Category : Financial and Statistics
Archive   : SBADV934.ZIP
Filename : F265.SBE

@109 CHAP 11
@CODE: HI NM
@CODE:EN

ÚÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ¿
³ SALES AND USE TAXES (IN GENERAL) ³
ÀÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÙ

The Three Golden Rules of Governance:

1. If it moves, tax it.
2. If it's big, regulate it.
3. If it's really huge, subsidize it.

@CODE: OR AK MT NH DE
@STATE doesn't impose a sales or use tax.

Accordingly, the following general discussion of
sales and use taxes will be of interest to your
company based in @STATE only if you also
operate in other states.

____________________________________________________________

@CODE:OF
@CODE: OR
(NOTE: Oregon voters will decide, on November 9, 1993,
whether or not to impose a new 5% Oregon sales tax, begin-
ning on May 1, 1994.)

@CODE:OF
With a limited number of exceptions, every business that
will sell tangible personal property (such as merchandise)
to customers must obtain a seller's permit from the state
sales tax agency. A separate permit may be necessary for
each place of business where property subject to tax is
sold. In many states, certain kinds of services are also
subject to sales tax.

@IF150xx]NOTE REGARDING @NAME:
@IF150xx]------------------------------------------------------------
@IF150xx]Because you are in a retail business, your firm will need to
@IF150xx]be cognizant of sales tax laws and regulations in each state
@IF150xx]in which you do business, from day one.
@IF150xx]------------------------------------------------------------
@IF150xx]
In general, as a wholesaler (or manufacturer) you will not
have to collect sales tax on goods you sell to a retailer
for resale, if the retailer holds a valid seller's permit
and provides you a "resale certificate" in connection with
the transaction. Likewise, if your business, as a retail-
er, buys goods for resale, you need not pay sales tax to
the wholesalers if you provide them with resale certifi-
cates.

@IF151xx]@NAME is in the wholesale business.
@IF151xx]
@IF151xx]Accordingly, you need to be particularly familiar with the
@IF151xx]sales tax rules and regulations in each state where your
@IF151xx]firm does business; and particularly with regard to "resale
@IF151xx]certificates."
@IF151xx]
While the sales tax generally applies to the sale or rental
of tangible personal property (other than for resale) with-
in the state, a "use tax" or compensating tax, applies to
the storage, use or other consumption of such property pur-
chased from a retailer for such storage, use or consumption.
The use tax generally applies to purchases made OUTSIDE the
state for use within the state. The use tax also applies,
generally, when a retailer buys goods ex-tax (for resale),
and instead uses or consumes some of the goods rather than
selling them.

Note that if you sell across state lines to customers in
states where you have no offices, employees or other pres-
ence, the sale is usually not subject to sales tax in ei-
ther state, since it is an interstate sale. However, tech-
nically, such sales are subject to "use tax" (which is sort
of a "shadow" of the sales tax, which applies where the
sales tax doesn't in most states) in the customer's state.
The U.S. Supreme Court and other courts generally have not
supported attempts of the various states to force out-of-
state retailers to collect use tax on mail order or other
sales made to residents of the taxing state, so that most
mail order firms tend to treat such interstate sales as
being tax-free, or tell the customers that it is up to
them to report the purchase and pay the use tax (which
they almost never do).

However, in just the last few years, many states have en-
acted new and broader sales and use tax laws that attempted
to require out-of-state retailers who advertise in the local
media or send substantial amounts of direct mail/catalog
solicitations into the state to register as retailers sub-
ject to sales or use tax in the state, treating such di-
rect sales as taxable. Some states have aggressively en-
forced these new laws, which would definitely begin to cramp
the style of many mail order firms if these laws stand up in
court.

BOTTOM LINE: Don't assume that such interstate sales are
still "sales tax-free," at least in many states. (A
Tennessee law even imposes use tax on free mail order cat-
alogs shipped into the state, whether or not any sale is
made!)

RECENT UPDATE: Just recently, the U.S. Supreme Court has
ruled, in the case of Quill Corp. v. North Dakota (1992),
that a state may not force out-of-state mail order retail-
ers to collect use tax on sales to residents of the state,
where the company had no presence in the state, under the
U.S. Constitution. Thus, it appears that many of the broad
new mail order use tax laws, targeted to hit mail order
firms, which have been adopted in some 34 states in recent
years, are now invalid. While this is good news for mail
order retailers, the bad news is that the court also indi-
cated in its decision that Congress could, if it chooses
to do so, constitutionally enact legislation that would
permit the states to require use tax collection on mail
order and similar sales by out-of-state retailers. Expect
something along these lines to be passed in the next year
or two, now that the November, 1992 election is behind us.
But at least, if a federal law authorizing such use tax col-
lections is enacted, it is likely to provide some exemption
for smaller retailers and a simplified, state-wide tax rate
and payment method for sellers with only minimal sales in
each of a number of states. Or so we fervently hope....
(Otherwise, small mail order sellers like yours truly will
instantly be forced out of business, due to the impossible
complexity and cost of filing sales or use tax returns for
every state and local taxing district where a sale is made!

@CODE: CA
ÚÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ¿
³ CALIFORNIA SALES AND USE TAX LAW ³
ÀÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÙ

California requires virtually every business that will sell
tangible personal property (even wholesalers) to obtain a
seller's permit from the state Board of Equalization office
nearest the place of business. A separate permit is re-
quired for each place of business where goods subject to
tax are sold. To obtain a permit, it is necessary to sub-
mit a completed registration form, Form BT-400 or BT-403.
There is no fee for obtaining a permit, but you may be re-
quired to post a bond as security for payment of tax.

However, the State Board of Equalization has recently
dropped the requirement that most new businesses regis-
tering for the sales tax post a deposit (except for re-
tailers who have established a poor record of paying sales
tax to the state). In the past, most new businesses in
California were required to post a bond or deposit to-
talling 3 times their estimated monthly sales tax col-
lection (up to $10,000). Dropping this requirement is in-
tended to lower one barrier to the creation of new small
businesses.

Sales tax rates in California range from 7.25% in most ru-
ral counties to as high as 8.25% in some of the urban coun-
ties, such as Alameda and Santa Clara counties, and San
Francisco voters approved an additional 0.25% sales tax in-
crease, effective February 1, 1992, expiring on June 30,
1993. This raised the sales tax rate until 6-30-93 to 8.5%
in San Francisco (City and County), the highest in the
state of California. San Francisco voters, in a special
election held on June 15, 1993, voted to extend the 0.25%
permanently. The legislature has changed state law to
allow San Francisco to permit the additional 0.25% tax
(in which case the total rate would once again be 8.5% in
San Francisco, beginning October 1, 1993).

(NOTE: The 0.5% statewide sales tax, scheduled to expire
June 30, 1993, was extended by the legislature to January
1, 1994.)

Numerous types of transactions and categories of property
are exempt from the tax. Perhaps the main type of exempt
property is food (although this exemption does not apply to
restaurant sales or to liquor). One-half of one percent of
the current state wide sales tax rate (after July 15, 1991)
is theoretically "temporary," but we suggest that not hold
your breath waiting for this temporary tax to expire on
June 30, 1993, in view of the state government's critical
fiscal condition. A bill has passed the state legislature
in June, 1993, to extend (to December 31, 1993) the state-
wide 1/2% tax that was due to expire June 30, 1993. The
bill is awaiting action by Governor Wilson, to either sign
or veto it.

California sales and use tax returns usually must be filed
and tax paid within one month after the end of each calen-
dar quarter, although larger businesses may be required to
make more frequent payments of tax.

Note that a new and simplified sales and use tax return
(Form BT-401-EZ) is now available and may be filed if a
business:

. operates from a single location in the county;

. doesn't sell fuel, autos, boats or aircraft or
make sales to aircraft common carriers;

. doesn't claim credit for sales tax paid to other
states;

. doesn't engage in fixed-price contracts or leases;
and

. claims no exemptions for returned merchandise, tax-
paid purchases that are resold, cash discounts, bad
debts, or other exempt transactions that are not
provided for on the simplified form.

@CODE:EN

(NOTE: Not every state has a sales and use tax law.
Oregon, Montana, Alaska, Delaware and New Hampshire do
not. However, there is a sales tax in @STATE.)

@CODE: DC
The general sales and use tax rate in D.C. is 6% of retail
sales for sales or rentals, or for storage, use or consump-
tion of tangible personal property, including prepared
food and drink and materials used to repair or alter real
property. In addition there are special sales tax rates
that apply to transient accommodations, prepared food and
drink, alcoholic drinks sold for on-premises use, and for
rental vehicles and trailers.

D.C. sales tax also applies to certain services, including:

. The production, fabrication, or printing of tangible
personal property on special order;

. fuel and utility services;

. repairing, altering, or fitting tangible personal
property, or applying and installing same as repair
or replacement parts of other tangible personal
property;

. duplicating, copying, addressing and mailing services,
and public stenographic services;

. commercial textile rentals that include recurring
laundering or cleaning service;

. real property maintenance and landscaping services;

. data processing and information services;

. parking, storing or keeping motor vehicles or
trailers; and

. local telephone service.

Persons selling taxable property or services at retail and
persons buying taxable property for resale or other nontax-
able purposes are required to first obtain a certificate of
registration from the Department of Finance and Revenue.

@CODE:EN
@CODE: LS
300 percent. Take it or leave it.

@CODE:EN

The general statewide sales/use tax rate in @STATE is:
@CODE: CO
3 percent. Denver has a 3.5% sales and use tax rate, plus
a 0.6% Regional Transportation District Sales Tax. While
city and county sales and use taxes are generally collected
by the state, you must report and remit local taxes to
Denver and other "home rule" cities.

Sellers must register to obtain a Colorado sales tax li-
cense, for which there is a $16 fee (which must be renewed
every 2 years), plus a $50 tax prepayment or deposit.

@CODE:OF
@CODE: WY
4 percent, effective July 1, 1993 (formerly, 3%). The rate
is scheduled to revert to 3% on July 1, 1996. Wyoming coun-
ties impose sales and use taxes at 1% or 2% (administered
by the state) on retail sales of tangible personal property,
admissions and services, and counties or localities within
counties are also authorized to levy an extra 1% or 2% lod-
ging tax.

Vendors must register and obtain a sales tax license in
order to do business in Wyoming, and are required to make
a tax prepayment of $150 at such time.

@CODE:OF
@CODE: VA
3.5 percent. In addition, every county and city levies
a 1% local sales and use tax, administered and collected
by the State Department of Taxation along with the state
sales and use tax.

Sellers must obtain a certificate of registration from the
Tax Commissioner in order to engage in a taxable business,
one for each place of business. There is no fee for the
registration.

@CODE:OF
@CODE: AL GA LA MI NY NC SD
4 percent.

@CODE:OF
@CODE: AL
Many Alabama counties, cities and towns also impose sales
and use taxes, most of which are collected along with the
state sales tax. Sellers must obtain an annual sales tax
license (no fee) from the Department of Revenue.

Alabama is the only state which exempts "canned" (non-
custom, off-the-shelf) computer software from sales tax.

@CODE:OF
@CODE: GA
Counties and cities in Georgia impose a 1% local-option
sales and use tax, and counties can also adopt a 1% Special
County Sales-Use Tax. In addition, in the Atlanta area,
Fulton and DeKalb Counties levy a 1% rapid transit district
sales and use tax.

Retailers must apply to the State Revenue Commissioner for
a certificate of registration for each place of business in
Georgia. There is no fee for registration.

@CODE:OF
@CODE: LA
In addition, local sales taxes are imposed at the parish
and municipality levels, and by school boards, at rates up
to 4% (5% in New Orleans), which is added to the state
sales tax. There is also a 10% tax on hotel and motel
room rentals in the city of New Orleans.

Sellers and auctioneers are required to register with the
Department of Revenue and Taxation.

@CODE:OF
@CODE: MI
In a special election held June 2, 1993, Michigan voters
decided NOT to increase the state sales and use tax rate
from 4% to 6%.

There are no local sales taxes in Michigan. However, in
addition to the state sales tax, Michigan also imposes a
2.35% value-added tax, misnamed the "Single Business Tax"
(since there are also sales and use taxes, property taxes,
an individual income tax, and other taxes on businesses in
the state of Michigan). The value-added tax, which applies
to all but relatively small businesses, is sort of a cross
between an income tax and a sales tax, with many deductions
allowed, except for some of the more important ones, like
wages and interest expense.

Sellers must register for a sales tax license with the
Revenue Division of the Michigan Department of Treasury.
Licenses expire annually on June 30 and can be renewed for
a $1.00 fee.

@CODE:OF
@CODE: NY
Localities are also allowed to impose sales and use taxes
of 1% to 3% (4% in some areas). The total rate in New York
City is 8.25%, consisting of the 4% state rate, a 4% local
tax, and a 1/4% Metropolitan Transit tax.

Sellers are required to register and obtain sales tax cer-
tificates of authority from the Department of Taxation and
finance within 20 days of starting business, generally.

Sellers are generally required to file quarterly sales tax
returns (Form ST-100), and monthly returns (for the first 2
months of each quarter, on Form ST-810) if taxable gross re-
ceipts were $300,000 or more in any of the four preceding
quarters. Permission to file annual returns only (Form
ST-101) may be granted for some firms with under $250 tax
liability.

@CODE:OF
@CODE: NC
Various classes of taxable items are subject to tax at re-
duced rates of 1%, 2% or 3%, and most such items are fully
exempted from the 1% local option (county) sales taxes.
Certain of such items also have a maximum sales tax amount
per item, such as $80 on certain farm equipment.

Sellers are required to register with the Sales and Use Tax
Division of the State Department of Revenue and obtain a
sales tax identification number.

@CODE:OF
@CODE: SD
The South Dakota sales tax is quite broad, as it applies to
gross receipts from most kinds of service businesses, ex-
cept certain exempted services, such as health and educa-
tional services. (Wages paid to an employee are also exempt.)
Sales tax also applies to sectional homes, which are pre-
built homes for placement on foundations, not mobile homes.

While the general state sales tax rate is 4%, a 3% rate
applies to farm machinery and irrigation equipment, oil and
gas field services, and gross receipts from amusement de-
vices. A 2% tax applies to gross receipts of contractors
engaged in real estate improvement contracts, in addition
to the retail sales tax.

In addition to the state sales tax, cities and towns can
impose local sales taxes of up to 2%, and a number of cities
also impose lodging taxes at rates of 2% to 3%.

A seller is required to obtain a sales tax permit from the
Department of Revenue for each place of business. No fee is
charged for the permit.

@CODE:OF
@CODE: MO
4.225 percent (plus a local use tax of 1.5%, making the
total use tax rate 5.725% after June 30, 1992 -- Missouri
is the only state with a use tax rate that differs from the
sales tax rate).

A number of Missouri cities and counties also have local
sales taxes. City rates are generally 1%, while county
rates are mostly 1/2%. The local taxes are also collected
and administered by the Missouri Department of Revenue.

Persons responsible for collecting the sales tax must reg-
ister for a retail sales tax license with the Department of
Revenue. There is no registration fee, but a bond must be
posted. Anyone purchasing a business must notify the
Department of Revenue, and must obtain a Certificate of
No Tax Due from the seller, or withhold any such tax as
is due from the purchase price of the business.

@CODE:OF
@CODE: KS
4.9 percent, effective June 1, 1992. Many cities and
counties also impose sales taxes of 1/2 or 1%, which are
administered and collected along with the state sales tax
by the Kansas Department of Revenue. The tax applies to a
number of kinds of services, including drycleaners, laund-
ries, carwashes, cable and other subscriber radio and TV
services.

Retailers and persons selling taxable services are required
to obtain a sales tax registration certificate for each
place of business. No fee is charged for the certificates,
which must be displayed at your place of business.

@CODE:OF
@CODE: AR
4.5 percent. Arkansas voters will decide in the November,
1994 election on an increase in the sales and use tax rate
to 4.625%, which, if approved, would go into effect on July
1, 1995.

The state also allows city and county governments to levy
sales and use taxes at a 1% rate (2% in a few localities).
The local sales taxes are generally collected with the
state tax, by the Arkansas State Department of Finance and
Administration. Certain border cities that are divided by
the state line are permitted to impose an additional 1%
sales tax.

Recent (December, 1992) Arkansas tax legislation has great-
ly expanded the sales tax, to cover a wide range of previ-
ously nontaxable services, such as cleaning or janitorial
work, pool services, lawn care, landscaping, auto parking
and storage, and others, beginning March 1, 1993.

Businesses that are required to collect sales tax must ob-
tain a Gross Receipts Permit from the Commissioner of
Revenue, in order to do business in Arkansas. A separate
permit is required for each location, and a $250 deposit
is required.

@CODE:OF
@CODE: OK
4.5 percent. Cities and counties also impose sales and use
taxes, which are collected by the State Tax Commission.
Most vendors, other than those who only occasionally make
sales subject to tax, or who are located outside the state
but solicit sales in Oklahoma via newpaper or radio/TV
advertising or mail order, are required to obtain a sales
tax permit from the State Tax Commission. A separate
permit is required for each place of business. The cost
of the first permit is $20 and each additional one costs
$10. All such permits expire after 3 years

@CODE:OF
@CODE: AZ ID IN NB ND OH SC MD MA UT WS
5 percent.

@CODE:OF
@CODE: UT
In addition, Utah localities impose a 1% local sales/use tax.

Utah sales tax applies to retail sales of tangible personal
property and also to certain services, such as repairs, re-
novations, cleaning or washing of tangible personal property
or installing tangible personal property in connection with
other such property, as well as to laundry and dry cleaning
services and certain utility services. The Utah State Tax
Commission administers the sales and use taxes.

Wholesalers or persons required to collect sales tax must
first obtain a sales tax license from the Tax Commission
before engaging in business in Utah, and a separate license
is required for each place of business. Use tax registra-
tion is required for retailers who sell tangible personal
property for storage, use or other consumption in Utah
and must provide detailed information on their activities
within the state to the Tax Commission.

@CODE:OF
@CODE: AZ
Many Arizona towns and cities impose local sales taxes,
which are also collected by the State Department of Revenue,
along with the state sales tax (known as the transaction
privilege tax). In addition to taxing retail sales of
tangible personal property, Arizona also imposes the trans-
action privilege tax on certain activities that would not
usually be subject to sales tax in other states, such as
commercial lease rents, job printing, and owner-builder
sales of improved real property.

Persons subject to the tax, including landlords and sellers
of tangible personal property, must register and obtain a
privilege license before engaging in business. Licenses
are obtained from the Department of Revenue, and a $12 fee
must accompany the application form. A separate license is
required for each place of business, and the state may re-
quire applicants to post a surety bond in order to obtain
the license.

@CODE:OF
@CODE: ID
There are generally no local sales taxes in the state, but
certain resort cities have limited authority to adopt local
sales taxes to finance tourist development.

Anyone who wishes to engage in business as a seller within
the state of Idaho must file with the Idaho Tax Commission
an application for a seller's permit. A separate permit is
required for each place of business. There is no charge
for the issuance of sellers' permits.

Any person who makes 2 or more retail sales during any 12
month period is considered a "retailer" under Idaho law,
and is required to collect the sales and use tax from
customers.

@CODE:OF
@CODE: OH
Recent Ohio legislation has extended the scope of the sales
tax (effective in 1993) to include the following services:

. building maintenance and janitorial services;

. employment services and employment placement services;

. exterminating services; and

. physical fitness facility services and recreation and
sports club services.

@CODE:OF
@CODE: VT
5 percent from September 1, 1993 until June 30, 1995, and
4 percent thereafter.

@CODE:OF
@CODE: IA
5 percent, effective July 1, 1992 (4% previously).

@CODE:OF
@CODE: TN
6 percent. Tennessee has also recently enacted a separate
tax on certain types of services, of 6.75%, repealing the
sales tax on such services.

@CODE:OF
@CODE: FL
6 percent. Effective since September 1, 1992, the sales
tax is also imposed on detective, burglar protection and
other protective services, and on nonresidential cleaning
and pest control services. The sales tax also applies to
certain rentals of real estate, with a number of major ex-
emptions, including rental of residences.

Florida law imposes a sales tax on mail order sales, but
the state's ability to enforce this law is doubtful, in
light of the Supreme Court's recent decision in the case
of Quill Corp. v. North Dakota (1992).

Counties in Florida may impose local transit taxes and con-
vention and tourist development taxes on hotel accommoda-
tions, and may also adopt local sales taxes for specified
periods. Cities and towns also are authorized to impose
municipal resort taxes. Local taxes generally range from
1 to 3 percent, in addition to the statewide tax of 6%

Sales and use taxes are administered by the Florida Depart-
ment of Revenue. Persons engaging in a business subject to
tax must apply to the Department of Revenue for a certifi-
cate of registration for each place of business, for a fee
of $5. An additional fee of $25 or $50 applies if the prior
year's sales or purchases were over $30,000 or $200,000,
respectively. Sales tax returns are due monthly, by the
20th day of the month. (Quarterly or semi-annual filing
may be permitted for small firms, where the tax remitted
for the last quarter or past 6 months wasn't in excess of
$100 or $200, respectively.)

@CODE:OF
@CODE: CT KY WV PA
6 percent.

@CODE:OF
@CODE: PA
The Pennsylvania sales and use tax, administered by the
state's Department of Revenue, generally applies not only
to sales of tangible personal property, but also to intra-
state communications, restaurant meals, hotel occupancy,
food sold through vending machines, and certain kinds of
specified services relating to tangible personal property.
Taxable services include (among others):

. lobbying;

. collection and credit reporting services;

. pest control and building maintenance services;

. employment services;

. secretarial or editing services;

. computer-related services, including programming; and

. lawn care.

There are no local sales or use taxes in Pennsylvania.

Persons who maintain a place of business in the state and
who sell or lease items subject to tax are required to ob-
tain a sales tax license from the Pennsylvania Department
of Revenue before beginning business. A license is issued
for the principal place of business, if a seller has more
than one place of business in Pennsylvania.

Sales tax returns are due monthly, by the 20th day of the
following month, for sellers whose tax was $600 or more for
the third quarter of the preceding year. Smaller firms may
file quarterly, semi-annual, or annual returns.

@CODE:OF
@CODE: ME
6 percent. (The rate was scheduled to drop to 5%, effective
July 1, 1993, but has been extended indefinitely at the 6%
rate.)

@CODE:OF
@CODE: MN
6 percent (after temporarily being 6.5% between July 1,
1991 and December 31, 1991).

@CODE:OF
@CODE: IL
6.25%. The Illinois sales and use taxes include a service
occupation tax. While services, per se, are not taxable,
service persons are liable for tax on any tangible personal
property that is transferred as an incident to the retail
sale of services by such persons. In general, if the mer-
chandise transferred to customers is under 35% of total
receipts from the sale of services, the service person can
continue to pay sales tax to his or her suppliers, and need
not register as a retailer nor pay the tax directly to the
state. If the merchandise is 35% or more of total receipts
from sales of services, the service person can buy the
merchandise from suppliers tax-free (for resale), but must
register and pay (and collect) sales tax on the merchandise
transferred to customers incidental to its services.

Sales tax applies to the rental of automobiles, but generally
not to other leased property, unlike nearly all other states.
Food sold for off-premises consumption and prescription drugs
are taxed at a reduced tax rate of 1%.

Local sales and use taxes are also imposed, and are collec-
ted by the Department of Revenue along with the state tax.
Some localities impose a hotel operators' occupation tax,
as well.

Retailers and service persons required to register as sel-
lers must do so and post a bond or other security in an
amount set by the Illinois Department of Revenue. There is
no charge for the registration certificate.

@CODE:OF
@CODE: TX
6.25%. The Texas sales tax applies not only to sales of
tangible personal property, but also to a wide range of
services, including amusements, cable TV, various personal
services, vehicle parking, repairs services, debt collec-
tion, credit reporting, telecommunications, information
services, and real property services such as landscaping,
lawn care, janitorial and structural pest control services.

A number of Texas cities also impose local sales and use
tax, in addition to the special sales taxes that are col-
lected in certain metropolitan transit areas to finance
mass transit.

All of the foregoing state and local sales and use taxes are
administered by the Texas Comptroller of Public Accounts.
Any person wishing to do business as a seller in Texas must
file an application for a sales tax permit with the Comptrol-
ler. A permit is required for each place of business. No
charge is made for obtaining a permit. In general, although
certain occasional or "casual" sales may be exempt from sales
tax, anyone who makes two or more sales of taxable items in
a 12-month period is considered a "seller" and must collect
sales tax.

@CODE:OF
@CODE: NV
5.75% (6.5%, effective October 1, 1991).

@CODE:OF
@CODE: WA
6.5% (8.2%, counting local taxes, in the Seattle area). At
present, the Washington sales and use tax applies mainly to
retail sales or leases of tangible personal property, food
and drink, amusements and entertainment, room rentals, and
to certain services.

------------------------------------------------------------
CAUTION: Due to the state's budget crunch, the state legis-
lature, in June, 1993, has passed new legislation expanding
the coverage of the Washington sales tax to a wider range
of services. Thus the following discussion may already be
out of date by the time you read this. For example, the
sales tax would be extended to numerous new service occupa-
tions, such as landscape and horticultural maintenance,
massage services, physical fitness services, and dating
services, to name a few, effective July 1, 1993, if the
bill is signed into law by Governor Lowry.
------------------------------------------------------------

Services that are currently taxable include:

. any kind of charge for cleaning, repairing, altering,
improving, installing or imprinting tangible personal
property of or for consumers;

. cleaning, fumigating, demolishing, or moving buildings
(but not janitorial services);

. constructing, repairing, decorating or improving
buildings;

. miscellaneous services such as credit reporting, ab-
stract title insurance, and auto storage or parking;

. telephone services; and

. various other kinds of services.

Cities and counties in Washington impose uniformly adminis-
tered local sales taxes that vary by locality. King County
also levies a special excise tax on lodgings, except for
facilities with less than 60 units or for continuous occu-
pancy of one month or more. The lodgings tax rate is 6% in
Seattle, 5.4% in Bellevue, and 2.4% elsewhere in King County.
Other counties are also authorized to levy such a tax.

Every person who engages in business in Washington as a sel-
ler is required to register with the Department of Revenue
and to pay a registration fee of $15. The certificate of
registration remains valid so long as you stay in the busi-
ness and pay tax to the state.

@CODE:OF
@CODE: MS
7 percent.

@CODE:OF
@CODE: NJ
6%, a decrease from the 7% rate that applied until July 1,
1992. Atlantic City has a combined city and state tax rate
on certain items, such as room rentals, alcohol sold by the
drink, cover charges, beach equipment and admissions, that
can't exceed 12%. Otherwise, local sales and use taxes are
not generally imposed. Advertising services are subject to
sales tax, although most other kinds of services are not.

Sales taxes are collected and administered by the Division
of Taxation in the New Jersey Department of Treasury. All
vendors are required to register with the Division of
Taxation within three days of starting a business, and must
obtain a Certificate of Authority (form ST-2) for each place
of business. Applications for registration must be filed
on form CIS 1. No fee is charged.

@CODE:OF
@CODE: RI
7 percent. (A scheduled reduction of this rate in 1991 and
1992 was repealed.) An additional 5% tax applies to tran-
sient room rentals. The tax does not apply to persons per-
forming services.

Localities in Rhode Island do not impose sales and use taxes.

The state sales and use taxes in Rhode Island are adminis-
tered by the State Tax Administrator.

Tax applies to the rental of living quarters in any hotel,
rooming house or tourist camp. The tax doesn't apply to
persons who have a written lease that covers a rental period
of 12 months or more.

Anyone who wishes to sell at retail or rent living quarters
in the state must apply to the State Tax Administrator for
a permit for each place of business, and pay a $5 fee for
each permit.

Sales and use tax returns are generally required monthly,
by the 20th day of the following month.

@CODE:OF
@CODE: AL AZ AR CO CT FL GA ID IL IN IA KS KY LA ME MD MA MI MN MS MO NB NV NJ NY NC ND OH OK PA RI SC SD TN TX UT VT VA WA WV WS WY
@CODE:NF
Some of the major categories of goods and services that are
subject to sales or use tax in @STATE include:

. sales of tangible personal property sold at retail;

@CODE:OF
@CODE: AR NC OK
. most sales of food, unlike most other states, which
generally exempt food other than restaurant meals;

@CODE:OF
@CODE: CO WY VA IL NJ
. furnishing, preparing or serving food on the premises,
for on-premises consumption;

@CODE:OF
@CODE: NJ
. certain sales of prepared food for OFF-premises consump-
tion;

@CODE:OF
@CODE: AL GA MI NY SD AZ FL PA
. sales of prepared food or drink for on- OR off-premises
consumption;

@CODE:OF
@CODE: MO KS ID
. meals and drinks furnished by restaurants, hotels,
dining cars and other places where meals or drinks
are regularly served;

@CODE:OF
@CODE: TX WA RI
. food sold by restaurants, concession stands and other
vendors for "immediate consumption";

@CODE:OF
@CODE: CO WY GA MI NY SD MO KS AR OK AZ UT RI
. utility services, including gas, and electricity;

@CODE:OF
@CODE: CO WY GA MI NY SD MO KS AR OK AZ FL NJ TX PA WA UT RI
. certain telephone services;

@CODE:OF
@CODE: WY GA LA NY SD MO KS AR OK AZ FL NJ ID TX WA UT
. admissions to places of amusement, recreation, games
or athletic events, generally;

@CODE:OF
@CODE: WY SD AR TX
. computer software programs, whether of the "canned"
variety or if customized for the user;

@CODE:OF
@CODE: LA SD TX WA
. various services, such as laundry, drycleaning, print-
ing and repair services;

@CODE:OF
@CODE: WY MO OK AZ UT
. receipts from transportation of passengers;

@CODE:OF
@CODE: CO WY VA AL GA LA MI NY NC SD MO KS AR OK AZ IL FL NJ ID TX PA WA UT
. gross receipts from providing transient accommodations;

@CODE:OF
@CODE: VA NY NC AZ FL ID TX RI
. fabrication of tangible personal property for consumers
who furnish the property;

@CODE:OF
@CODE: WY KS AR NJ TX PA WA
. services relating to repair, alteration, or improvement
of tangible personal property;

@CODE:OF
@CODE: CO WY VA AL GA LA MI NY NC SD MO KS AR OK AZ FL NJ ID TX PA UT RI
. and rentals and leases of tangible personal property.

@CODE:OF

@CODE: AL AR CO CT FL GA ID IL IN IA KS KY LA ME MD MA MI MN MS MO NB NV NJ NY NC ND OH OK PA RI SC SD TN TX UT VA VT WV WS WY
Major categories of goods or services that are exempt from
sales tax in @STATE include:

. sales to the U.S. or the state of @STATE;

@CODE:OF
@CODE: AZ WA
Major categories of goods or services that are exempt from
sales tax in @STATE include:

. sales made to the U.S. government (but not to the state
of @STATE);


@CODE:OF
@CODE: CO WY VA AL GA LA MI NY NC SD MO KS AR OK AZ IL FL NJ ID TX PA UT RI
. sales to certain charitable, educational or nonprofit
organizations;

@CODE:OF
@CODE: CO WY VA AL GA LA MI NY NC SD MO KS AR OK AZ FL NJ ID TX WA UT
. sales of most kinds of prescription medicines and drugs;

@CODE:OF
@CODE: PA RI
. sales of prescription AND non-prescription drugs, medi-
cines and medical supplies;

@CODE:OF
@CODE: VA
. non prescription drugs and proprietary medicines used
in the cure, prevention or treatment of disease will
also become exempt, effective July 1, 1994;

@CODE: OF
@CODE: CO WY VA LA MI NY NC SD MO KS AR OK AZ FL NJ ID TX PA WA RI
. sales of certain kinds of medical items, such as pros-
thetic devices;

@CODE:OF
@CODE: CO WY VA LA MI NY SD AR OR FL NJ TX PA WA UT RI
. newspapers;

@CODE:OF
@CODE: CO WY VA AL NY KS FL NJ WA UT
. most kinds of services, where not related to repair,
installation, fabrication, etc., of items of tangible
property;

@CODE:OF
@CODE: GA MI NC MO OK AZ IL ID PA RI
. personal services, in general;

@CODE:OF
@CODE: CO VA AL MI NY NC MO KS AZ IL FL NJ ID PA WA UT RI
. sales of customized computer software programs;

@CODE: CO WY VA AL GA LA MI NY NC SD MO KS AR OK AZ IL FL NJ ID TX PA WA UT RI
. and sales made for resale (wholesale sales), pursuant
to a valid resale certificate.

@CODE:OF