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Another beginner's question - local taxes

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  • Another beginner's question - local taxes

    We have a Business and Occupation tax in the city of 1% that only applies when you call on a house within the city limits. Do any of you have to deal with this and if so, how do you track those that are within the city and those that are outside. (Not to mention the different taxes to the other two states that I may cover). Argh.

    Pass the Jack.......and a sober accountant.

  • #2
    Check on the tax situation with an accountant or business tax specialist.

    In our area, you must collect city tax only if you are physically located in the town or city. If you are mobile you just collect the state sales tax for the county you are physically located in (your business nexus). We have three counties in our coverage area. We have to have business tax receipts for each county (Florida's term for a business license) but we do not have to purchase CITY business tax receipts, as our business nexus is outside the city limits. Of course, the sales tax in Florida only applies to retail sales of products, services are not taxed (yet!)

    We decided not to service our neighboring state of Alabama as the tax and corporate laws made the costs not worth the limited extra business.

    Your mileage may vary.
    Last edited by kats_melody; 12-03-09, 08:43 AM.
    "With God's help, all things are possible!"
    Laura Lee Ray
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    • #3
      My accountant says

      you charge the tax for where the work was performed. So, when I groom at a city residence, I charge the city's tax. When I groom at a county residence, I charge the county's tax.

      I use old fashioned 4x6 cards to keep track of the client's info and the groom dates and details. On this card I also note if the client is within the city or the county, that way I know what tax to charge when I write up the receipt. I use Quickbooks once I get home (or at the end of the week usually) and it is set up to keep track of all that as well.

      When you're mobile, you don't typically have that many clients and pretty soon you have it all memorized anyway!


      • #4
        So do you add this B&O tax on the receipt? Has anyone ever complained?


        • #5
          Multiple states, well that can make things more confusing. Keep in mind that in some states like WA state, B&O tax cannot be charged to the customer. Our business pays B&O tax out of our pocket based on gross sales, only sales taxes are collected from clients and transferred to a revenue dept that then divides it up to state, county and local jurisdictions. So every state has different methodologies and you have to get a different tax collecting setup with each state.
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          • #6
            The taxes I collect

            are not B&O, they are sales tax only. No one complains about being charged the sales tax (and it shows on the receipt) as that is just the way it is.