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. 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. 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

Mahre needs to collect and remit $10,386 in sales taxes [Maine ($35,913 × 8.5 percent) + New Hampshire ($26,721 × 0 percent) + New York (65,431 × 8 percent) + and Vermont ($41,982 × 5 percent)] because it has physical presence in these states. The sales tax base is only assessed on goods sold, not services. Because Mahre has no physical presence in Alaska and Colorado, the Quill decision protects Mahre from sales tax nexus and collecting and remitting sales tax in those states.

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