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Do y'all charge sales tax?

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Forum topic by TheWoodenOyster posted 09-04-2014 10:13 PM 809 views 0 times favorited 24 replies Add to Favorites Watch
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TheWoodenOyster

898 posts in 600 days


09-04-2014 10:13 PM

Topic tags/keywords: tax

This one is pretty straightforward.

I am trying to start a legitimate side business here and I am wondering if I am an idiot for considering charging sales tax. My wife seems to think I am being too much of a rule follower. Tell that to all the tax evaders in jail…

Anyway, do y’all charge sales tax?

Thanks

-- The Wood Is Your Oyster


24 replies so far

View copcarcollector's profile

copcarcollector

156 posts in 783 days


#1 posted 09-04-2014 10:38 PM

Even if it is a side business, if you are trying to be legit, charge sales tax as required by local authority. To skirt around it is just inviting a problem later.

Have you also looked into a business license with your state and/or city/municipality? What about insurance?

I am a business owner in Nevada and have to do all those crazy things, including filing a list of people in my LLC yearly, which is one person, me, and it costs $200 for the ‘privilege’! I charge sales tax but only for sales within Nevada. Ahhh what fun being in business is———

View comboprof's profile

comboprof

277 posts in 400 days


#2 posted 09-04-2014 10:44 PM

You are legally and morally obligated to do so.

-- -- Cheers, Don K. (Michgan's Kewenaw peninsula)

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Dabcan

92 posts in 1337 days


#3 posted 09-04-2014 10:52 PM

Depends where you are. In Canada you don’t have to charge tax unless you make more than $30K/year, but if you do you can also get a tax number meaning you get the tax back from all your business expenses.

-- http://www.craftcollective.wordpress.com

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TheWoodenOyster

898 posts in 600 days


#4 posted 09-04-2014 11:20 PM

I have always sort of felt like I ought to, legally and morally. The state of Texas has done a lot for me, so I don’t really mind paying them back, I suppose.

I am the only one, so I don’t think I need to do any business licenses, insurance, etc. I haven’t heard anything about that in Texas.

Dang, it is just hard to swallow the fact that in earnest, you have to jack up your price by 30 to 40% in order to cover your income tax and sales tax. Sort of a bummer, but I guess it is what it is.

-- The Wood Is Your Oyster

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Dallas

2968 posts in 1153 days


#5 posted 09-04-2014 11:33 PM

From what little I know while we were setting up our RV park for the new owner, you cannot legally charge sales tax without a sales tax number. To get the sales tax number you need to get a local business license, to get the local business license you will need to show liability protection, (insurance), business insurance and if the business is run out of your home, home owners insurance with a rider for your shop.

You will also get into local, county, state and federal tax issues. Talk to your local, friendly, tax accountant at the local bar.

Good luck!

BTW, my information comes from our county clerk in Robertson county, along with all the other paperwork we had to file when we got the local license because the clerk forwarded our information to the rest of the government.

-- Improvise.... Adapt...... Overcome!

View Steve Peterson's profile

Steve Peterson

250 posts in 1748 days


#6 posted 09-04-2014 11:52 PM

I am in California and they make it reasonably easy to collect and turn in sales tax. They hold a free hour long class about once a month in Sacramento. I guess that that they would also have the class in every big city. There is some type of a seller’s permit that you need to file. It is either free to file, or really cheap like around $25. They seem to go out of their way to make it easy for small businesses to collect money for them.

-- Steve

View DocSavage45's profile

DocSavage45

5041 posts in 1508 days


#7 posted 09-05-2014 01:48 AM

All good points. If you are in business you should checkout the pro’s and cons. items vs service as my dentist doesn’t charge a sales tax. If you’re in it 1/2 time or full time being a business owner has advantages.

Sale away! :<)

-- Cau Haus Designs, Thomas J. Tieffenbacher

View Iwud4u's profile (online now)

Iwud4u

373 posts in 194 days


#8 posted 09-05-2014 02:11 AM

Sales Tax is tricky.
I’ve gotten different answers from the tax department, by different people in the same department.

Charge sales tax, but don’t pay tax when you purchase material?
If it’s installed, like a built in, then it becomes real property and sales tax is not charged, but pay tax on material?
Going through a designer, don’t charge sales tax it’s up to them to collect it when they sell it to the customer, but, pay tax on material?
I don’t have the answers to all of these (and there’s many more, such as use tax from out of state purchases) and they may differ depending where you are, but these are questions you need to ask.

I’ve been audited by the tax department before, (thank God I keep excellent records) and I got different answers to the above questions, so I just pay tax on all my material when I buy it, and I only charge sales tax when it’s a free standing project (like a table or buffet).
I know I pay more because I’m paying tax on material when I charge sales tax to the customer and I shouldn’t be, but next time I get audited I won’t have to pay.
90 percent of my work is real property that I don’t charge sales tax on, so it’s not too bad.

-- It's far better to be criticized by a wise person than applauded by a fool --

View CharlesA's profile

CharlesA

1514 posts in 463 days


#9 posted 09-05-2014 02:20 AM

It really depends on the state. when I was in grad school in NJ, and I had a computer consulting business. I collected and sent in sales tax—at that point didn’t cost me anything to “be qualified” to collect it. Just sent it in (quarterly?). Relatively painless.

I wanted legit clients, so I ran a legit business.

-- "Man is the only animal which devours his own, for I can apply no milder term to the general prey of the rich on the poor." ~Thomas Jefferson

View Jim Finn's profile (online now)

Jim Finn

1684 posts in 1587 days


#10 posted 09-05-2014 01:25 PM

I include the sales tax in my prices and pay them to Texas. Sales tax permit here is free and simple to get but then the city or county you live in will write you to pay personal property tax on all your equipment. I have about $10,000
worth of equipment and that tax for me is less than $100 a year. One compensation for all this is, I do not pay sales tax on purchases of wood or anything related to this small, part time, business.

-- In God We Trust

View comboprof's profile

comboprof

277 posts in 400 days


#11 posted 09-05-2014 04:12 PM

I recall in New York you are supposed to display taxes as a separate item and can not hide it in the price. I think the idea is that customers have a right to know easily what taxes they are paying.

-- -- Cheers, Don K. (Michgan's Kewenaw peninsula)

View Fred Hargis's profile

Fred Hargis

1817 posts in 1159 days


#12 posted 09-05-2014 04:24 PM

It’s not a choice you get to make, you have to follow whatever the law says.

-- Our village hasn't lost it's idiot, he was elected to congress.

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comboprof

277 posts in 400 days


#13 posted 09-05-2014 04:34 PM

Yes, and thats the bottom line. You must find out what is required by law: for where you are selling, for what you sell and for how you sell it. It’s not uniform across the states.

-- -- Cheers, Don K. (Michgan's Kewenaw peninsula)

View mrjinx007's profile

mrjinx007

1533 posts in 433 days


#14 posted 09-05-2014 04:45 PM

Most of my sells are online to other states, so, no tax. But the stuff I sell in state, I bake in the tax to the price and report every penny be it cash or checks or cards. State figures out how much tax I owe them and the counties I make the sales and charge me accordingly. Once you get to be big enough to have a few politicians on your speed dial, then they will show you how to legally evade taxes like they do.

-- earthartandfoods.com

View JAAune's profile

JAAune

823 posts in 982 days


#15 posted 09-05-2014 05:42 PM

We do but most of our work goes to non-profits, churches and other contractors. In practical terms, this means we seldom sell to an end-user that is required to pay sales tax.

-- See my work at http://remmertstudios.com and http://altaredesign.com

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