I am looking for information on how to give away free promotional items regarding sales tax and accounting etc etc. Please do not say just box them up and ship them wherever desired when responding to this post.
Let’s suggest that it cost me $10 to have made and received the product in my possession. Would I just turn around and pay “use tax” on the $10 for the product that I am giving away to whatever address it ships to in the USA? I would be pulling it out of inventory and “using” it as promotional items that I give away to the end consumer for nothing.
This has been some of my idea in order to spread the word on my product. Unfortunately it’s not as easy as just having them shipped from the fulfillment center to an end location. I thought about also doing this with some t-shirts too.
Any ideas or things for me to research? Thanks
Not an accountant but giving away free promotional items sounds like advertising to me.
So I’d have an expense in my p&l called PROMOS and add to that account the per unit COGS for each item given away, plus the cost of shipping. Then deduct that same per unit COGS from your inventory account.
That way you’re keeping track of the economic cost of those promos, and properly keeping track of your inventory.