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Understanding Tax Requirements for Out of State Sales: A Guide for Consultants

In summary, you received a form 740-NP from Kentucky this year stating that you must use the form to report your income from Kentucky sources. You have never heard of having to use the form before, and are not sure if catalog shows from previous years count as income from Kentucky sources. You might try and call the IRS to ask about the matter.
GeorgiaPeach
Silver Member
1,371
HELP!! I moved from Kentucky to Georgia in 2004. I received a "Form 740-NP" from KY this year that states "Form 740-NP must be used by full-year nonresidents who had income from Kentucky sources...."

What I need to know is...if I did a few catalog shows with my past KY hosts or placed individual orders with them during 2005 does this count as "income from Kentucky sources"? I have never heard of this. When I lived in KY and did shows in Indiana, Ohio, and WV no one ever asked me if some of my income came from outside of the state.

I have a "tax friend" in KY and he thought catalog shows were fine but if I traveled to another state to do a show I might have to pay tax on that. Since I have already claimed ALL my income to Georgia...what to do?

I have been a consultant for over 7 years. One of the greatest things is not having territories and being able to go anywhere and do shows. I have NEVER heard of having to do this!

Anyone have a tax background or had this kind of situation happen to them?
 
I'm no tax expert, but isn't all of your "source" income from Pampered Chef? If they're going to get picky about it, your "source" income comes from Illinois. Sure you're selling wherever you happen to be, but your check comes from Pampered Chef regardless of where your shows might have been. Y'know? :)
 
me and my DH moved to MS. last year and he still had income from Ga. we went to H&R Block and she said she couldnt do the Ga. income for some reason. i used to do taxes and never had that problem. it may be a new IRS thing. you might try and call them???
 

What is "Tax?? Out of State Sales"?

"Tax?? Out of State Sales" refers to the tax that is imposed on goods or services sold by a business that is located outside of the state in which the buyer is located.

Do I have to pay "Tax?? Out of State Sales"?

It depends on the state in which you are located. Some states require businesses to collect and remit "Tax?? Out of State Sales" on behalf of their customers, while other states do not have this requirement. It is important to check with your state's tax department to determine if you are required to pay this tax.

How is "Tax?? Out of State Sales" calculated?

The calculation of "Tax?? Out of State Sales" varies by state. In some states, it is based on the total sales amount, while in others it is based on the percentage of the sale. Additionally, some states have a flat rate for "Tax?? Out of State Sales". It is important to consult your state's tax laws to determine the specific calculation method for this tax.

What is the purpose of "Tax?? Out of State Sales"?

The purpose of "Tax?? Out of State Sales" is to ensure that businesses located outside of a state are paying their fair share of taxes on goods or services sold to customers within that state. This tax helps to generate revenue for the state and can also level the playing field for in-state businesses that are subject to local taxes.

How do I report and pay "Tax?? Out of State Sales"?

If you are required to collect and remit "Tax?? Out of State Sales", you will need to register with the tax department in the state where your customers are located. You will then need to collect the tax from your customers and file a tax return with the state, typically on a monthly or quarterly basis. The specific reporting and payment process may vary by state, so it is important to consult your state's tax department for guidance.

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