• Join Chef Success Today! Get support for your Pampered Chef business today! Increase your sales right now! Download 1000s of files and images, view thousands of Pampered Chef support threads! Totally Free!

Taxing Shipping: Michigan Regulations Explained

In summary, the lady was asking why there was tax on shipping, and I explained that it was the law. I also told her that I wasn't worried about it, and that I believed the company was in the right. She was just being nice.
Kelly8
556
So I had a show last night, and the lady asked why there was tax on shipping. I answered that Michigan taxes shipping, sorry! She said that they don't, and that she runs a small business and she was told she couldn't tax shipping. (I didn't think to ask her who told her that.) Then she said that I should look into before I get fined. I told her that it's the company doing the taxing, not me, and I'm not that worried about it, and I believe they're in the right. She insisted that Pampered Chef was run and I should look more into it for myself before I get fined for all of those years of charging tax on shipping. I know that she was just being nice, but it was kind of driving me nuts. I would think that if PC was wrong, the government would've caught on by now. I also heard it has something to do with the home-based business. Any ideas exactly why shipping is taxed?
 
Kelly,Don't know if this will help or not but the quote below is taken right from the State of Michigan site. Here's the link to that page: Taxes - Sales and Use Tax FAQs Why is shipping taxed? Because it's the law.
Are delivery, shipping or handling charges taxable?Yes, delivery or shipping charges incurred prior to transfer of ownership of tangible personal property are subject to tax. Handling charges are a part of gross proceeds and are taxable. When a customer is billed for delivery or shipping and handling as a combined total, the total charge is taxable.
 
I don't have an answer, but I know that a friend who is a Stampin' Up consultant also taxes shipping.

We also have a small business, and honeslty things are just different. Tax is a nightmare. We have a Landscape business. If DH installs a sprinkler system for someone, he has to pay tax on the pipes and parts he installs, but doesn't charge the customer tax. On the other hand, if he does a sprinkler repair for someone, he buys the parts tax exempt, and then charges the customer tax both on the parts and on his labor. Talk about an inventory nightmare!!!!!
It is a huge mess, and a lot of tax rules aren't necessarily set in stone, but making sure the company follows what their tax people are telling them, and them settling up correctly with the government.
 
Also if you want more specific information, you could call HO and they will explain why the customer has to pay tax on shipping. Also you could call your states tax department, i believe and they can tell you why.

(OT: I would like to ask you if you have sold your trifle bowl pedestals yet. I haven't received a reply in the other email. Thank you)
 
chefjeanine said:
Kelly,

Don't know if this will help or not but the quote below is taken right from the State of Michigan site. Here's the link to that page: Taxes - Sales and Use Tax FAQs Why is shipping taxed? Because it's the law.
Are delivery, shipping or handling charges taxable?

Yes, delivery or shipping charges incurred prior to transfer of ownership of tangible personal property are subject to tax. Handling charges are a part of gross proceeds and are taxable. When a customer is billed for delivery or shipping and handling as a combined total, the total charge is taxable.

This is exactly right. We have to charge tax on shipping because handling is involved. I'm always amazed when people try to tell us that we're charging wrongly. Some companies do it differently. It's all in what they are calling it and what the accountants decide. Park Lane does an "insurance charge" instead of shipping and they charge tax on that. I don't know of having to pay tax on insurance anywhere else. LOL

Just tell them that Pampered Chef has been around for 30 years and they have given us the rules and charges as they pertain to us and our company. Then give her the 888 number and let her talk to finance. You can also show her the back of the receipt that clearly shows that most states do charge tax on shipping and handling.
 
And usually these are the people who don't book a party...where they could save soooo much more! They would trip over a $20 bill to pick up a penny, I swear!!
 
Sounds like SHE is the one who should check the law before SHE gets fined. ;)
 
I have one of these who actually wanted to book a show. Um no thank you.
 
I know people like that..I don't think it's about the money, its about being "right" or "following the rules"---like the state wouldn't catch the error after all these years if it really was an error.People like this find joy in telling others they are wrong, and believe if they are SURE, then they must be RIGHT.marghi
 
  • Thread starter
  • #10
And that's what was annoying me: the fact that she had to argue about it with me in front of other guests. Hmmmm, you have a nationally-recognized company whose ethics are never in question, and yet you are saying that they don't know how to tax shipping. I told her, too, that when I get an order from out of state, I have to check their tax policies because every state does it differently.
 
  • #11
I don't know about Michigan but I know in Connecticut shipping is taxed because it is a service. All services in CT are taxed. Hope that helps!
 
  • #12
It's taxed in my state, too. I think there are only acopule of states that DON'T tax shipping - I seem to remember they all started with vowels, like Indiana, Ohio & Iowa.
 
  • #13
ShellBeach said:
It's taxed in my state, too. I think there are only acopule of states that DON'T tax shipping - I seem to remember they all started with vowels, like Indiana, Ohio & Iowa.

Nope, Indiana also taxes shipping. I live on the border and do shows in Michigan and Indiana.
 
  • #14
Indiana taxes shipping and handling. I think if it's just one (shipping?) it's not taxed, but since it's shipping and handling it is.
 

1. What is the current tax rate for shipping in Michigan?

The current tax rate for shipping in Michigan is 6%. This includes both state sales tax and any applicable local taxes.

2. Are there any exemptions for taxing shipping in Michigan?

Yes, there are some exemptions for taxing shipping in Michigan. These include items such as prescription drugs, food, and agricultural products. Additionally, certain shipping services may also be exempt, such as shipping for non-profit organizations.

3. Do I need to charge sales tax on shipping if my business is located outside of Michigan but I am shipping to customers in Michigan?

If your business does not have a physical presence in Michigan, you are not required to charge sales tax on shipping to customers in Michigan. However, you may still be responsible for collecting and remitting other taxes, such as use tax, on these transactions.

4. Are there any special rules for taxing shipping on online or remote sales in Michigan?

Yes, there are special rules for taxing shipping on online or remote sales in Michigan. As of October 1, 2018, remote sellers with sales exceeding $100,000 or 200 transactions in Michigan are required to collect and remit sales tax on shipping to customers in the state.

5. How do I report and pay taxes on shipping in Michigan?

You can report and pay taxes on shipping in Michigan through the Michigan Department of Treasury's online portal or by filing paper forms. You will need to collect and report the appropriate sales tax rate based on the location of the customer receiving the shipped goods.

Similar Pampered Chef Threads

  • kcjodih
  • Pampered Chef Finances
Replies
12
Views
2K
kam
  • chefheidi2003
  • Pampered Chef Finances
Replies
4
Views
2K
AnaCash
  • newtopamperedchef
  • Pampered Chef Finances
Replies
4
Views
4K
AnaCash
  • esavvymom
  • Pampered Chef Finances
Replies
2
Views
1K
Admin Greg
  • ElizabethPurvis
  • Pampered Chef Finances
Replies
5
Views
1K
ElizabethPurvis
  • sarahsworld2000
  • Pampered Chef Finances
Replies
5
Views
2K
slmoulton8
  • mspibb
  • Pampered Chef Sales
Replies
2
Views
5K
mspibb
  • smilesarepriceless
  • Pampered Chef Finances
Replies
13
Views
5K
jrstephens
  • PCSarahjm
  • Pampered Chef Shows
Replies
8
Views
1K
PCSarahjm
  • chefmoseley
  • Pampered Chef Finances
Replies
2
Views
16K
gailz2
Back
Top