I placed an order for my new book from Createspace, and I'm a little mystified as to why they are charging me sales tax, and what the repercussions of that might be.
By my understanding, they shouldn't be charging me sales tax even on taxable items, because I am in California and they are not. I know that amazon never charges me sales tax on purchases, because they are not in California.
But more to the point, they are wholesalers when they sell to me, and wholesalers don't collect sales tax, as I understand it.
So if I place the book in a store, they are going to charges sales tax on the entire price of the book. They aren't going to subtract $2.15 that CS has already taxed. So that means that the State of California is going to be collecting more than the correct sales tax on the book.
And if the books go to a nonprofit to sell, then no sales tax at all needs to be collected on the sales, and yet one way or another my sales tax will have been passed along to the tax-exempt non-profit.
This just doesn't seem right to me. Anybody have any answers on this one?
My orders are being placed in and trucked all the way across country over a period of MANY days from North Charleston, South Carolina, and not from California.
HOWEVER, in this business they are still a wholesaler, and should not be collecting sales tax on products to be sold at retail, since that way there is tax being collected on $12.10 for every $9.95 sale. There is absolutely no way I can see for a retailer to be able to compensate for that.
As Derek noted, CS has a corporate presence in California and is therefore required to collect sales tax on retail purchases shipped to addresses in that state.
If you're saying that it's NOT a retail purchase, i.e., that you are buying these items for resale, then all you need to do is: (a) provide CS with a resale certificate and a copy of your seller's permit so they can legally not charge you sales tax, or (b) subtract the amount that's already being collected by the state on each book (from CS) from the amount that you pay the state (for example, let's say you buy the book wholesale for $5 and CS charges you 9% or $0.45 sales tax; then you resell the book for $15 and collect the required $1.35 sales tax for the customer; you'd only pay the state $0.90 of that $1.35 because they already received the other $0.45 from CS).
I'm not in CA, but the states in which I do business have a spot on their sales tax forms to handle option (b) -- but option (a) is preferred.
Hope that helps.