Fournines above is correct. Here's a little more info:
Originally Posted by
rawresale
So, I have started organizing things to do my taxes for the year. Part of this is paying the sales tax that I've collected to California.
Have you really collected sales tax from the scrap yard? In other words, have you calculated and collected 7.5% (maybe 8% in Sacramento) on the final sale price of items sold to the end user? If you did, you are legally a tax agent for the state and have to send what you collected to the Board of Equalization.
In short, if you just sold stuff to a scrap yard, you didn't collect sales tax and you don't have to send anything. For sales tax. If you assessed and collected tax on retail sales, you have to send that in of course.
Originally Posted by
rawresale
As a seller, I am supposed to collect tax on everything I sell unless provided with a valid seller's permit from the purchaser. Since I am selling things to the scrap yard, I would need a seller's permit number from them so I don't have to pay sales taxes on the metal that I have sold, right?
No. But if the owner is right and you are crazy, and you really want to go by the book, you would fill out California BOE401EZ and add the scrap amount to line 1 and line 4, resulting in zero tax due on that amount. If audited, you would get your scrap yard to fill out a BOE-230, resale certificate.
Originally Posted by
rawresale
is scrap metal a non-taxable good?
Yes, virtually all of the time. It is only taxable if you sell it to the end retail consumer. For example, if you fabricated a sculpture out of scrap iron and sold it to someone who displayed it on their front lawn. You would collect sales tax on that sale.
Originally Posted by
rawresale
Should I be paying sales tax on what is sold to the scrap yard?
No. Not sales tax. And again, you only "pay" sales tax on what you purchase. You "collect" sales tax for the state on items that you sell on a retail basis.
Income tax is a whole different can of worms; see JohnC 4x4 comment above.
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