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

[Richard Wasserman]

I had a wholesale business and one of my customers unbeknownst to us let his resale number lapse. We were audited by the state who found the problem. Between the penalties, interest, and the formula they used to assess how much we owed them (5 years worth) they hurt us significantly. They then of course went after my customer for nonpayment of taxes.

[Kirk Gittings]

Richard, I had a similar issue with a magazine publisher here and got nailed for thousands though in actuality it was completely his fault. I just got caught up in his audit.

[Jerry Bodine]

A few years ago I arranged to have some of my photos hung for a 90-day period in a local framing shop that had a classy setup. When discussing with the store manager about all the details of the arrangement, I asked how the sales taxes would be handled. She said I should get a tax number and report sales to the state (Washington) and city. In retrospect that was not a very bright thing to do. My interest as expressed in my application for the tax number was in sales of b&w landscape prints, but as soon as my information got into the state's hopper, I started getting phone calls from folks who found me on the internet and were looking for a photographer to do (a) portraits, (b) aerials, (c) weddings, etc. etc. etc. Then I discovered that Dunn & Bradstreet was putting false info about me on the internet that showed my "business" income to be $50K annually - an outright lie - along with other misinformation. Ever since that time I've been trying to get D&B to take that stuff down from the internet and it hasn't happened yet. Then WA state signed into an agreement with several other states to start charging sales tax according to where the product was DELIVERED in-state rather than where the product was SOLD (the intent being to level the playing field for in-state businesses who were being hurt by tax free online purchases). What a bookkeeping nightmare. And the state wonders why businesses are inclined to go elsewhere! Geez.

[BrianShaw]

... charging sales tax according to where the product was DELIVERED in-state rather than where the product was SOLD ...

That distinction, by the way, is how CA did sales tax when I was in business (within the mailorder era, but before the internet sales era). When I wrote "sold" in my previous post I meant sold-and-delivered. (I never had an experience where something was sold but not delivered, or sold to someone in one county and delivered to another county... but it certainly could have happened.)

[Pat Kearns]

Frank, here is my horror story. I used to operate as a part time photographer shooting weddings, portraits and babies from 1975-2000. Got the business licenses, filed sales taxes and income taxes as a legit operation. Quit operations around 1995 but kept my business licenses current annually. That meant having to file zero tax returns monthly. After a couple of years of zero returns I started sending them in quarterly. Well that didn't sit well with one of the revenue departments and I got a computer generated form letter saying they were going to penalize me 100% of the monthly sales tax amount I was paying for late payment of taxes. I called them and tried to explain that I wasn't doing any photography business anymore and sales taxes were zero. The clerk wasn't in a good mood and read me the riot act. I told him I kept my business licenses current annually even though the business was defunct which was in essence giving them free money for annual business licenses. Filing monthly zero sales tax returns didn't make sense when they should be quarterly or occasional filings at best. The clerk became more hostile. I said it would be easier and cheaper for me to not renew my licenses when they became due again. He said to go ahead and do that. So I did what he said and quit giving them free money.

[Ari]

How about living in Canada and paying 15% on almost everything you buy, then paying further Customs and Duty fees once your purchase crosses the border?
Bone-chilling enough for you?
The worst part is that this is supposed to give us a top-drawer medical/health system and better roads and schools, but I only see a large decline in all services.