Early payment discountsĪn early payment discount is different from trade or volume discounts. Because the price is established at the time of the purchase, sales tax is due on the reduced selling price ($320) when a customer orders 10 cases at a time. However, if a customer orders 10 cases, the price is reduced to $32 a case. If a customer orders three cases of copy paper, the price per case is $35.
These discounts are given at the time of sale, based on the type or quantity of merchandise purchased, and represent a reduction in the purchase price.Įxample: You sell office supplies and offer a discount to your customers for purchasing in bulk. Any discounts that result in a reduction in the selling price, such as a trade discount, volume discount, or cash-and-carry discount, are subtracted before calculating the amount of sales tax due on the sale. Trade or volume discountsĬertain discounts offered at the time of sale will reduce the taxable receipt. You must charge sales tax on the entire charge to your customer, including travel, parts, and the hourly service charge.Įxpenses that are included in the taxable receipt also include any interest charges paid by you that you pass through to the customer. Your invoice is as follows: 1 ½ hours at $50 per hour ExpensesĪny business operating expenses that you pass along to your customers as part of your bills for taxable services are included in the taxable receipt and are subject to sales tax.Įxample: You are an appliance repairman, and you go to a customer’s home to fix a dishwasher. You must collect sales tax on the $15 selling price, even though a portion of the package (the cheese) would not be subject to tax if it were being sold separately.įor additional information on taxable and exempt sales, see Tax Bulletin Quick Reference Guide for Taxable and Exempt Property and Services (TB-ST-740). However, if items are packaged together for one price and cannot be broken out and purchased separately, you must collect tax on the total price.Įxample: Your store sells a package containing assorted cheeses, a cutting board, and a knife for $15.
If you sell a combination of taxable and nontaxable goods and services, you must identify which of the items are taxable and which are not. If you sell only taxable items or services, the entire invoice amount is the amount subject to sales tax. Sales tax is calculated based on the total purchase price paid on all taxable items or services on the bill or invoice. (See Tax Bulletin Sales Tax Rate Publications (TB-ST-820) to find the rates.) Showing the sales tax on the invoice You calculate the amount of sales tax due by multiplying the taxable receipt by the combined state and local sales tax rate for the locality where the goods or service are delivered to your customer.
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The taxable amount of your charges to your customers is called the taxable receipt. If you are required to collect New York State and local sales tax from your customers, you need to know which of your charges to your customers are taxable and how discounts and other adjustments affect the amount of sales tax you need to collect. Taxable Receipt - How Discounts, Trade-Ins, and Additional Charges Affect Sales Tax Tax Bulletin ST-860 (TB-ST-860) Printer-Friendly Version (PDF) Issue Date: Updated November 3, 2014
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