Surviving the ST-9 (Virginia Sales Tax)

VA ST-9 - Virginia Sales Tax
Sales Tax: Not Really That Scary

(NOTE: This post was written in 2012 and the tax rates and form appears to have changed significantly since then.)

February has arrived and it’s time to do January’s ST-9!

Although the Sales Tax payment isn’t due until the 20th, I’ve found it’s always easier to do it on the first when I do all my other end of month accounting.

I’m blatantly ignoring the fact that I didn’t sell anything in January, since Virginia requires that the form be filed regardless of if any tax is owed. Woo.

Anywho, let’s break this thing down!

Disclaimer: I am not a tax specialist! I am simply going off of the instructions provided by Virginia and doing my best… when I can afford a tax accountant to look things over, I’ll come up back and update this (or if I run into problems). For now, please read the instructions yourself (see link above) and draw your own conclusions.

Step 1 – Collection

Poptop Sales Tax Calculation

Step 1 is the actual collection of the sales tax, which would have happened when I invoiced an order in January. Since I didn’t sell anything, we’ll have to pretend.

So let’s use Poptop, who is listed for $25.13 with a S&H of $5.10. (Yes, I have to collect tax on the S&H. I think it’s stupid too, but alas.)

Assuming he sold to someone in Virginia I would have collected $1.51 from the buyer which is 5% (4% State, 1% Local) of $30.23. I think Etsy might turn this into the state themselves, but I need to get a sale so I can check. *pokes store*

If I had sold the same horse to someone outside of Virginia they wouldn’t have to pay sales tax, but they would be responsible for self-reporting and paying their own state’s sales tax themselves. Which no one ever does… except on large purchases like boats/cars/elephants, at which point the state sends you a nasty letter telling you to fork it over.

Mind you, if I sold the horse to someone who lives in Maryland, but the sale physically took place in Virginia (at a Live Show, Craft Fair, etc.) then I would collect the sales tax.

Step 2 – The Worksheet (ST-9A)

So the sales tax is collected and sitting in the bank account (in theory)– time to fill out the form! In a sane universe I would be able to do all of this online, but Virginia won’t let you unless you have employees. I’m tempted to get the FEIN number just for the convenience. *sighs* (Submitting the ST-9 Online)

Line 1 (Gross Sales) is the total of everything I sold this month, taxable and not taxable, but not including the sales tax.

Line 2 (Personal Use) is the amount of materials I bought with no sales tax (the bodies) that I took out of inventory for my own personal use. I do this sometimes when I end up with a custom that I want to keep for the Home Herd instead of selling.

Line 3a is for the tax exempt sales, which is where I put the sales for all my non-Virginia buyers.

Lines 3b and 3c deal with refunds to the customer for sales that I collected sales tax on (but not including the sales tax in these totals). It’s assumed that the sales tax was refunded, and therefore I don’t owe it to the state.

  • 3b is for refunds on items I sold in January that I refunded
  • 3c is for refunds on items I sold prior to January that I refunded

Line 3d is for Bad Debts – people who owed me money and never paid (and thus I never got the sales tax from them)

Since I am using Accrual and not Cash accounting (because of the inventory) I have to report the sales when I make them, which isn’t always the same month I get paid in. This line is for sales that I made in previous months where the buyer flaked out and never paid. It’s the same as 3c, only I never got the money to start with.

Line 3e is for “any other deductions allowed by law” and I haven’t ever used it.

Line 3 if I’m unlucky and I end up having more deductions than sales, I only get to claim up to the sales total– the rest will have to roll over into the next month’s form.

Line 4 (Total Taxable State Sales and Use) is how much I owe taxes on (which will never be a negative number!)

Line 5 (Food Sales) deals with food, so I can skip it.

Lines 6, 7, and 8 are straightforward calculations of the tax.

Line 9 (Dealer Discount, ST-9A) This is a discount given if you pay your taxes on time.

Line 10 is just math.

Line 11 (Prepaid Wireless Fee) is for cell phones, so I can skip it.

Lines 12 through 15 are just math.

Step 3 – The Check is in the Mail

Now that the worksheet is done, all I have to do is copy it over to the ST-9 and mail it in with the check!

And assuming I did the collection correctly in Step 1, the only time the sales tax will come out of my own pocket would be for sale I am waiting on payment for (checks, money orders, procrastinating e-payment folks, etc.).

Martha Bechtel

My name is Martha Bechtel and I write fantasy and science fiction stories, paint small model horses silly colors, cast resin and plaster magnets, code random code (and Wordpress plugins)... Come on in and join in the fun!

This Post Has 6 Comments

  1. Linda

    I am not condoning this at all and I really dont think its a good idea but is there any wonder people cheat on tax when its so complex? I would say its easier to become an expert in tax evasion than to actually do things legit!

    1. Martha Bechtel

      What I wouldn’t give for a flat tax! *wistful sigh* But when in doubt I just don’t take deductions—I figure I’d rather give Virginia a few extra bucks rather than go to jail over a misunderstanding. :p

      But yeah… sometimes it’s nice to daydream about finding the loopholes. Just as long as they stay daydreams! 😉

  2. Me

    Line 9, you get a discount if you file and pay on time. The discount amount is calculated based on the tax calculated on line 5 & 6.

    1. Martha Bechtel

      Thanks for the comment! 🙂

      It looks like they’ve updated the instructions since I posted this in 2012 and it’s much more obvious now what that line was for. I’ll go up date the post to reflect that.

  3. Moon

    Thank you so much for your posting. This is the only page with example!
    Is there any line for ‘cost of product’ and/or business expenses(mailing supplies, etc)? I am a first-time submitting ST-9 this month.

    1. Martha Bechtel

      I haven’t looked at the ST-9 recently, since I’ve moved to a hobby business (made negative net money again this year! *sighs*), but Sales Tax isn’t the same as Income Tax. Sales Tax is aimed at the buyer, not the seller, and all it cares about it the total amount of money they spent. You are just collecting it on behalf of the State.

      You’ll have a separate Income Tax that you will need to pay on the amount of money that you earned and that’s where you get to deduct the product costs and overhead. 🙂

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