[Jewelry making - Article 00058] - Re: [Orchid] Wholesale Companies

[Alden & Glenda Blood]

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  Hello Carrie:

    I am also in Kentucky.  One aspect of this thread that has had only
    a few mentions is the issue of "Use Tax".   I have worked in Texas
    and Louisiana. and Use Tax is paid in those states also.  Use tax is
    paid at the same rate as sales tax (6 percent in Kentucky) for all
    the materials you buy that are necessary for your work and the
    operation of the business, but that are not sold to the customer. 
    This includes tools, cleaning agents, abrasives, buffs, books, sales
    invoices, computer supplies, office supplies, etc.  Sales tax is
    collected only on the materials used in repair jobs, but must be
    listed separately from labor. A piece made new from raw materials,
    or a piece that has had a major modification requires that sales tax
    be charged on the selling price, which includes labor and materials
    as well as mark-up.  Re-tipping, re-pronging, re-sizing and
    re-setting a stone, etc.  require sales tax to be paid only on the
    material used if any. The labor must be clearly listed separately as
    labor and sales tax is not charged on that.  You don't pay taxes on
    materials purchased which are intended for sales unless you use it
    for personal use in some way.   All this, of course, requires some
    carefully maintained records with invoices, etc.  It took me quite a
    while to come to grips with the Use Tax concept.  Use tax must be
    paid no matter which state you buy the materials from.  If you did
    not pay local sales tax when you bought the material then you must
    pay the tax as a use tax on your sales/use tax report.  However, you
    do not collect sales tax on work shipped out of state.  You must
    have good records of the shipment showing the out of state
    destination, the shipper, etc. 

Captain Blood
"Marlinespike Seamanship in Precious Metals"
mariner AT tgtel.com



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