in Tax and Accounting Law Corporate Law Contracts Law
Asked March 18, 2014

Sale of Tailored products in a store dealing exclusively with Handloom Products

  • 1 Answer

I deal in handloom products where i don't sell any tailored merchandise. My friend however has requested me to keep some of her start-up's promotional t-shirts in my store. though they are meant for promotional purpose she intends to sell it below the Cost price at a token sum. I presently don't have to pay any sales tax on handloom products, but I'm worried that if I keep such promotional t-shirts which are being "sold" at "token price" , it might get me under the sales tax department radar. Can you please clarify this?

Answer 1

Sir, sales tax is a retail point of purchase tax imposed by state and local governments that is paid by the purchaser of the goods. In the present case you are merely facilitating the sale and are not thereby earning revenue through the act of sale. In such a case your friend shall be liable to pay sales tax and not you. This is because you are carrying out the job of promoting sales. Thus you shall not be required by law to pay sales tax.

Agree Comment 0 Agrees almost 4 years ago

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