Mahre, Incorporated, a New York corporation, runs ski tours in several states. Mahre also has a New York retail store and an Internet store, which ships to out-of-state customers. 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 (6.75 percent), New York (8 percent), and Vermont (5 percent). How much sales and use tax must Mahre collect and remit in Maine?

Question

Mahre, Incorporated, a New York corporation, runs ski tours in several states. Mahre also has a New York retail store and an Internet store, which ships to out-of-state customers. 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 (6.75 percent), New York (8 percent), and Vermont (5 percent). How much sales and use tax must Mahre collect and remit in Maine?

Quizplus · Accepted Answer

Mahre only has sales tax nexus in states where it has employees and owns tangible personal property. Therefore, Mahre must collect and remit sales tax in Maine (8.5%), New Hampshire (6.75%), and Vermont (5%). Based on the given sales numbers, the total sales in these three states are $35,800 + $28,700 + $19,300 = $83,800. The total sales tax due is $83,800 x 8.5% = $7,133 in Maine, $83,800 x 6.75% = $5,659.50 in New Hampshire, and $83,800 x 5% = $4,190 in Vermont. The total sales and use tax that Mahre must collect and remit in Maine is $7,133 - $4,080 (sales already made in Maine) = $3,053. Note that Mahre is not required to collect sales tax in Colorado or Alaska as it does not have sales tax nexus in these states.

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