How to calculate Sales Tax on all your orders.
When selling Pure Romance products, it’s important to charge the proper sales tax. The following guidelines will take out the guess work of determining the correct sales tax.
Sales Tax Rules:
- Do NOT charge more than you were charged. Ex. If you pay 7% for sales tax but the location of the sale pays 8%, you MUST charge the 7% you paid. The maximum amount of sales tax you can charge is what you paid.
- Do NOT charge more than the rate of where the sale is taking place. Do not charge more sales tax than what is allowed in the area, even if you paid more in sales tax. Ex. If you paid 7% in sales tax but the location of the sale only charges 6%, then you charge your customer 6% in sales tax EVEN THOUGH you paid more. You must charge the lower of the rate you paid to be compliant.
- You CANNOT charge sales tax if the item is exempt in that particular state or the state does not charge sales tax at all. Ex. Sales tax on clothing is exempt in the state of Pennsylvania. When selling any type of clothing in Pennsylvania, you cannot collect the sales tax on that item even though you paid sales tax when you originally made the purchase. You HAVE to adhere to the state’s laws. Ex. The state of Oregon does not have sales tax, so when selling product to customers in Oregon, you cannot charge sales tax.
- Calculate sales tax on the sale price of the item(s) after discounts/shipping & handling based on where the order takes place. For online sales, the sales tax should be based on where the order is being delivered.
How to Calculate Sales Tax Based Off the Sales Location:
Option 1: Enter the address into your COO under “My Parties.” (Preferred)
Step 1: Enter the location of the sale into ‘My Parties’ on your COO (My Business > My Parties > New Party)
Step 2: Enter the Hostess information and the location of the sale.
Step 3: Once you have entered the sales location, scroll down and hit “Order” next to your hostess’ name and add a product of your choice under “Item Entry”.
Step 4: With product in the cart, scroll to the bottom where it summarizes the Product Subtotal, Shipping, Discounts, and Tax. Hover your mouse over Tax to see the sales tax for the location of the sale.
Option 2: Quick Online Lookup. If you need to know the sales tax quickly, simply look it up online! Search the sales tax for the city, state, and/or county where the sale is taking place.
For this example, the Consultant lives in Cincinnati, Ohio and the location of the sale is in Florence, Kentucky. Even though the Consultant paid 7.8% for sales tax, they will charge their guests 6% sales tax since that is the sales tax where the sale is taking place.