Mahre, Incorporated, a New York corporation, runs ski tours in a several states. Mahre also has a New York retail store and an Internet store, which ships to out-of-state customers. Assume sales transactions in all states, except New York, are under 200 and that all states have adopted Wayfair legislation. The ski tours operate in Maine, New Hampshire, and Vermont, where Mahre has employees and owns and uses tangible personal property. Mahre has real property only in New York. Mahre has the following sales: Assume the following sales tax rates: Alaska (0 percent), Colorado (7.75 percent), Maine (8.5 percent), New Hampshire (0 percent), New York (8 percent), and Vermont (5 percent). How much sales and use tax must Mahre collect and remit?

Question

Mahre, Incorporated, a New York corporation, runs ski tours in a several states. Mahre also has a New York retail store and an Internet store, which ships to out-of-state customers. Assume sales transactions in all states, except New York, are under 200 and that all states have adopted Wayfair legislation. The ski tours operate in Maine, New Hampshire, and Vermont, where Mahre has employees and owns and uses tangible personal property. Mahre has real property only in New York. Mahre has the following sales:  Assume the following sales tax rates: Alaska (0 percent), Colorado (7.75 percent), Maine (8.5 percent), New Hampshire (0 percent), New York (8 percent), and Vermont (5 percent). How much sales and use tax must Mahre collect and remit?

Quizplus · Accepted Answer

For the retail store sales in New York, Mahre must collect and remit the 8 percent New York sales tax. Therefore, option d is incorrect.
Mahre has nexus in Maine, New Hampshire, and Vermont due to their ski tour operations, so they must also collect and remit sales tax in these states. The sales in these states are $51,000, so the total tax due in Maine is $4,335 (8.5% of $51,000), in New Hampshire is $0 (0% rate), and in Vermont is $2,550 (5% of $51,000). Therefore, the total sales and use tax Mahre must collect and remit is $6,885. Since Alaska has a 0% sales tax rate and Colorado is only applicable for sales above $200, these states are not relevant for this computation. Therefore, the correct answer is A) $10,386.

Mahre, Incorporated, a New York Corporation, Runs Ski Tours in a Several