Kai operates the Surf Shop in Laie, Hawaii, which designs, manufacturers, and customizes surf boards. Hawaii has a 4 percent excise tax technically paid by the seller. However, the state also allows "tax on tax" to be charged, which effectively means a customer is billed 4.166% of the sales price. Determine the sales and use tax liability the Surf Shop must collect and remit -or that the customer must pay - for each of the following orders:
a) Bronco, a Utah customer, places an internet order for a $1,000 board that will be shipped to Provo, Utah where the local sales tax rate is 6.25 percent.
b) Nick, an Alabama resident, comes to the retail shop on vacation and has a $2,000 custom board made. Nick uses the board on vacation and then has the Surf Shop ship it to Tuscaloosa, Alabama where the sales tax rate is 8.5 percent.
c) Brady, a Michigan resident, places an order for a $2,000 custom board at the end of his vacation. Upon completion, the board will be shipped to Ann Arbor, Michigan, where the sales tax rate is 7 percent.
d) Bo, a Nebraska resident, sends his current surfboard to the Surf Shop for a custom paint job. The customization services come to $800. The board is shipped to Lincoln, Nebraska, where the sales tax rate is 7 percent.