sales and Use Tax Rates - Board of Equalization


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## DAGuide (Oct 2, 2006)

DivineBling said:


> Hmmm... Whenever I've looked at the sales tax rate, I remember seeing sales & use together. I can't find anything that says they're separate.
> California City and County Sales and Use Tax Rates - Board of Equalization


Here is the terminology:

California's sales tax generally applies to the sale of merchandise, including vehicles, in the state. California's use tax applies to the use, storage, or other consumption of those same kinds of items in the state. Generally, if sales tax would apply when you buy physical merchandise in California, use tax applies when you make a similar purchase without tax from a business located outside the state.

It is posted on this page - California Use Tax Information - State Board of Equalization. 

Mark


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## allamerican-aeoon (Aug 14, 2007)

So did you pay the tax Justin? You bought many machine in past, haha. It is never too late to report to California, if you are busy I can do it for you if in case you did not meet citizen's duty yet. joke. I am sure you live by law.


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## rndubow (Feb 18, 2007)

In Minnesota, we have to pay the sales tax for all capital equipment and parts. We are then allowed to file for a full refund from the state twice per year to get the sales tax back.


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## binki (Jul 16, 2006)

california charges a sales tax or a use tax if purchased from outside the state. some states do not tax equipment for business. 

to get out of it in california you would have to have used the equipment for at least 6 months from the purchase before you bring it in to avoid the use tax. 

but, you still have to pay annual property tax on the equipment. it is 1% here in our county.


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## allamerican-aeoon (Aug 14, 2007)

In PA no tax for printing equipment. Because of Ben Franklin also on food, cloth, shoes and some more.


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## equipmentzone (Mar 26, 2008)

Justin Walker said:


> I am curious how tax works, when purchasing a major piece of equipment for your business (ie, DTG printer) - do you pay tax if you purchase from within your own state, like with standard sales tax? Do you pay tax if you purchase from outside your home state? Does it matter?
> 
> Just curious what everyone has to say! Thanks for the input, guys.





If you are looking for one answer nationwide you can quickly start to see from the responses you've gotten so far that there are actually 50 different answers as each of the states has their own sales tax policies. 

And in some states individual cities or counties have additional sales tax rules. 

Harry
Equipment Zone


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## allamerican-aeoon (Aug 14, 2007)

Harry, you have correct answer. that is final answer!


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## sunnydayz (Jun 22, 2007)

Yep I too had to pay the luxury tax annually for my dtg when I owned it.


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## Stitch-Up (May 26, 2007)

+20% when it arrives in the UK then add Import Duty too.


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## Titchimp (Nov 30, 2006)

Stitch-Up said:


> +20% when it arrives in the UK then add Import Duty too.


That 20% is reclaimable if you are VAT registered (Turnover more than £73,000 a year)


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## binki (Jul 16, 2006)

Just to add on the property tax bit, it is not only for equipment but all non-salable-inventory such as paper for your printer, the paint you put on the walls, the racks you hang stuff on, desks, chairs, pencils, etc. 1% each year just to have a spot in the county.


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