Remember: Enter the gift basket business contest. Get details here.
Okay, who’s running a business and not remitting state sales taxes? I just read a story about a Minnesota-based business owner who decided to keep all the money.
The story, published in StarTribune.com, uncovers more than just a home-based owner who innocently overlooked his obligation. But what’s basic to us is understanding that if you’ve registered your gift basket business in the United States:
1. Gift baskets are considered a luxury and are therefore taxed when sold to individuals or firms in your state.
For example, if a client lives in Vermont and your business operates in Vermont, the client is taxed. If a client lives in New York and your business operates in Vermont, the client is not taxed.
2. Gift basket profits and losses are entered on the Internal Revenue Service’s (IRS) Schedule C at the end of each tax year if you operate as a sole proprietorship, partnership, or limited liability corporation (LLC).
Meet with your accountant to make sure your taxes are filed using the correct documents, and believe me, Schedule C is just one of many necessary forms.
3. Gift basket state sales tax is remitted either monthly or quarterly depending on your state’s laws.
The business section on your state’s Web site provides more details on when the tax is due, and your accountant will also know.
Many states only accept electronic payments. Put the payment schedule on your calendar so that you pay on time.
If you make gift baskets outside of the U.S., a certain department within your country will provide all details on how to remit monies due.
I used to create massive spreadsheets by hand to determine my sales and taxes. Thank goodness that was long ago.
Now in QuickBooks, by clicking the Vendors — Sales Tax — Pay Sales Tax button, I instantly know my income and sales tax liability, and the online payment takes about five minutes. No more fingers and toes!
The Minnesota guy faces “up to five years in prison, up to a $10,000 fine, or both.” That’s no way to run a business.
Do you believe that one of your competitors is not paying their fair share of sales tax?
No related posts.
