Expert: Arthur Naman - 1/27/2009

Question
Hi Arthur,

I have recently started my own company (LLC) and I am also registered as a NY sales tax collector. As an advertising agency, one of my clients wanted me to organize a photo shoot. So I have hired a photographer (a sub-contractor), he has invoiced me, then I have invoiced my client (including my commission).
I haven't transformed or retouched any pictures, I got a CD with picturesfrom the photographer, I gave the same CD to my client.
I have collected NY Sales Tax from my client but my sub-contractor has also added NY Sales Tax to his invoice. I have already paid this invoice but I just realize that as I am not the final payer and I am a Sales Tax collector, I should not have paid Sales Tax to my vendor, is that right?

Thanks in advance for your response,
Aurelien

Answer
I am in Texas; I do not know if the rules are the same where you are. With that said ...

Generally sales tax is only paid once, bye the last guy in line just before the final consumer purchases the product.

You should, I think, be able to secure a refund of sales taxes paid by you to the sub -- by supplying the sub with your sales tax certificate number.

You might also be able to take a deduction on your sales tax return for the sales tax you paid in error - that's just a maybe though.