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Thread: Questions about the confusing sales tax

  1. #1
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    Wave Questions about the confusing sales tax

    Greetings,

    I have some questions about the stock lenses sale tax in California and I asked some CPA but didn't get the answers.

    I'm planning to start a stock lens wholesale business in California. I will import my lenses from my oversea's supplier. What I understand is that California will request collecting sales taxes on wholesale level which means if I sell my lenses to eye-care professionals, I need collect sale tax. My question is what if I sell my lenses to another region wholesaler or distributor, do I still need to collect tax since their purpose of buying is to resale? It doesn't make sense to me if I do need to collect sale tax since it means the lenses will be double taxed if there are multiple layer of wholesalers.

    Another questions is as a wholesaler, after importing my lenses from oversea's supplier, do I need to pay use tax? I don't think I should since I want to resale the product but again the whole taxing at wholesale level thing make me not sure about it.

    Thanks a lot if somebody can explain it a little bit.

  2. #2
    Master OptiBoarder
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    I would contact the State Board of Equalization and ask them. I am a retailer, so I pay sales tax on lenses. I would be willing to bet that if you get the Ca resale certificate from the wholesaler that you will be selling to, that will make them the responsible party for the collecting sales tax from the retailer.

  3. #3
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    Just ask these questions to the California board of equalization. That answer is that I don't need to pay use tax when importing unless I give away free samples to the clients. If I sell the lenses to another wholesaler, I don't need to collect sales tax if they provide resale certificate. Always collect sales tax when selling to eye professionals. Hope this helps anybody else.

  4. #4
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    In all my years in california as an optician and working with several labs, I never paid sales tax on lenses (stock or otherwise). Maybe tax was already rolled into the price we paid? I though medical devices are exempt from sales tax.

  5. #5
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