State sales tax being wrongly collected by equipment vendors, check your states laws!.

[glandpuck]

Looks like California discounts sales tax by 3.9375%

Unpacking California Solar Taxation: What to Know During Development

www.fbm.com

Partial Sales Tax Exemption for Renewable Energy Equipment in California | Stoel Rives LLP

www.stoel.com

Purchase of solar panels should almost certainly quality. Inverters, depends on what you use them for. It appears wire, electrical boxes, transformers, etc. can also quality. The retailer couldn't know. Probably best if the person who qualifies for the benefit can file for a refund. Not sure if there is a way on state income tax return. Maybe, they do collect tax there.

I am in California. I read through the California sales taxation laws as best I could. The laws pretty clearly state that licensed installers, solar businesses and resellers do not pay sales tax on solar equipment. However, the end user who is doing a DIY does pay sales tax on this equipment. Now, you can be an accomplished self installer DIY person, but without a tax exempt business license to provide to your equipment distributor or manufacturer, you will be paying sales tax, even though you may acquire the equipment at wholesale rates. You can still apply for any Federal and State tax rebates and credits.

 

[millsan1]

A couple points, if I may.

If a business doesn't charge you sales tax, and should have, they are on the hook. So it is safer for them to charge you, and you figure it out in your state.

The good old days of "I bought it off the Internet, so I don't have to pay sales tax" were never there. If you bought something off the Internet, and you didn't pay sales tax to the seller, you were supposed to pay tax to your state, by self reporting. We all know that didn't happen, but technically, and legally, we were all supposed to be doing that.

 

[Hedges]

I worked in a data center for 10+ years PCI, Credit Card Compliance, and various other things, there is no getting around it.

Except for the structuring of taxable hardware vs. labor, service contract ...

I've seen ads for vintage cars, "Sold only with a guaranteed restoration contract."
We pay sales tax on purchase price, but labor to repair car would not incur that.

Contractors are to pay sales tax on materials (maybe photovoltaic installation is an exemption.) But if they buy materials and build something in their shop, rather than on-site (e.g. a cabinet, preassembled tilt-up walls), they are supposed to charge customer tax on delivered assembly.

If I can get a credit for tax-paid hardware used in PV installation, that would be good. 20 years ago, for the 50% CEC rebates on solar, we were expected to have paid sales tax. The sales tax exemption may have come later. Real property exemption was already there.

 

[glandpuck]

A couple points, if I may.

If a business doesn't charge you sales tax, and should have, they are on the hook. So it is safer for them to charge you, and you figure it out in your state.

The good old days of "I bought it off the Internet, so I don't have to pay sales tax" were never there. If you bought something off the Internet, and you didn't pay sales tax to the seller, you were supposed to pay tax to your state, by self reporting. We all know that didn't happen, but technically, and legally, we were all supposed to be doing that.

California state tax return specifically asks if you purchased any goods out of state for which sales tax was not collected. If yes, then you are to declare the amount of goods purchased and pay the sales tax directly. California does not rely on out of state businesses to always collect sales tax and remit to the state.

 

[SignatureSolarJames]

California state tax return specifically asks if you purchased any goods out of state for which sales tax was not collected. If yes, then you are to declare the amount of goods purchased and pay the sales tax directly. California does not rely on out of state businesses to always collect sales tax and remit to the state.

They incriminate both parties, very surprising lol

 

[Firstrapid]

Don't think it is any harm if a vendor collects and turns in sales tax even though sales for the year are low enough that it was not required. Just means the customer isn't required to make the payment themselves.
Often, tax situations are based on prior year figures, e.g. our IRS pre-payment requirements. Don't know about sales tax collection.

Everybody needs to be very careful not to get hit with penalties so better for them to pay though not required, rather than not pay as required. Like employers who hire contractors - if later deemed employees they owe a bunch of taxes. Yet, if someone is an independent contractor, they are required to pay both employer and employee halves of social security tax. But on net income, not gross revenue, so they get to deduct expenses first. California says if your employees do certain work at a site (or in the company?) then anyone brought in to do same work is an employee not a contractor. Perhaps it is different if you present a business license. We have lots of contract employees, where the company hires a labor-ready type firm to provide workers who are then employees of that company.

You no doubt went to the Biden School of Economics! Customers ultimately pay the tax!