"Use Tax" in 4.0 NA

DenSter

I have a question for the US people, or anybody else that knows. There is something called 'use tax', which is calculated on 'consumed' (not as in Navision consumption, but the real meaning of the word) goods. Any sales tax that was paid on the things (Items, resources, services) can be deducted from the use tax amount due.

It all seems to be connected with sales tax, but it's not. What I don't understand is that it apparently is not part of the standard NA version of Navision. Does anybody here know how this works, and does anybody here know of a solution, maybe an add-on that does this?

fb

It's already in there, but there are many subtleties...

There was an entire US training series (in the v3.10 time-frame) on Sales and Use Tax setup for US and Canada. I'd recommend you look around for that for a start.

DenSter

Do you have a copy of this material, or a link to it?

dmitrip

I've seen 'Use Tax' section in 'Financial Management US Localization for MBS-Navision 3.7'. There're couple words about Use Tax defenition and the set up in Navision.
Is it what you're looking for?

AEklund

Sales tax and use tax are very very similar. There are occasionally areas that do not have a use tax but do have a sales tax..

In general, if you have an office (e.g. directly do business) in the state its sales tax, and if you ship product to that state but don't have a local office there its use tax..

From a Navision point of view, it is sales tax, because a given location will charge only sales tax or only use tax but never both. If you load the right one into the tax tables, thats all you need.

themave

Use tax is the states way of collecting sales tax on items that where purchased without paying sales tax, that were purchase for internal use, and not resale.

so, if I am in California and I purchase off ebay an item for my company say a new server. I get it without paying any sales tax, I am supposed to :roll: calculate the amount of tax I should have paid and include that on my sales tax report when I remit my quarterly sales tax to the state of California.

Or if I purchase an item for inventory and it is resale so I don't pay sales tax on the item, if I end up using the item for something internally, say I resale training material for Navision, if I use one of the manuals in house, then I need to calculate the amount of sales tax I should have paid, and remit that to the state.

When the state comes in and does an audit, the first thing they ask for is copies of invoices for any assets purchased, they are making sure we paid tax on all those items.

Also if I buy something from Michigan from your company and you charge my %5 sales tax, I need to pay the state of California the difference of that tax and my local rate of 8.75%, so I would need to remit to the state of California the 3.75 % of sales tax I didn't pay to them as a use tax.



File a Use Tax Return

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Overview
The Board of Equalization (Board) wants to make it easy for you to report and pay use tax.

New for 2003 - For taxable years beginning on or after January 1, 2003, if you made a purchase from an out-of-state or Internet seller and did not pay California use tax, you may be eligible to report the California use tax on your personal income tax return.

Do I owe use tax?

You generally owe California use tax when you use, consume, give away or store tangible personal property (i.e., products you can see, weigh, feel or touch, such as clothing, books, computers, DVDs or CDs) in California that you purchased from an out-of-state vendor. If the out-of-state vendor does not collect the California tax on your purchase, you must pay the tax to the Board.

How do I pay the use tax?

If you are not required to hold a seller's permit, you may report the use tax on your California income tax return or on the use tax return in Publication 79B , California Use Tax. If you choose to report use tax on your income tax return, follow the instructions for the use tax line and complete the use tax worksheet to determine your use tax liability.
If you hold a California seller's permit, you must pay the use tax with your sales and use tax return. Report the amount of your purchase under "Purchases subject to use tax," (Line 2) on the tax return for the period that includes the date when you first used, stored, or consumed the item in California.
Persons or businesses that regularly incur use tax liabilities, but are not engaged in a business requiring a seller's permit, should arrange to receive Consumer Use Tax returns by applying for a Consumer Use Tax Account - BOE-400-CSU.
If you purchased a vehicle, vessel, aircraft, or mobile home, please review the frequently asked questions (FAQs) for Use Tax on Purchases of Vehicles, Vessels, Aircraft, and Mobile Homes. You will also find information on this page for reporting use tax on tangible personal property brought into the state through U.S. Customs.
What is the use tax rate in effect for my area?

The sales tax and use tax rates are the same. The rate of use tax is determined by where the property will be used, stored or consumed, regardless of where the sale takes place. For information on the tax rate of your area, click here or refer to Publication 71, California City and County Sales and Use Tax Rates. You may also request a copy of Publication 71 by calling the Board's Information Center at 800-400-7115.

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themave

On another little side note, with my personal tax return paper work that the state sends out, it has a section reminding people if they bought stuff off the internet and didn't pay sales tax, that they need to add it to the tax return and pay the use tax on your personal income tax return

http://www.boe.ca.gov/news/pdf/nr010504m.pdf