Sales tax on a custom cue?

S

scassidy77

AzB Silver Member
Silver Member
So i was getting ready to buy a cue from a custom cue maker and he gave me the price of the cue. I was ok with it. Then he said plus sales tax. So im thinking that he is just trying to pad the price a little.
I have never been charged sales tax by a custom cue maker. And I cannot imagine why anyone would voluntarily tell the government that they made a pool cue and sold it for profit and would like to pay 25 percent income tax on it.
Its one things for good and services that are trackable, but how many small time cue makers are actually claiming their cues as income and paying income tax on selling them.
Have any of you ever been asked to pay sales tax on a custom cue before? Im just trying to figure out if its common or this guy is trying to pocket the sales tax charge...
 
Occasionally…..It is a business…..inventory records, accounts payable and receivable, overhead, accounting, tax reporting, payroll with tax withholding & reporting….This is the real business world of cue making. You aren’t buying a cue at a garage sale or from an individual selling a pool cue. Nonetheless, ever buy anything on eBay that now adds state sales tax as required for sellers and buyers?

If the seller is exempt, sales tax can be omitted but otherwise tax gets added. So yes, it is not uncommon but some cue makers don’t have to if they paid sales tax when acquiring all the materials (inventory) they use in making your pool cue. In that case, the cue sale could legally qualify as a lump sum contract or sale. So a cue maker can avoid having to add sales tax since it would result in paying tax twice since it was already paid buying the various materials to build/ repair a cue/shaft.
 
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scassidy77 said:
So i was getting ready to buy a cue from a custom cue maker and he gave me the price of the cue. I was ok with it. Then he said plus sales tax. So im thinking that he is just trying to pad the price a little.
I have never been charged sales tax by a custom cue maker. And I cannot imagine why anyone would voluntarily tell the government that they made a pool cue and sold it for profit and would like to pay 25 percent income tax on it.
Its one things for good and services that are trackable, but how many small time cue makers are actually claiming their cues as income and paying income tax on selling them.
Have any of you ever been asked to pay sales tax on a custom cue before? Im just trying to figure out if its common or this guy is trying to pocket the sales tax charge...
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The gentleman is in business, he may even be paying social security to meet the requirement. Not everyone is ok with cutting the government out of taxes, I also charged tax on my custom cues and repair work in my shop. I would pay the tax myself for online sales thought.
 
scassidy77 said:
So i was getting ready to buy a cue from a custom cue maker and he gave me the price of the cue. I was ok with it. Then he said plus sales tax. So im thinking that he is just trying to pad the price a little.
I have never been charged sales tax by a custom cue maker. And I cannot imagine why anyone would voluntarily tell the government that they made a pool cue and sold it for profit and would like to pay 25 percent income tax on it.
Its one things for good and services that are trackable, but how many small time cue makers are actually claiming their cues as income and paying income tax on selling them.
Have any of you ever been asked to pay sales tax on a custom cue before? Im just trying to figure out if its common or this guy is trying to pocket the sales tax charge...
Click to expand...
are you a resident of the cue maker's state?
 
manwon said:
Sales tax is a state requirement, and income tax is federal. If the cue maker has a business license, he must collect sales tax and in most cases make quarterly payments to the state.
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With the exception of a few states, income tax is also state, in addition to federal. I've always paid just a certain amount for a cue, and I think the maker just calculated his federal, state, and sales tax himself.
 
muskyed said:
Sales tax isn't income tax. Two separate things. You are trying to mix one with the other.
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What is your point? The 5 NOMAD states have zero sales tax but it has no impact on federal income tax reporting.

Cue makers doing business as lump sum sales simplify things but obviously drive up their cost of goods. Income
generated of any type for a business must be accounted for and that translates into P&L statements. All of this
ultimately comes back to the basic issue. A business enterprise has to file annual tax returns and avoiding to pay tax of any type is seriously frowned upon by state and federal tax authorities that love to penalize and prosecute violators.
 
Bavafongoul said:
Occasionally…..It is a business…..inventory records, accounts payable and receivable, overhead, accounting, tax reporting, payroll with tax withholding & reporting….This is the real business world of cue making. You aren’t buying a cue at a garage sale or from an individual selling a pool cue. Nonetheless, ever buy anything on eBay that now adds state sales tax as required for sellers and buyers?

If the seller is exempt, sales tax can be omitted but otherwise tax gets added. So yes, it is not uncommon but some cue makers don’t have to if they paid sales tax when acquiring all the materials (inventory) they use in making your pool cue. In that case, the cue sale could legally qualify as a lump sum contract or sale. So a cue maker can avoid having to add sales tax since doing so would result in double taxation.
Click to expand...

muskyed said:
Sales tax isn't income tax. Two separate things. You are trying to mix one with the other.
Click to expand...
If you charge sale tax on an item, then you are also required to pay income tax for any profits made on that transaction as well. If you are charging sales tax to a consumer and then not reporting the income made on the sale to the IRS then that is illegal.
So if you do 1, then you got to do the other.
 
The thing with sales tax is, your tax number makes you an agent of the state to collect (Their) tax. In other words you are not paying the tax, it is their money the second you collect it. If you fail to send them their money it is treated as a thieft. It is at no time your money to spend and you will be prosecuted.
 
scassidy77 said:
So i was getting ready to buy a cue from a custom cue maker and he gave me the price of the cue. I was ok with it. Then he said plus sales tax. So im thinking that he is just trying to pad the price a little.
I have never been charged sales tax by a custom cue maker. And I cannot imagine why anyone would voluntarily tell the government that they made a pool cue and sold it for profit and would like to pay 25 percent income tax on it.
Its one things for good and services that are trackable, but how many small time cue makers are actually claiming their cues as income and paying income tax on selling them.
Have any of you ever been asked to pay sales tax on a custom cue before? Im just trying to figure out if its common or this guy is trying to pocket the sales tax charge...
Click to expand...
It's not universal but it's not uncommon. Many will just figure it into the price.
 
The key to all of this is how will you pay for your cue? Any form of payment other than cash itself is traceable to the cue maker- so there you go.
Some forms of payment like Pay Pal F&F may not be reported to the IRS - but in a full income audit situation - the entire PAy Pal account of a seller can be audited and a pattern of F&F payments not reported for goods sold would be considered income and possibly fraud - even worse for the seller.
I know guys that have been jailed for income tax fraud for masking payments on a large scale.
 
mikemosconi said:
The key to all of this is how will you pay for your cue? Any form of payment other than cash itself is traceable to the cue maker- so there you go.
Some forms of payment like Pay Pal F&F may not be reported to the IRS - but in a full income audit situation - the entire PAy Pal account of a seller can be audited and a pattern of F&F payments not reported for goods sold would be considered income and possibly fraud - even worse for the seller.
I know guys that have been jailed for income tax fraud for masking payments on a large scale.
Click to expand...
Almost every form of payment now reports.
 
Believe it or not, but making and repairing cues is a job and some people have it as their full time gig as well. The cue maker in question probably has his business as a LLC and it's simply better and safer to do things on the up and up in the long run. I'm not super familiar with the LLC rules in America, but over here, there are certain benefits in terms of write offs, investing in your business, the possibility to take out a loan as a business, that does not go after you personally if things go wrong and so on, I'm certain there's very similar rules in USA.
 
A bit off topic , lot of cue makers who work from home are probably not licensed, insured or properly zoned. If they managed to burn their house down say spraying finish or something, Insurance may not want to pay due to running an illegal business out of the house. Over time they will have created a pretty good paper trail as to what they have been doing.
 
once he sends it in the mail to a tax state then he is on the hook and you pay by card or check. why should he risk things for you.

and you pay sales tax on almost everything else you buy.
 
middleofnowhere said:
A bit off topic , lot of cue makers who work from home are probably not licensed, insured or properly zoned. If they managed to burn their house down say spraying finish or something, Insurance may not want to pay due to running an illegal business out of the house. Over time they will have created a pretty good paper trail as to what they have been doing.
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There was a guy here in Okla. running a home gun shop. He was 'mis/under insured' to say the least. Luckily he was out in the country but he lost it all when he had the fire. Took three hours to put it out because of all the ammo and powder for reloading cookin off.
 
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