Sale, but not resale...

Posted by Philip Nelson on June 1, 2007, 11:21 am

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Arno Martens wrote:

> wrote:

>>> Allan Martin wrote:

>>>>> I own two businesses: Mine, and my wife's (co-owner). Yesterday, my

>>>>> wife's biz needed a new printer, so I purchased one with my biz credit

>>>>> card. My wife's biz paid me for it.

>>>>>

>>>>> How do I account for this? I don't want to invoice her and charge her

>>>>> sales tax on the printer (I'm a computer equip. reseller, btw). I just

>>>>> want to transfer the cost to the other biz.

>>>>>

>>>>> Any suggestions?

>>>> Record the credit card purchase to a balance sheet account called Due

>>>> from Wife's Biz. Record the check received from your wife's biz to the

>>>> same account.

>>> Just curious, is a balance sheet account the same as a clearing account

>>> (discussed earlier in a similar context)?

>> A Clearing account IS a balance sheet account.

>>> Also, I don't wish to spoil the party, but in my state at least, by

>>> law, someone has to pay the sales tax, sooner or later. If it was my

>>> business, I would invoice.

>> If the husband paid the sales tax on the original purchase then they don't

>> need to pay it again. Only 1 person needs to pay the sales tax. I think the

>> OP is thinking that an invoice automatically triggers sales tax. He could

>> make the sale tax exempt assuming the husband paid the sales tax already. If

>> he did not pay sales tax, then the wife should pay it. It can be treated as

>> either sales tax or Use tax.

>>> Of course I'm not married, so what do I know.

>> teehee

> He said that he is a computer reseller.

> In my neck of the woods that means he did NOT pay the sales tax and that

> he would HAVE to charge it on a sale to his wife's business.

> As you said, 1 person HAS to pay the tax.

OK, I am not married, but I like to think I am not a complete idiot. He
could have one of those "We pay the sales tax" sales. Which brings up a
question- How to invoice that? I guess a discount expense item in the
amount of the tax?

I am not a professional, but I guess a company can sell below cost to
special customers without getting into trouble with anyone, as long as
they don't make a habit of it.

--
Phil Nelson

Posted by Arno Martens on June 1, 2007, 9:21 pm

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On Fri, 01 Jun 2007 08:21:19 -0700, Philip Nelson

>Arno Martens wrote:

>> wrote:

>>>> Allan Martin wrote:

>>>>>> I own two businesses: Mine, and my wife's (co-owner). Yesterday, my

>>>>>> wife's biz needed a new printer, so I purchased one with my biz credit

>>>>>> card. My wife's biz paid me for it.

>>>>>>

>>>>>> How do I account for this? I don't want to invoice her and charge her

>>>>>> sales tax on the printer (I'm a computer equip. reseller, btw). I just

>>>>>> want to transfer the cost to the other biz.

>>>>>>

>>>>>> Any suggestions?

>>>>> Record the credit card purchase to a balance sheet account called Due

>>>>> from Wife's Biz. Record the check received from your wife's biz to the

>>>>> same account.

>>>> Just curious, is a balance sheet account the same as a clearing account

>>>> (discussed earlier in a similar context)?

>>> A Clearing account IS a balance sheet account.

>>>

>>>> Also, I don't wish to spoil the party, but in my state at least, by

>>>> law, someone has to pay the sales tax, sooner or later. If it was my

>>>> business, I would invoice.

>>> If the husband paid the sales tax on the original purchase then they don't

>>> need to pay it again. Only 1 person needs to pay the sales tax. I think the

>>> OP is thinking that an invoice automatically triggers sales tax. He could

>>> make the sale tax exempt assuming the husband paid the sales tax already. If

>>> he did not pay sales tax, then the wife should pay it. It can be treated as

>>> either sales tax or Use tax.

>>>

>>>> Of course I'm not married, so what do I know.

>>> teehee

>> He said that he is a computer reseller.

>> In my neck of the woods that means he did NOT pay the sales tax and that

>> he would HAVE to charge it on a sale to his wife's business.

>> As you said, 1 person HAS to pay the tax.

>OK, I am not married, but I like to think I am not a complete idiot. He

>could have one of those "We pay the sales tax" sales. Which brings up a

>question- How to invoice that? I guess a discount expense item in the

>amount of the tax?

>I am not a professional, but I guess a company can sell below cost to

>special customers without getting into trouble with anyone, as long as

>they don't make a habit of it.

I have some used equipment customers who say "I'll buy it, but only if
you don't charge the tax.

If there is sufficient profit in the asking price I say OK. I'll process
an invoice in a "Copy of Company.qbw", print a file copy and save it
with a regular invoice that shows the same total, including sales taxes.
--
Arno

Posted by grep on July 20, 2007, 4:53 pm

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Allow me to clear this stuff up a bit, since it's taken me quite some
time to get back here:

I'm a computer reseller, so you weren't insane to infer that I didn't
pay sales tax on it. In this case, however, you'd be wrong. She needed a
new printer, so I went to Office Depot and bought her one. I paid sales
tax on it there. That's the reason for the question: I didn't want to
pay sales tax on it twice. Not only that, but since I already paid sales
tax, if she were to also pay sales tax, she would be paying it on top of
the sales tax I already paid, bringing her tax amount to higher than the
tax I already paid! Craziness...

So that's what I was trying to get out of.

Now I'm still not entirely sure I understand all your answers, but it
certainly does give me what to think about.

Thanks,

grep

Allan Martin wrote:

>>I own two businesses: Mine, and my wife's (co-owner). Yesterday, my wife's

>>biz needed a new printer, so I purchased one with my biz credit card. My

>>wife's biz paid me for it.

>>How do I account for this? I don't want to invoice her and charge her

>>sales tax on the printer (I'm a computer equip. reseller, btw). I just

>>want to transfer the cost to the other biz.

>>Any suggestions?

> Record the credit card purchase to a balance sheet account called Due from

> Wife's Biz. Record the check received from your wife's biz to the same

> account.

>>grep

Posted by foldem on July 20, 2007, 6:01 pm

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>Allow me to clear this stuff up a bit, since it's taken me quite some

>time to get back here:

>I'm a computer reseller, so you weren't insane to infer that I didn't

>pay sales tax on it. In this case, however, you'd be wrong. She needed a

>new printer, so I went to Office Depot and bought her one. I paid sales

>tax on it there. That's the reason for the question: I didn't want to

>pay sales tax on it twice. Not only that, but since I already paid sales

>tax, if she were to also pay sales tax, she would be paying it on top of

>the sales tax I already paid, bringing her tax amount to higher than the

>tax I already paid! Craziness...

>So that's what I was trying to get out of.

>Now I'm still not entirely sure I understand all your answers, but it

>certainly does give me what to think about.

Set up an account on your balance sheet called "Suspense".

When you buy something using your business card/check that should have
been personal/wife's Biz, book it to that account. When you receive the
reimbursement, book it to the Suspense account also.

You'll know that any balance in that account should be "investigated"
for why it wasn't cleared to zero. An easy reminder to take care of it.

Best,

Peter
--
http://zbigniew.pyrzqxgl.com/bargegeek.html
A+++ G++ PKR+ PEG- B+ TB ADB++ M
www.barge.org
"There are no strangers at BARGE, just friends we haven't met yet"

Posted by Scott on July 21, 2007, 9:55 am

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> Allow me to clear this stuff up a bit, since it's taken me quite some time

> to get back here:

> I'm a computer reseller, so you weren't insane to infer that I didn't pay

> sales tax on it. In this case, however, you'd be wrong. She needed a new

> printer, so I went to Office Depot and bought her one. I paid sales tax on

> it there. That's the reason for the question: I didn't want to pay sales

> tax on it twice. Not only that, but since I already paid sales tax, if she

> were to also pay sales tax, she would be paying it on top of the sales tax

> I already paid, bringing her tax amount to higher than the tax I already

> paid! Craziness...

> So that's what I was trying to get out of.

> Now I'm still not entirely sure I understand all your answers, but it

> certainly does give me what to think about.

> Thanks,

> grep

> Allan Martin wrote:

>>>I own two businesses: Mine, and my wife's (co-owner). Yesterday, my

>>>wife's biz needed a new printer, so I purchased one with my biz credit

>>>card. My wife's biz paid me for it.

>>>

>>>How do I account for this? I don't want to invoice her and charge her

>>>sales tax on the printer (I'm a computer equip. reseller, btw). I just

>>>want to transfer the cost to the other biz.

>>>

>>>Any suggestions?

>> Record the credit card purchase to a balance sheet account called Due

>> from Wife's Biz. Record the check received from your wife's biz to the

>> same account.

Set up a current or other asset account called "Due From <other company
name>" & run everything through that. Every time you pay for something that
belongs to the other company, use this account instead of an expense
account. When you receive reimbursements from the other company, use this
account instead of a revenue account. The amounts should wash.

Scott out.