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Business Sector FAQs Sector 42: Wholesale Trade Resources for this sector   List of all forms in this sector   General Q's and A's Questions about this sector are provided below and apply to the Sector as a whole.

Questions

Form Questions

1.    What should I report as sales for my establishment (Item 4a)?

2.    What if I have commissions but not sales information (Item 4a)?

3.    What are domestic transfer billings (Item 4g)?

4.    What are leased employees (Item 7)?

5.    How should I report inventories (Items 10 and 11)?

6.    What are operating expenses (Item 15a)?

7.    What are purchases (Item 15b)?

8.    What is my kind of business (Item 18)?

9.    What if I operate several kinds of business (Item 18)?

10.  What if my kind of business is not listed (Item 18a)?

11.  What is a type of operation (Item 18b)?

12.  What if my commodity group is not listed (Item 22)?

13.  How do I report commissions received from others (Item 22)?

14.  What if an employee performs several functions (Item 26)?

15.  What is a drop shipped sale (Item 26)?

Answers

Form Questions

1. What should I report as sales for my establishment (Item 4a)?

Please report total sales of merchandise and other operating receipts, including shipping and handling charges, but excluding sales taxes and Hawaii?s General Excise Tax. See the Information Sheet for examples of what to include and exclude in Item 4a.

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2. What if I have commissions but not sales information (Item 4a)?

If you know the amount of your commissions but not the gross sales on which they were based, use your commissions to estimate the sales value. For example, if your average commission rate is 5 percent and your commissions totaled $200,000, divide your total commissions by your average rate to estimate your gross sales as $4,000,000.

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3. What are domestic transfer billings (Item 4g)?

A domestic transfer billing is the value of products one establishment sends to another establishment within the same company. The value reported in Item 4g should be the total market value of products transferred, and this amount should be excluded from the value of total sales and receipts reported in Item 4a, except for petroleum. See the Information Sheet for more details.

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4. What are leased employees (Item 7)?

A leased employee is a full or part-time employee of a business or organization that has contracted with an employee leasing service (also known as a professional employer organization) to obtain human resource management services. The employee leasing company provides a wide range of human resource and personnel management services, such as payroll accounting, payroll tax return preparation and filing, benefits administration, recruiting, and labor relations management, to the client business. The employee leasing company and client organization operate as co-employers with regard to the human relations responsibilities to the employees covered by their contract. The employee leasing company pays wages and employment taxes of the leased employees out of its own accounts.

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5. How should I report inventories (Items 10 and 11)?

Inventories are the value of merchandise an establishment holds for resale, excluding any merchandise it has rented out and any merchandise it may hold but does not own. Report the market value of inventories using generally accepted accounting principles.

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6. What are operating expenses (Item 15a)?

Operating expenses are the expenses of conducting an establishment's wholesale operations. Examples of operating expenses are payroll, employee benefit contributions, commissions paid to other companies, office supplies, office and equipment rentals, costs for contract work, and taxes. Examples of excluded expenses include cost of goods sold, interest expense, and withdrawals by partners or proprietors.

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7. What are purchases (Item 15b)?

Purchases are the costs of merchandise purchased for resale and for which the establishment took title in 2002, whether or not payment was made in 2002. Include any merchandise trade-ins allowed. See the Information Sheet for examples.

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8. What is my kind of business (Item 18)?

Kind of business refers to the principal kind of product or goods that the reporting establishment buys and sells at wholesale. Please mark an "X" in the box that best describes the reporting establishment's kind of business.

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9. What if I operate several kinds of business (Item 18)?

Please choose the one kind of business description that best describes your establishment's primary business activity. An establishment's primary business activity is the activity that generated the most receipts or revenue for the establishment during 2002.

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10. What if my kind of business is not listed (Item 18a)?

Please mark an "X" in the box next to "Other kind of business" at the end of the list, and describe your establishment's principal business activity in the space provided.

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11. What is a type of operation (Item 18b)?

Type of operation refers to the principal operating method used by the establishment to buy and sell products or goods. See the Information Sheet for examples of each type of operation.

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12. What if my commodity group is not listed (Item 22)?

Please use the "Miscellaneous commodities" spaces (line 24) to describe the commodity group(s) and report its dollar or percentage sales.

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13. How do I report commissions received from others (Item 22)?

Commissions should not be reported in Item 4. Please do not include commissions in the sales you report in Item 22, either on a commodity group line or a "Receipts for... services" line. See your Information Sheet for Items 4 and 22 regarding what values to report, and with examples of inclusions and exclusions.

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14. What if an employee performs several functions (Item 26)?

Please list each kind of employee according to the primary function they perform. If employees perform more than one function, their primary function is the one that requires the largest share of his or her time.

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15. What is a drop shipped sale (Item 26)?

A drop shipped sale occurs when goods are shipped directly to a customer's location without physically entering the wholesale establishment's facility.

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