Shownotes
As your business grows, reporting sales tax gets a whole lot more complicated.
From adding new types of products or services with different sales tax requirements to navigating the different sales tax laws in different states, the more your business grows, the more complex collecting and reporting sales tax becomes.
In this episode, Sydney and Kristen explore what you need to know about sales tax so you understand how it evolves as your business grows and the role your bookkeeper can play in supporting you with collecting and reporting the right amount.
Tune in to hear:
03:28 — What types of businesses need to pay sales tax (including a few that commonly get overlooked)
08:52 — What is Nexus and how to prepare for it (this is especially important if you sell in multiple states)
12:01 — Sales tax exemptions to know
23:05 — How to make sure you're paying the right amount on sales tax and the common mistake that leads many entrepreneurs to overpay
📈 UNDERSTANDING YOUR PROFIT AND LOSS GUIDE
❓TAX PLANNING QUESTIONS TO ASK YOUR ACCOUNTANT
Get the Tax Planning Questions Guide
🛍 75+ TAX WRITE OFFS
✅ BOOKKEEPING CHECKLIST
Get the Book Keeping Checklist
💵 BOOKKEEPING AND FINANCIAL ANALYSIS SERVICES FOR BUSINESS OWNERS
Apply for Bookkeeping or Financial Analysis Services
👋 CONNECT WITH SYDNEY & KRISTEN
Website: https://knowyourworthpgh.com/
Instagram: https://www.instagram.com/knowyourworth_pgh/
YouTube: https://www.youtube.com/channel/UC3wzOVSDSC-xsmLg8JJ8MJg/
Transcripts
When you get to the large companies, there are entire departments,
Speaker:you know, just for this.
Speaker:I was just thinking like if this world was like the Hunger Games
Speaker:and we got like assigned jobs.
Speaker:Yeah.
Speaker:I got assigned that job.
Speaker:I would be so mad.
Speaker:I would be so mad.
Speaker:Send me to the Hunger Games right now.
Speaker:Put me in the ring.
Speaker:I volunteer as tribute.
Speaker:I don't want to look at sales tax.
Speaker:Good day.
Speaker:Hello.
Speaker:Welcome to the Know Your Worth Podcast.
Speaker:I'm one of your hosts, Sydney, your money maven.
Speaker:And I'm Syd's dime piece bestie Kristen.
Speaker:And we are here for our episode today about sales taxes.
Speaker:Yeah, rock my world.
Speaker:I know.
Speaker:I actually hate sales taxes.
Speaker:I, I just, I, this is a, you know, sorry government if you're listening.
Speaker:But I just, I really don't like sales taxes.
Speaker:I just think they're silly to be honest.
Speaker:You know, Hey, you want to sell something.
Speaker:I'm the government.
Speaker:Oh, you'd like to sell something to somebody else?
Speaker:Well, I'd like a little piece of that.
Speaker:So, let me play into that, please.
Speaker:Yeah, like you didn't do anything for us.
Speaker:Yeah, except for allow me to.
Speaker:That's weird.
Speaker:So, I don't know.
Speaker:I don't like sales taxes, but, you know, don't tell the government.
Speaker:Let's work it out.
Speaker:Let's yeah.
Speaker:So my business doesn't have to pay sales taxes because the products
Speaker:or serve the services that we provide are not sales taxable.
Speaker:So certain businesses have to pay sales taxes based off of what they are
Speaker:providing and certain businesses do not.
Speaker:And it also depends on the state that you're in.
Speaker:So we're going to talk mostly about Pennsylvania today, but if you're not
Speaker:in Pennsylvania, definitely look up your state's requirements specific to
Speaker:where you're at, but we are talking mostly about Pennsylvania today.
Speaker:Okay, so what kind of businesses do you pay sales taxes?
Speaker:Yeah, so there's uh, it's more on the product or like the type of thing that
Speaker:you're selling rather than just the whole business So retail sales are for
Speaker:you know, personal tangible property.
Speaker:So furniture electronics, some clothing and certain services are
Speaker:required to have sales taxes in clothes, in clothing and Pennsylvania.
Speaker:So like clothing anything that's deemed for clothing purposes,
Speaker:what's the technical term?
Speaker:Like it's a necessity is not sales taxable.
Speaker:So, in Pennsylvania, clothing is not sales taxable because Pennsylvania
Speaker:deems that like a necessity.
Speaker:So they don't put sales taxes on that.
Speaker:But certain clothings or like accessories have sales taxes to them because they
Speaker:don't deem that always a necessity.
Speaker:So certainly, yeah, who do they think they are?
Speaker:Let's rewrite some of those rules because my purse is now, but so
Speaker:some products for clothing purposes are sales taxable and some aren't.
Speaker:So if you are in retail sales, you should really be looking up the type
Speaker:of products that you're selling and if there are sales tax associated
Speaker:with those types of products.
Speaker:Digital products are required to have sales taxes on them.
Speaker:Ebooks, music, downloads, streaming services all have
Speaker:sales taxes applied to them.
Speaker:And this was a topic of conversation that a lot of people weren't sure about a
Speaker:while ago with when it comes to services.
Speaker:If your service results in a digital product, it should have sales taxes on it.
Speaker:So photographers, your photography services.
Speaker:Have a digital product that can be downloaded.
Speaker:That is the product of your service.
Speaker:You have to charge sales taxes.
Speaker:Wow.
Speaker:Mm hmm
Speaker:So like I said certain services that you may not be sure so again I would look up
Speaker:your specific service, but some examples are like printing services, laundry
Speaker:services, dry cleaning, some recreational activities and like other services like
Speaker:haircuts, you know, there's sales taxes associated with those services as well.
Speaker:So haircuts aren't necessary?
Speaker:I know.
Speaker:Well, I guess maybe if it was just getting a military cut,
Speaker:then there's no sales taxes.
Speaker:You're going, you're doing a buzz cuts are non sales tax.
Speaker:Same.
Speaker:Same.
Speaker:Bolt cuts are non sales tax cut.
Speaker:Exactly.
Speaker:Oh, that would be pretty funny actually if you knew that you could save on
Speaker:getting like your typical standard.
Speaker:I would be a little bit fearful of the uh,
Speaker:The non sales tax cut?
Speaker:Yeah.
Speaker:It just seems like kind of basic.
Speaker:Can you imagine how many people would actually do that though
Speaker:just to like not pay money to the government for their haircut?
Speaker:Just like five bucks.
Speaker:Oh, that would be that would be a scary world if everybody had the
Speaker:exact same haircut because no one wanted to pay sales taxes on it.
Speaker:Anyway, yes.
Speaker:So when it comes to food, restaurants and prepared foods, they have
Speaker:different regulations as well.
Speaker:So for certain prepared foods don't have sales taxes associated with them.
Speaker:So again, if you're in that industry, really look up what the
Speaker:type of product that you're selling.
Speaker:And if it's prepackaged food, there are sales taxes.
Speaker:If it's like restaurant food where you're eating it right then and there, there's
Speaker:not necessarily sales taxes on that, but then there's also going to be the alcohol
Speaker:taxes, something totally separate too.
Speaker:My brain cells.
Speaker:I know there's a lot.
Speaker:Yeah, sales tax can be a little bit scary because I think some people want to
Speaker:pretend like they don't have to pay sales taxes on their product or they think that
Speaker:the government will tell them that they have to pay sales taxes on their products.
Speaker:And so then they just don't and then it's a little bit too late or
Speaker:you're in a hole there or it's just, you know, you've never done it and
Speaker:so you don't know what to do then.
Speaker:So it's always a good idea to just really do your due diligence with
Speaker:what products and services you're offering and just do a quick Google.
Speaker:It is very easy to find if your product is sales taxable.
Speaker:There are some random ones that were, yeah, yeah, there's some random ones.
Speaker:So, you can always go on MyPath for the, you know, that's the
Speaker:Pennsylvania Department of Revenue state site and look on there to
Speaker:see what products and services.
Speaker:They have some pretty good, like, group forums for, hey, what's this
Speaker:product, is this product sales taxable?
Speaker:They're also very quick with their help desk that you can call and talk to
Speaker:somebody that will give you feedback.
Speaker:But so one that always confused me at first was, or used to confuse
Speaker:me was advertising revenue for like ads online on websites, if those are
Speaker:taxable or not, and in some states they are, in some states they're not.
Speaker:So again, like you really want to make sure where are these
Speaker:ads going to be posted and how are you going to determine that.
Speaker:It's different.
Speaker:It's different.
Speaker:Yeah.
Speaker:Yeah.
Speaker:So that goes into our next really fun part of sales taxes, if, if
Speaker:you are an out of state seller.
Speaker:So I'm going to talk specifically to Pennsylvania.
Speaker:I don't know what the requirements are in other states.
Speaker:You'd have to look because there are 50 of them.
Speaker:So, they change state by state.
Speaker:And this is one task I did not want to have to do at my last job that I was at
Speaker:because we really had to calculate this.
Speaker:And it was a big deal for sales taxes is determining if
Speaker:you have nexus in the state.
Speaker:What's nexus?
Speaker:So nexus is, is if you have enough sales, say you're from Ohio, West Virginia,
Speaker:New York, New Jersey, Wyoming, anywhere else, another state, and you're selling
Speaker:product to people in Pennsylvania.
Speaker:In Pennsylvania, if the business has sold more than 100, 000 worth of their
Speaker:product, they have established nexus.
Speaker:That's what that is.
Speaker:So you've established nexus.
Speaker:So now you have to pay sales taxes in Pennsylvania.
Speaker:And so if you sell a national product and you hit these parameters in all
Speaker:these states, you need to be filing sales taxes in all of these states.
Speaker:So if you're someone that's selling a national good, you know, you're
Speaker:shipping and you're selling.
Speaker:So the last company I worked for, they sold robots.
Speaker:So you sell one robot, that's over a hundred thousand dollars.
Speaker:They were selling millions of dollars worth of robots.
Speaker:And so any state basically that we sold a robot to, , we had nexus in that state.
Speaker:So then you have to go on and you need to determine what the requirements are.
Speaker:You need to make sure that you apply for the sales tax license in that state,
Speaker:and then you're admitting based on the schedule that's assigned to you.
Speaker:Oh my god.
Speaker:There are programs that will help you with this.
Speaker:If you have a company that's this large or has this many products, they make
Speaker:tax software for sales taxes that will help you basically, they either connect
Speaker:with your point of sale software, where if you sell the product it'll register
Speaker:that as a sale in that tax software, and it'll tell you when you've hit the
Speaker:nexus in all of those states, and then it will help you remit the sales taxes.
Speaker:Okay.
Speaker:So there are lots of programs out there that will help.
Speaker:So if that sounds like something you need, if you've, if you're a retail
Speaker:sales and you've been shipping all across the country and you're pretty ha
Speaker:heavy in the sales and you didn't know that, I would highly recommend getting
Speaker:that software just so that you know.
Speaker:You're submitting things the right way.
Speaker:There's a couple different ones.
Speaker:Honestly, I'd have to look.
Speaker:So you could just Google it.
Speaker:Yeah.
Speaker:Yeah.
Speaker:I think ones like tax act.
Speaker:There's and I, I don't really use any of them for the companies that
Speaker:we work with now because there's, we don't have a lot of companies
Speaker:that have national retail sales.
Speaker:The companies that we work with at file in multiple states are very easily trackable.
Speaker:So we have clients that we work with, but we file for them in
Speaker:Pennsylvania and Florida or Pennsylvania, New Jersey, Florida.
Speaker:So we don't have to worry about tracking sales.
Speaker:All over.
Speaker:It's just, they offer a service.
Speaker:We know what the services are.
Speaker:They're registered in these states and then we remit to those states.
Speaker:So, the most that we have is a company that is three states right now.
Speaker:So, there are a lot of different softwares.
Speaker:So again, it's just probably as simple as Googling for your specific industry,
Speaker:sales tax software, and there's probably a plethora of softwares.
Speaker:Yeah.
Speaker:This feels like whenever you're trying to learn a card game with somebody who
Speaker:really knows the card game, but you don't, and you're trying to listen to the rules,
Speaker:but your brain is like, I don't want to.
Speaker:And then it's like, but then this happens.
Speaker:That's the government.
Speaker:Yeah, I don't like it.
Speaker:We just want clear cut rules.
Speaker:I'm going to get the government haircut.
Speaker:Yes.
Speaker:I don't like it.
Speaker:No sales taxes, please.
Speaker:None.
Speaker:None.
Speaker:So there are exemptions.
Speaker:for sales taxes for certain things.
Speaker:So like, again, like the clothing in Pennsylvania textbooks, groceries,
Speaker:pharmaceuticals, things like that.
Speaker:Those are exemptions to sales taxes, at least in Pennsylvania.
Speaker:And then also wholesale transactions.
Speaker:So say you're buying something and you're reselling it.
Speaker:If you are reselling it, you shouldn't be paying sales taxes to the person you
Speaker:are, the company you're buying the product from, you should have a certificate of.
Speaker:I am purchasing all of this stuff, and then I am reselling it.
Speaker:So you should have a certificate that's for resale, so that you don't
Speaker:pay sales tax to that person, but you're collecting it from the end user.
Speaker:The end user pays the sales taxes.
Speaker:So That is something to make sure that you note if you're buying a bunch
Speaker:of stuff, if you're buying a lot of clothing and you're reselling it,
Speaker:you should have a resale certificate.
Speaker:So that way you're not being charged and then recharging.
Speaker:It would pass through you and the final user would be charged.
Speaker:You also will get exemptions if you you've nonprofit, churches, certain government
Speaker:entities will get sales tax exclusions.
Speaker:And again, that's just a form that you would fill out.
Speaker:That's typically on the and then you would fill that out for sales tax
Speaker:exemption and then you can turn that into any retailer that you're buying
Speaker:from, anybody that you're buying from, and you will not have sales
Speaker:taxes attached to your receipt if you have a sales tax exemption form.
Speaker:Is this something, all of this is something you researched for your clients?
Speaker:Yes.
Speaker:So that they, I mean.
Speaker:Yeah.
Speaker:Yeah.
Speaker:That's like enough of a reason.
Speaker:Yeah.
Speaker:If we didn't give you 16 other reasons in our other episodes, like.
Speaker:This is just so much.
Speaker:It is.
Speaker:It is.
Speaker:And if you as a seller have someone that comes to you and says, "Oh, I'm, I'm
Speaker:sales tax exempt," ask for their form.
Speaker:because if you don't have that form, like you're liable for the sales taxes given,
Speaker:it might be a very small amount that never comes up in the scheme of things.
Speaker:But say you have a client that you're continually selling to, that's a church
Speaker:or a, a school or another nonprofit and they say their sales tax exempt
Speaker:and then you were to get IRS audited and you've never charged them sales
Speaker:tax and it turns out they don't have the sales tax exemption form.
Speaker:You will have to pay that sales tax.
Speaker:Yeah.
Speaker:So always get the sales tax exemption form.
Speaker:It's not a bad question to ask.
Speaker:They should be able to have it readily available so that they don't
Speaker:pay the sales taxes on the product.
Speaker:So.
Speaker:Make sure you ask that.
Speaker:That's not a bad question.
Speaker:If someone says that, that they are, you can always ask for that form.
Speaker:Okay.
Speaker:Mm hmm.
Speaker:What else do we need to know?
Speaker:I don't like sales taxes either.
Speaker:So those are the businesses that are required to collect
Speaker:sales taxes and pay them.
Speaker:So with that in terms of how you would pay it So you register on
Speaker:my path if you're in Pennsylvania.
Speaker:So you can register on my path is the pennsylvania
Speaker:department of revenue website.
Speaker:It's a very easy registration process.
Speaker:You just say I want to register a new business or new entity
Speaker:and you just follow the prompts.
Speaker:When did you start your business?
Speaker:When did you start collecting sales taxes or, you know, start sales?
Speaker:And they just ask for who the owners are, what the addresses are, and then
Speaker:you get a sales tax license in the mail.
Speaker:You have your sales tax license number.
Speaker:You should put that in a frame and like hang it up because when people come to
Speaker:the your, if it's a physical location, sometimes people come and check that.
Speaker:Like you can have a government body that comes in and asks for
Speaker:your sales tax license number.
Speaker:Again, that's, I've never heard of that happening to one of my
Speaker:clients, but I know that can happen.
Speaker:So I would always have that available to pull out.
Speaker:You as the business owner should have that form.
Speaker:I've had lots of clients that expect me to retain that information for them
Speaker:just because I have access to their MyPath, they'll email me and say, "Hey,
Speaker:can you send me my sales tax license?"
Speaker:I don't have the physical copy.
Speaker:You have the physical copy.
Speaker:I can tell you the number if I have access to your MyPath and I
Speaker:can give you your license number.
Speaker:I can kind of talk you through what the account numbers are.
Speaker:But the actual, like, physical copy that you would need to send
Speaker:to people if they ask for it, the business owner should have that.
Speaker:Okay.
Speaker:Unless you have an agreement with your bookkeeper or tax account that they
Speaker:are retaining it for you but that's not something I do for, I want my
Speaker:clients to retain that information.
Speaker:That makes sense.
Speaker:Mm hmm.
Speaker:So that's how you would get your sales tax license.
Speaker:Then from there, typically you need that number if you're doing like
Speaker:online sales through eBay, Shopify, you need to submit that number so that
Speaker:it can be attached to your business.
Speaker:A lot of the times those websites will not let you operate through
Speaker:them and sell things through them.
Speaker:If you do not have either, if you're a sole proprietor, your
Speaker:social security number in there for them to track it off of that.
Speaker:If you're.
Speaker:A partnership where you're incorporated, your EIN number, and
Speaker:then your sales tax license number, excuse me, attached to that as well.
Speaker:Wow.
Speaker:Mm hmm.
Speaker:I'm just sitting here thinking about how smart you are.
Speaker:Oh gosh, no, it's, it's just through experience.
Speaker:I feel like I just if I have to learn it, I typically retain it after that.
Speaker:But this took lots of research, lots of time.
Speaker:For paying it, you might be assigned a monthly payment schedule,
Speaker:semi annual payment schedule, quarterly payment schedule, yearly
Speaker:payment schedule to remit those.
Speaker:The more sales that you have, the more often you have to remit sales taxes.
Speaker:And in certain cases, if you are making lots of money, the
Speaker:government asks for it in advance.
Speaker:They want sales taxes in advance too.
Speaker:You have to prepay for them.
Speaker:I think it's just so that they are guaranteed their money.
Speaker:Yeah, I don't have any clients that have to do that either, but I, I know that that
Speaker:is a potential in some states as well.
Speaker:Ew.
Speaker:I know.
Speaker:Yeah.
Speaker:And some states don't have any sales taxes at all, like Delaware.
Speaker:Delaware has no sales tax.
Speaker:They were just like, we don't like this.
Speaker:Yep.
Speaker:We're not going to do it.
Speaker:We just agree as a whole.
Speaker:Yep.
Speaker:Why does the government let them do that?
Speaker:So the federal government is not the one that implements the sales taxes.
Speaker:It is state by state.
Speaker:Mm hmm.
Speaker:Yeah.
Speaker:Yeah.
Speaker:It is state by state.
Speaker:But one thing to note, and this is, so if anybody heard of the Wayfair
Speaker:lawsuit a couple years ago, it was because Wayfair was shipping products
Speaker:like all over and the individuals were not claiming the purchases that
Speaker:they made in their individual states on their tax returns because why?
Speaker:No offense to the government again, but like why would people do that or
Speaker:people don't even know to do that?
Speaker:Yeah.
Speaker:So, other thing that goes along with sales tax is use tax, and I'm not
Speaker:going to get too into this because I don't, again, I don't have a
Speaker:lot of clients that have use tax.
Speaker:This would came into play.
Speaker:Use use U S E like use, like you're using something like a use tax.
Speaker:No, it's a good question because it's weird and a lot of people don't talk
Speaker:about it, but say you buy something in another state, you pay the sales
Speaker:tax for it in that state, but if you're taking it and you're using it
Speaker:continually in another state, you're supposed to pay use tax on that product.
Speaker:Like multiple times?
Speaker:Uh, Yearly.
Speaker:Give me a break.
Speaker:Yearly or if it's the same, so you'd have to, it would depend on the product.
Speaker:So for example, the last company that I worked for, we had techs that
Speaker:would go and work on the robots.
Speaker:So the techs would, we bought the kits for the techs in Pennsylvania, paid
Speaker:the sales taxes when we bought it.
Speaker:And then those techs would go to Tennessee or Florida or Ohio to fix the robots.
Speaker:And they have to pay use tax on their tool kits in those states.
Speaker:Give me a break.
Speaker:Uh Huh.
Speaker:This is just very arbitrary and I feel like.
Speaker:Yeah.
Speaker:Yeah.
Speaker:I don't.
Speaker:And think about the magnitude of that too.
Speaker:Like this is where.
Speaker:How many people are not doing it?
Speaker:Right.
Speaker:If you have no idea.
Speaker:And so when you think about it from like a small business owner perspective, it feels
Speaker:so crazy and it feels like so nitpicky.
Speaker:But then think about all of the massive companies out there, like the massive
Speaker:companies that are traveling around.
Speaker:They're repairing things.
Speaker:Like.
Speaker:You know, they have headquarters in one state, but they have all these techs
Speaker:all over, they have all of these like locations all over the country and think
Speaker:about all of the different taxes that they are paying across the board to
Speaker:like use products in different states.
Speaker:How confusing that is.
Speaker:Isn't that crazy?
Speaker:Yeah.
Speaker:So it is, it is like a, I mean, when you get to the large companies,
Speaker:there are entire departments, you know, just for this.
Speaker:Yeah.
Speaker:Mm hmm.
Speaker:It's nuts.
Speaker:I mean, it is, it's a massive, it's a massive thing.
Speaker:So, there are a lot of weird stipulations, there are a lot of weird notes,
Speaker:because there are massive companies where the state governments are
Speaker:collecting very large dollar amounts on their sales and on their products.
Speaker:Yeah.
Speaker:Yeah.
Speaker:So it's, it is like a really like mind blowing thing.
Speaker:I think when you think of the magnitude that comes with some of this stuff.
Speaker:I was just thinking like if this world was like the Hunger Games
Speaker:and we got like assigned jobs.
Speaker:Yeah.
Speaker:I got assigned that job.
Speaker:I would be so mad.
Speaker:I would be so mad.
Speaker:Send me to the Hunger Games right now.
Speaker:Put me in the ring.
Speaker:I volunteer as tribute.
Speaker:I don't want to look at sales tax.
Speaker:Yeah, yeah.
Speaker:And it's like, it's crazy.
Speaker:It's crazy.
Speaker:Cause then like, so at the last company that I was at again, like it's
Speaker:all dependent too, if you're accrual basis or cash basis, which like when
Speaker:the product is actually sold versus when it's actually delivered versus
Speaker:when the work is actually performed.
Speaker:Like, I mean, this like concept can be so big, so we won't, we
Speaker:won't go too much more into it there, but it is, it is crazy.
Speaker:So for us, for us, small business owners, we'll stay in our tiny lane and we'll
Speaker:just keep track of our own stuff and we won't think about the big companies.
Speaker:But it is kind of a crazy thought overall.
Speaker:So you'd remit that on a, like I said, a monthly, quarterly, semi annually,
Speaker:annually basis or more often than that, sometimes there's bi weekly, you know,
Speaker:there's a lot of different ones, and this is in Pennsylvania I'm talking
Speaker:other states might have other deadlines to submit in Pennsylvania it's 6%, and
Speaker:then in Allegheny County it's an extra 1%, so, yeah, Allegheny County is 1%, 7
Speaker:percent sales taxes in Allegheny County.
Speaker:So the second you go into Butler County, that 1 percent goes away.
Speaker:And then Philadelphia is another one that has for Philadelphia count
Speaker:the County out there is another one.
Speaker:I didn't mean to laugh about it.
Speaker:Yeah.
Speaker:It's just like,
Speaker:it's so nitpicky.
Speaker:It's a card game.
Speaker:I don't ever want to play.
Speaker:Yup.
Speaker:It's so nitpicky.
Speaker:It really is.
Speaker:Like sales taxes are weird.
Speaker:If you have not been submitting sales taxes and you should be.
Speaker:Yikes.
Speaker:Get that up to date.
Speaker:I'm just getting that up to date, but make sure that you're charging sales
Speaker:taxes if you should, because if you were ever to be caught for not charging and
Speaker:remitting sales taxes, it comes out of your margins like you will have to pay
Speaker:that and the Pennsylvania Department of Web Revenue website is very savvy now
Speaker:where if you amend your taxes, it'll automatically it you have a balance
Speaker:on that right away So say you amend or you submit and say like oh I owe this
Speaker:it'll be bright red, you owe this money.
Speaker:And if you submit anything else, say you got a return for the next period,
Speaker:it would apply to that existing balance.
Speaker:Like they are very, they'll take their money.
Speaker:Yeah, exactly.
Speaker:Wow.
Speaker:Yeah.
Speaker:So, definitely pay your sales taxes, just pay them and remit them again.
Speaker:I'm someone that hates sales taxes.
Speaker:I think that they're silly, but pay your sales taxes.
Speaker:Stay in the clear.
Speaker:Like they really.
Speaker:They it's a big deal to, you know, make sure that you're paying them
Speaker:and remitting them the correct way.
Speaker:And long story short, like if you are uncertain or you need to
Speaker:consult with somebody, obviously you'd be happy to do that.
Speaker:Yeah, absolutely.
Speaker:We pay sales taxes for our clients.
Speaker:We'll do the calculations.
Speaker:We have a couple retailers that do service based jobs where they sell a product, but
Speaker:then also the big service goes into it.
Speaker:They also have retail shops where it's, you know, just the product.
Speaker:There's not a service attached to it.
Speaker:And then they have kind of a mixture of like teaching and
Speaker:training and other products to.
Speaker:So they have a couple different segments.
Speaker:And they also collect the funds in a different way.
Speaker:They invoice clients through QuickBooks online, but then they also
Speaker:have a Shopify account, so they're collecting payments in multiple ways.
Speaker:And we'll make sure that we take their report from QuickBooks for their
Speaker:invoicing, what that sales tax is.
Speaker:We'll take their reports from Shopify and what that sales tax is.
Speaker:Because if you just take the number that shows up in QuickBooks, that's
Speaker:not always the most accurate number.
Speaker:Or there are some sales that are not sales taxable.
Speaker:So we make sure that we do all those calculations and then remit
Speaker:the sales tax on the right number.
Speaker:So you're not overpaying or underpaying month to month.
Speaker:So we definitely help with that service if anybody has any questions
Speaker:on it or needs any assistance with it.
Speaker:And we remit, like I said, in multiple states for a lot of our clients too.
Speaker:That's awesome.
Speaker:Yeah.
Speaker:Yeah.
Speaker:It takes a little bit of the pressure off.
Speaker:We're just trying to make it a less anxious place.
Speaker:Yeah.
Speaker:Trying to make the world a less anxious place.
Speaker:Want everybody to have their businesses and, and take ownership for their
Speaker:businesses, but also be able to relax.
Speaker:You know, let's get rid of some of that anxiety around it.
Speaker:Mm.
Speaker:Love for it.
Speaker:So, yeah.
Speaker:Yeah.
Speaker:We're, we're, we're doing what we can.
Speaker:Doing what we can.
Speaker:Yeah.
Speaker:So, it's definitely something to be aware of, something to plan for, and one other
Speaker:piece to kind of take it a step further.
Speaker:Whenever you are collecting sales tax as a business owner, it's not
Speaker:considered revenue for your business.
Speaker:So say you sold a product that's ten dollars and just for ease of math,
Speaker:don't check me on the math here for Pennsylvania, but let's say with sales
Speaker:tax that product went to twelve dollars.
Speaker:So it's ten dollars is the product, two dollars is the sales tax.
Speaker:That'll be very high sales tax, but again we're just doing it for math purposes.
Speaker:So that $10 is revenue.
Speaker:And that 2 is actually a payable to the Pennsylvania Department of
Speaker:Revenue that goes on the balance sheet as like accounts payable.
Speaker:You don't want it to be that it shows up as revenue 12
Speaker:because that's not real revenue.
Speaker:And say you were collecting sales taxes and you weren't paying it.
Speaker:Now you're overstating your revenue and you're going to pay
Speaker:business taxes on all of that.
Speaker:But then if you owe, you need to eventually pay the sales taxes.
Speaker:And you haven't taken that number out, you're plugging in a higher revenue
Speaker:number for the money that you owe.
Speaker:So you're paying like twice.
Speaker:Right.
Speaker:Yeah.
Speaker:So you're probably overpaying at that point.
Speaker:If you're saying, if you go into Pennsylvania Department of Revenue and
Speaker:you say, I, you know, and say in your point of sales software, you would set
Speaker:it up where the product is 10, it's calculating sales tax and it's 2 extra.
Speaker:But then you go into Pennsylvania Department of
Speaker:Revenue and you say, I made 12.
Speaker:It's saying that's the revenue where really the revenue was only 10.
Speaker:Right.
Speaker:And so you want to make sure that your accounting software is set up the right
Speaker:way where if you're not putting on as a payable, it's immediately at least a
Speaker:contra revenue, which means that it would show up Sales 12 and negative 2 as like
Speaker:sales tax adjustment like right there The appropriate way is that it's payable.
Speaker:So as soon as you're basically just collecting it for the government and
Speaker:saying, okay I'm collecting 12 from you.
Speaker:The 10 is for me and the 2 I owe to the government so that 2 is going on
Speaker:as a payable because I'm paying the government and then whenever you go to
Speaker:pay it that two dollars comes off the payable comes out of your cash Balance
Speaker:and then you're in the clear So you only have ten dollars in sales and then you no
Speaker:longer have anything on the payable side after you've paid it That makes sense.
Speaker:Yeah.
Speaker:Yeah, so it's It's a little sticky, but it's once you kind of get the hang of
Speaker:it, it's not as daunting as it seems.
Speaker:Once you know your business and your product and you know
Speaker:how to track it, it's simple.
Speaker:You just follow the timeline.
Speaker:You log into my path, you submit.
Speaker:But before then, or when you're adding new products, or when you're
Speaker:adding new states, or when you're, you know, doing a different offering,
Speaker:it can be a little bit daunting.
Speaker:So definitely do the due diligence in the beginning to make sure you have
Speaker:it set up correctly and go from there.
Speaker:All right.
Speaker:Yeah.
Speaker:Absolutely.
Speaker:Another good one.
Speaker:Good stuff.
Speaker:Let us know if you have any questions.
Speaker:We're happy to help and have a great rest of your day.
Speaker:Yeah.
Speaker:All right.
Speaker:Peace out.
Speaker:Bye.
