recommendation for bulk stranded cable

[layoric]

No offense, but figuring math like that always assumes that you'd be choosing one type of work over another - thus losing money as you say. It rarely takes into account doing such tasks on your off time or when there's no other work to do.

 

[codegreen]

No offense, but figuring math like that always assumes that you'd be choosing one type of work over another - thus losing money as you say. It rarely takes into account doing such tasks on your off time or when there's no other work to do.

This is true, but is making patch cables really the best use of that time? I understand where the OP is coming from: I wanted to keep up my cable-making skills, too, and I liked the idea of being able to custom-build any cable for any situation on the fly. But, when I did the math and compared prices on pre-made cables, it just didn't make business sense. And when it comes to slack time, I use it to build up my business: marketing, administration, relationship-building. Cable manufacturers can build those cables faster, better and cheaper than I can. I let them do it, while I focus on more important things.

 

[nlinecomputers]

I thought I only had to have a seller's permit for reselling stuff bought from wholesalers.

Well if I need a seller's permit just to sell patch cables at higher prices than what I bought them, that won't be a big deal...administratively. They're just patch cables and I probably won't sell too many of them. Thanks for bringing that to my attention.

What I'm confused about, however, if that if I buy patch cables from Monoprice, paying sales tax on them, and then sell them at higher price, what tax do I collect on them from the client? Use tax? (sales tax will already have been paid...I guess)

No you do not pay sales tax if you are going to collect it. If you plan on buying ANYTHING for resale you must inform the store you are purchasing from and probably have to leave them a Resale certificate form. It is what we have to do in Texas. Example if I have an emergency situation and run into Best Buy to get a NIC or something I have a resell account setup with them. Home Depot, Staples, Walmart. All of these places I went in a head of time, filled out the proper paper work, showed them my Resale Tax License and got a card from them so that I can just show the cashier and get the items tax exempt. Any vendor that is operating in your State you have to do the same with.

 

[Pants]

No you do not pay sales tax if you are going to collect it. If you plan on buying ANYTHING for resale you must inform the store you are purchasing from and probably have to leave them a Resale certificate form. It is what we have to do in Texas. Example if I have an emergency situation and run into Best Buy to get a NIC or something I have a resell account setup with them. Home Depot, Staples, Walmart. All of these places I went in a head of time, filled out the proper paper work, showed them my Resale Tax License and got a card from them so that I can just show the cashier and get the items tax exempt. Any vendor that is operating in your State you have to do the same with.

Ah...thanks.. I'll make sure I do this stuff before I start the bus.. So if I buy something at retail cost from a store (where ever it is) and I don't pay tax on it, then I mark it up a little, the tax to be collected will be of MY marked up price?

 

[nlinecomputers]

Yes you charge tax on what you sell it to the customer. Also I don't know about California but in Texas LABOR is also taxable so you'd need a Sales Tax Permit just to do business. I suspect California is no different.

 

[Pants]

My simple cable question has turned into a major business lesson.
Alright I'm now looking at California laws regarding what labor is taxable.

Ok one last question. Let's say I had purchased a bunch of computer parts at retail price + sales tax. I then assembled some of that for a client to use, or just sold one or two parts to a client. Since I had already paid tax on the items, am I still allowed to mark them up? If I'm allowed to mark them up, is there any tax due? Use tax? I like to ask these kinds of questions here because gov website are vague on certain points.

 

[Kitten Kong]

For any accounting questions, your best asking a qualified accountant in your state, county etc. As the tax rules and laws will surely be different from state to state.

Afaik, you can mark up what ever you like. That has nothing to do with tax. In fact you should be making a profit on every single purchase, irrespective of what the hardware/software is. It's one easy way of making a little extra, and you should be in business to make money.

 

[Mercenary Roadie]

Yes you charge tax on what you sell it to the customer. Also I don't know about California but in Texas LABOR is also taxable so you'd need a Sales Tax Permit just to do business. I suspect California is no different.

No California is not the same as Texas regarding sales tax.

To the OP, just go to the link I provided earlier and do some reading. It's your responsibility to know this stuff.

 

[Pants]

I think I (might) have this.. So to sum up..

1. A reseller permit is so you are allowed to collect taxes from the client you are selling to

2. Stuff purchased tax free can be resold (whether it's marked up or not) with client taxed on item instead of me.

3. Used parts (whether they are purchased or taken out of my parts bin) are use-taxable.


I think the only area where I'm confused is reselling new stuff that I've already paid sales tax on. ...If I mark it up, do I owe additional sales tax on difference from what I originally paid for it? If I don't mark it up, I guess their is no more tax owed....just sell it to them for what I paid for it?

To the OP, just go to the link I provided earlier and do some reading. It's your responsibility to know this stuff.

I'm working on it. There are points that are not clear on the site.

 

[nlinecomputers]

You are not supposed to sell stuff you paid tax on. If you intend to sell it then you are required to not pay tax and then collect on sale of it.

 

[Pants]

What difference does it make if I paid tax on it? If it's mine, can't I do what I want with it? What if I gave it away and the person gave it back to me? Then it wouldn't be something I paid tax on. Lol

What if somebody gave me some materials and used the material to make some cables. I can't sell the cables for a profit?

 

[nlinecomputers]

What difference does it make if I paid tax on it? If it's mine, can't I do what I want with it? What if I gave it away and the person gave it back to me? Then it wouldn't be something I paid tax on. Lol

What if somebody gave me some materials and used the material to make some cables. I can't sell the cables for a profit?

It's called Tax Fraud. If you pay sales tax on a item and then mark it up you are required to collect the full tax on it. Because the customer by law is required to know what tax they are paying. If you only charge the difference in your mark up you are certain to land an audit. And if you routinely mark up and apply full tax on the item then that item has been tax twice for one RETAIL SALE. You are not allowed to mark up after tax you are only allowed to collect tax on the retail sale. If you tax twice you'll get fined. That is the law in Texas and I would expect to be similar in California.

 

[Markverhyden]

What difference does it make if I paid tax on it? If it's mine, can't I do what I want with it? What if I gave it away and the person gave it back to me? Then it wouldn't be something I paid tax on. Lol

What if somebody gave me some materials and used the material to make some cables. I can't sell the cables for a profit?

It's all about your intent. Taxes have to be paid on sales. If you are buying something with the intention of reselling it you need to collect the appropriate sales tax. Even if you sell it at a loss and paid tax when you purchased it.

 

[Pants]

What if I buy it at retail cost with paid sales tax. Then I sell it to the client for the full price that I paid for it? Is that still a no no?

I know that wouldn't be practical since you want to make money on sales...just asking

 

[Markverhyden]

Let me repeat myself. It's your intent. If you regularly purchase stuff for your customers and they pay you the state will determine you are a reseller if they start sniffing around. The state does not care whether you make a profit or not. All they care about is collecting sales tax. And the more the better.

 

[nlinecomputers]

What if I buy it at retail cost with paid sales tax. Then I sell it to the client for the full price that I paid for it? Is that still a no no?

I know that wouldn't be practical since you want to make money on sales...just asking

You don't get it. You are not legally allowed to do that PERIOD. If you are selling something to someone else as part of a business then you MUST collect tax and be the only one that collects tax. YOU ARE NOT SUPPOSED TO PAY THE TAX. THE CUSTOMER IS. You are only collecting it.

We had a thread here about someone I think he was in Mass. or NJ and he got audited and fined for not doing it properly and that was after an accountant told him he could do it. His accountant was wrong and he paid fines and back taxes(even though he paid sales tax on the items.) And yes before you point it out, this contradicts what I said about the state doesn't want you paying tax twice. Well guess what? It is the state and this is a tax issue. Since when is a state logical, consistent, or even legal when it does that? Don't be stupid. Do it the right way or you'll just give your business untold grief. Tax auditors are looking for the heads to pop up and be hammered down. Best to do it right and stay off the radar.

 

[Pants]

Ok I understand.

If I charge for parts in advance, that's still legal isn't it? As long as I am the one to collect the taxes?

What about a customer who wants to buy a part themselves and have me install it? I wouldn't be selling them anything... But what if they went one step further and gave the money to me to go buy it for them at a store? That's kind of grey area I think. Just keeping an open mind for different possibilities.

 

[nlinecomputers]

Ok I understand.

If I charge for parts in advance, that's still legal isn't it? As long as I am the one to collect the taxes?

Yep that is no different then paying for a washing machine online and having Home Depot deliver it to you. You paid in advance.

What about a customer who wants to buy a part themselves and have me install it? I wouldn't be selling them anything...

Correct but your labor might be taxable. Don't know CA tax law. It is in most states but not all of them.

But what if they went one step further and gave the money to me to go buy it for them at a store? That's kind of grey area I think. Just keeping an open mind for different possibilities.

No fine line about it at all they gave YOU money for an item. That is a sale. It is no different then the first transaction above. They paid you in advance and you delivered it later. If you want to avoid the tax part of this don't be a part of the transaction.

 

[altrenda]

There is a difference buying and selling parts for resale versus using them in repairs. And there are differences in the type of labor.

In California, labor for repairs is not taxable, but labor for building or fabricating new items is taxable. https://www.boe.ca.gov/formspubs/pub108/

Parts used in repairs, if they are more than 10% of the total cost of the repair, "the repairman is the retailer and tax applies to the fair retail selling price of the property."
If the cost is less than 10% " the repairman is the consumer of the property, and tax applies to the sale of the property to him."
http://www.boe.ca.gov/lawguides/business/current/btlg/vol1/sutr/1546.html

If you are buying for resale then a different set of rules apply.
There are many members here who buy hardware or software at retail, from Amazon, NewEgg or wherever and resell to their customers. Do you charge tax for those?

 

[Pants]

There is a difference buying and selling parts for resale versus using them in repairs. And there are differences in the type of labor.

In California, labor for repairs is not taxable, but labor for building or fabricating new items is taxable. https://www.boe.ca.gov/formspubs/pub108/

Parts used in repairs, if they are more than 10% of the total cost of the repair, "the repairman is the retailer and tax applies to the fair retail selling price of the property."
If the cost is less than 10% " the repairman is the consumer of the property, and tax applies to the sale of the property to him."
http://www.boe.ca.gov/lawguides/business/current/btlg/vol1/sutr/1546.html

If you are buying for resale then a different set of rules apply.
There are many members here who buy hardware or software at retail, from Amazon, NewEgg or wherever and resell to their customers. Do you charge tax for those?

Upgrading a workstation would be a type of fabrication too.. no ?