Sales Tax Horror Stories

[Frank Petronio]

If only it was Halloween.

I'm particularly interested in hearing your sales tax horror stories from being a part-time or semi-professional photographer, extra points for New Yorkers.

[Black Lightning]

Well, I am an accountant With a practice in New York. I don't have any horror stories of my own. Clients of mine, that's a different story. Sales tax problems are why many of my clients came to me in the first place. I have kept a few of them from going to jail.

[BrianShaw]

Sales tax in CA needs to be paid in terms of sales per county (tax rate can vary by county) - a major book keeping PIA when I had a business because we couldn't afford an accountant to do that for us. Other than that it was quite straight forward.

[eddie]

ny is done quarterly. you better get em done before the end of Dec.

what sucks the most about NY is that if you sell to some one in a different area you must collect that tax (just like brian says above). so if rochester tax is not 8% like it is here in ulster county then you would collect 8% from me as i am in UC. that is the PITA of it all.

if you collect less than $3000 (so $40,000 in sales) in one year you do not have to file quarterly....BUT you must file quarterly for teh 1st year....then you can file once per year after that.

hope this helps.

have fun with the tax man.

eddie

[Black Lightning]

ny is done quarterly. you better get em done before the end of Dec...

Actually, New York sales tax returns for the third quarter were due yesterday.

[Corran]

In my "real" business I file as a sole proprietor. I collect no taxes but am charged income tax or whatever from what I bring in (I can't charge taxes anyway on services I believe, which is 99% of what I do). Luckily I have plenty of write-offs every year that keep most of the taxes away. I usually get a small refund.

I don't have the money for an accountant, nor do I think I need one. I hope that's true anyway

Interestingly I have no problem filing LF camera gear as a business expense, compared to digital stuff, because apparently modern cameras are classified as hobbyist stuff, not professional work gear, or some such thing. They only give you so much room for the description so not like they can decipher "Chamonix4x5ViewCam" anyway!

[Bryan Lemasters]

In my "real" business I file as a sole proprietor. I collect no taxes but am charged income tax or whatever from what I bring in (I can't charge taxes anyway on services I believe, which is 99% of what I do). Luckily I have plenty of write-offs every year that keep most of the taxes away. I usually get a small refund.

I don't have the money for an accountant, nor do I think I need one. I hope that's true anyway

Interestingly I have no problem filing LF camera gear as a business expense, compared to digital stuff, because apparently modern cameras are classified as hobbyist stuff, not professional work gear, or some such thing. They only give you so much room for the description so not like they can decipher "Chamonix4x5ViewCam" anyway!

What services are or are not subject to sales tax, and what that tax rate is, varies from state to state. Here is a good starting point:
http://www.taxadmin.org/fta/pub/services/services.html

[Corran]

Great link, thanks! I had a look and not surprisingly my business or even something similar isn't even listed (recording engineer, as well as freelance musician). Some categories that might have been very vaguely associated were exempt luckily so I'm almost sure I'm safe. Probably best to consult a tax expert, blah blah blah but I guess I take my chances...

[jnanian]

i always wondered if there were USE TAX horror stories.

[Pat Kearns]

i always wondered if there were USE TAX horror stories.

USE TAX can be more devastating to a company than people realize. Buying tangible personal property thru mail order, internet, or telephone out of state can be subject to the same sales tax rates if the vendor/dealer didn't charge sales tax. I would recommend everyone to visit their individual state website and "TRY" to read the sales & use tax laws, rules, & regulations. I will guarantee you will come away with a headache and more confused than ever. You may ask how I can guarantee this? Simple, I do this five days a week for a company with operations in 10 different states. Every state's sales & use tax regulations are different and very complicated. So, I pray I can retire before the Horror Story kills me.

It's been interesting reading the various comments but very early in the thread someone said consult a good accountant. No wiser advice can be given.