Skip navigation

This Question is Possibly Answered

1 "correct" answer available (10 pts)
778 Views 14 Replies Last post: Aug 9, 2017 7:06 PM by Lighthouse24 RSS
Level 0 8 posts since
Nov 17, 2016
Currently Being Moderated

Apr 19, 2017 10:35 AM

Ordering author copies

Can you order author copies to be sent directly to contacts in bookstores? Or do those have to be mailed to the author himself?

Level 5 4,867 posts since
Jan 17, 2010
Currently Being Moderated
1. Apr 19, 2017 10:58 AM in response to: RickorNanci
Re: Ordering author copies

You can enter any shipping address you like. It's called drop shipping.

 

Sarah
Editor & Book Designer
http://sleepingcatbooks.com
Find us on Facebook

 

 

Learning French? Try our bilingual English-French series

Level 5 15,228 posts since
May 4, 2008
Currently Being Moderated
3. Apr 21, 2017 5:38 AM in response to: RickorNanci
Re: Ordering author copies

Depends on who the third party is. Bookstores generally want a 40% discount of the list price.

 

 

Michelle

-------------

Odyssey Books -- editing, cover design and book formatting services to help you on your publishing journey.

Level 1 252 posts since
Oct 6, 2014
Currently Being Moderated
5. Aug 7, 2017 10:27 PM in response to: RickorNanci
Re: Ordering author copies

Alas, remitting about the same amount of tax in a way that's more convenient for you isn't how tax law works. The copies you buy for your own inventory (to be sold later) weren't subject to sales tax. You collect from the buyer and remit to your state only if there's a sale at retail. Your wholesale transaction with a bookstore isn't subject to sales tax.

 

I don't know what state you are in, but in my state, a business registers with the central registration division to receive a certificate of registration and taxpayer ID. It's a short, straightforward process but they take two months to process. If the business provides the taxpayer ID in a wholesale transaction, then there is no question that it's not a retail transaction and no sales tax is to be collected and remitted.

Level 5 4,867 posts since
Jan 17, 2010
Currently Being Moderated
6. Aug 7, 2017 10:37 PM in response to: a-h-k
Re: Ordering author copies

a-h-k wrote:

 

The copies you buy for your own inventory (to be sold later) weren't subject to sales tax.

Not necessarily. If the OP is in a state where Amazon has a facility (which it sounds like to me), then CS charges them sales tax on any author orders unless they obtain and provide to CS a copy of a resale certificate to negate this sales tax.

 

Sarah
Editor & Book Designer
http://sleepingcatbooks.com
Find us on Facebook

 

 

Learning French? Try our bilingual English-French series

Self-publishing forum

Level 1 252 posts since
Oct 6, 2014
Currently Being Moderated
7. Aug 8, 2017 5:50 AM in response to: Seisa
Re: Ordering author copies

You know, repeating myself is tiresome.

 

Yes, necessarily. Only retail transactions are subject to sales taxes. Tax law compliance is not optional. If the O.P. engages in wholesale transactions, then he is obliged to comply with his state's laws for business registration and record keeping. He must provide business registration information to his trading partners, like CS and Amazon, so that there is no attempt to collect and remit sales tax on any non-retail transactions. They have record keeping requirements to comply with as well.

 

He already told us that he intends to sell books in retail transactions, which makes him subject to business registration with his state's tax collection department and obligated to collect and remit sales taxes upon making those retail sales.

 

I also pointed out to the O.P. that, at least in my state, it is not particularly difficult to comply with business registration. The same is undoubtably true in his state.

Level 5 12,552 posts since
Aug 22, 2008
Currently Being Moderated
8. Aug 8, 2017 8:31 AM in response to: RickorNanci
Re: Ordering author copies

RickorNanci wrote:

If I buy member copies and sell them myself at festivals or through the mail,I've already paid sales tax so I don't have to collect tax on my sales and send it in, is that correct?

It depends on the state, but in general, yes that's correct up to a certain limit, provided you are operating as an individual (doing business under your own name).

 

a-h-k wrote:

If the O.P. engages in wholesale transactions, then he is obliged to comply with his state's laws for business registration and record keeping. He must provide business registration information to his trading partners, like CS and Amazon...

But the vast majority of members in this community are not operating as businesses, but rather as individuals using their own names and SSNs. In those cases, there is no business entity.

 

Most states do not require any type of registration for this type of operation, and they allow a certain volume of annual sales without collecting sales tax ($3000 in my state). This applies because, since the individual seller is not registered, all of his/her purchases are considered to be for personal use and sales tax has already been collected on those items. In other words, exactly the scenario the OP asked about.

 

This same aspect of state sales tax law is what allows individuals to resell items on Craigslist or to hold garage sales -- or to sell a few books at a local festival -- without registering as a business and obtaining a resale permit.

 

If a member intends to be in the business of publishing and selling books, then I firmly believe that he/she should BE in business -- i.e., set it up and operate it properly. But most self-publishing authors aren't there yet in terms of business goals or sales volume, and for them, it just makes sense to keep things simple until there's a real benefit to making them more complicated.

Level 1 252 posts since
Oct 6, 2014
Currently Being Moderated
9. Aug 9, 2017 10:18 AM in response to: Lighthouse24
Re: Ordering author copies

This is just bad advice, generally. The O.P. didn't tell us what state he is in and you must not advise him that he meets a tax law exemption. You didn't listen to what the O.P. said he intended to do.

 

The O.P. stated that he intended to create a small inventory of books to resell later. According to my state's tax code, that makes it a regular business and not an occassional transaction. If he were in my state, then he'd have to register for sales taxes to obtain a taxpayer ID number, and he'd be required to give Amazon or CS his reseller's certificate. That's required, not optional.

 

Changing the hypothetical: Let's say an author is told by his publisher that the book is no longer selling and there won't be any further printings. They're willing to sell him the remaining inventory cheap. The author can then do what he likes with them, including selling them off. Under that scenario, the author wouldn't be subject to registration. He is, nevertheless, required to collect and remit sales taxes for any retail sale. He'd simply remit the sales taxes together with estimated taxes or withholding of his personal income taxes and file the appropriate schedule with his personal income tax return. He should register as a reseller, however, otherwise the books for resale will be subject to sales taxes if it's an in state transaction.

 

Maybe there is an exemption that he'd meet in his state's tax code, but I cannot advise him of that as he didn't give us enough information.

 

I'm doing my best to be helpful, by giving the O.P. the information he needs, and by telling him he can't avoid record keeping and tax law compliance. Fortunately, with record keeping and returns for sales taxes, this is uncomplicated. Guessing in ignorance that he meets some exemption in his state is just not helpful in any way.

Level 4 2,031 posts since
Feb 7, 2015
Currently Being Moderated
10. Aug 9, 2017 11:29 AM in response to: a-h-k
Re: Ordering author copies

a-h-k wrote:

 

This is just bad advice, generally. . . . You didn't listen to what the O.P. said he intended to do. . . . Guessing in ignorance that he meets some exemption in his state is just not helpful in any way.

These comments of yours are rash and uncalled for. I can count Lighthouse24's bad advice on one hand and end up with five digits unused. In point of fact, his advice to the O.P. was carefully considered and eminently reasonable.

Level 5 12,552 posts since
Aug 22, 2008
Currently Being Moderated
11. Aug 9, 2017 11:41 AM in response to: a-h-k
Re: Ordering author copies

a-h-k wrote:

Changing the hypothetical: Let's say an author is told by his publisher that the book is no longer selling and there won't be any further printings. They're willing to sell him the remaining inventory cheap. The author can then do what he likes with them, including selling them off. Under that scenario, the author wouldn't be subject to registration. He is, nevertheless, required to collect and remit sales taxes for any retail sale.

 

If the publisher is selling the books to the author and they are in the same state, then the publisher would be required to collect sales tax on that transaction (unless the author provided resale/exemption documentation, which he doesn't have in this scenario). If the author subsequently resold some of those books, he would not collect sales tax again (already been paid).

 

If the publisher and author are in different states and the publisher collects no sales tax, then the author would be required to pay use tax to his own state. If he did so, and subsequently resold some of those books, he would not collect sales tax on those sales (because, again, the tax has already been paid). Further, if he were selling those books as an individual using his own name, he would not be required to register in any way whatsoever in most states.

 

If the author did not pay use tax on those books because he intended to go into the business of reselling them, then he would need to obtain the appropropriate resale permit, collect sales tax on any book sales, and remit those taxes to the state. On the other hand, if he used the books strictly as promotional giveaways, he wouldn't necessarily have to do anything in most states.

Level 1 252 posts since
Oct 6, 2014
Currently Being Moderated
12. Aug 9, 2017 3:28 PM in response to: Lorem_Ipsum
Re: Ordering author copies

Lorem_Ipsum wrote:

 

a-h-k wrote:

 

This is just bad advice, generally. . . . You didn't listen to what the O.P. said he intended to do. . . . Guessing in ignorance that he meets some exemption in his state is just not helpful in any way.

These comments of yours are rash and uncalled for. I can count Lighthouse24's bad advice on one hand and end up with five digits unused. In point of fact, his advice to the O.P. was carefully considered and eminently reasonable.

 

This was wrong:

Lighthouse24 wrote:

 

But the vast majority of members in this community are not operating  as businesses, but rather as individuals using their own names and SSNs.  In those cases, there is no business entity.

 

Most  states do not require any type of registration for this type of  operation, and they allow a certain volume of annual sales without  collecting sales tax ($3000 in my state). This applies because, since  the individual seller is not registered, all of his/her purchases are  considered to be for personal use and sales tax has already been  collected on those items. In other words, exactly the scenario the OP  asked about.

What does whether an entity exists have to do with sales tax? An individual who sells at retail, unless there is an exemption in state law, is subject to collecting and remitting sales tax on in-state transactions. Period. If the business is a sole proprietorship (a Schedule C filer), then its federal tax identification number is the proprietor's SSN and not an EIN, unless there are payroll tax returns to file. That's an issue of federal tax code compliance, separate from state tax code compliance.

 

It's lovely that Lighthouse24's home state has a threshold, but no one can make a blanket statement about tax law compliance in another state that one is not familiar with. If the O.P. had told us his home state, I could have looked it up for him. I was limited to giving an example applicable from my state, and I said so. In my state, there are different criteria for business registration for sales tax purposes and who must remit sales taxes. Given that the O.P. told us he wanted to create an inventory for future retail sale, then he would have been subject to business registration if in my state. In my state, everyone who sells at retail, even those with occassional sales not subject to business registration, is required to collect and remit sales taxes on in-state sales.

 

I do not agree with telling someone asking for advice that he is not subject to business registration, providing resale certificates, and collecting and remitting sales taxes given that all necessary facts were not provided so we could know if any exemptions apply.

Level 1 252 posts since
Oct 6, 2014
Currently Being Moderated
13. Aug 9, 2017 4:33 PM in response to: Lighthouse24
Re: Ordering author copies

Lighthouse24 wrote:

 

a-h-k wrote:

Changing the hypothetical: Let's say an author is told by his publisher that the book is no longer selling and there won't be any further printings. They're willing to sell him the remaining inventory cheap. The author can then do what he likes with them, including selling them off. Under that scenario, the author wouldn't be subject to registration. He is, nevertheless, required to collect and remit sales taxes for any retail sale.

 

If the publisher is selling the books to the author and they are in the same state, then the publisher would be required to collect sales tax on that transaction (unless the author provided resale/exemption documentation, which he doesn't have in this scenario). If the author subsequently resold some of those books, he would not collect sales tax again (already been paid).

I had a sentence at the end of that paragraph about providing one's resale certificate to document that the resale transaction was no subject to retail sales tax, but you didn't quote it.

 

Lighthouse24 wrote:

 

If the publisher and author are in different states and the publisher collects no sales tax, then the author would be required to pay use tax to his own state. If he did so, and subsequently resold some of those books, he would not collect sales tax on those sales (because, again, the tax has already been paid). Further, if he were selling those books as an individual using his own name, he would not be required to register in any way whatsoever in most states.

My state has no such exemption from the requirement to collect and remit taxes on sales at retail.

 

Furthermore, use tax does not apply to creating an inventory, only to tangible goods that one puts into one's own use.

Level 5 12,552 posts since
Aug 22, 2008
Currently Being Moderated
14. Aug 9, 2017 7:06 PM in response to: Lighthouse24
Re: Ordering author copies

Just to summarize, this started when the OP asked if he/she had to pay sales tax again when reselling author copies on which CreateSpace already charged sales tax.

a-h-k wrote:

The copies you buy for your own inventory (to be sold later) weren't subject to sales tax.

 

Sarah responded.

Seisa wrote:

Not necessarily.

and she (correctly) explained why that was the case.

 

Then, after a backhanded insult,

a-h-k wrote:

Yes, necessarily.

 

Well, no. If an author is buying copies as an individual (like the vast majority of members here), and no business entity exists, then he/she can't possibly provide the wholesaler with a resale certificate from his/her state, nor a Universal Sales and Use Tax Exemption form showing the state in which his/her business is registered -- because there is no business that's registered. So the seller (CreateSpace in this case) is going to charge sales tax if required, the author is going to pay it, and if the author resells some of those books, he/she is not required to collect sales tax a second time.

 

To which...

a-h-k wrote:

If he were in my state, then he'd have to register for sales taxes to  obtain a taxpayer ID number, and he'd be required to give Amazon or CS  his reseller's certificate. That's required, not optional.

Well, I guess this must be the case in a-h-k's state, but it's definitely not in most other states. Thankfully, most states allow individuals who are only occasional resellers (of certain types of items within certain annual limits -- e.g., an author selling his/her books at a festival) to operate precisely as I explained.

Actions

More Like This

  • Retrieving data ...