I just started working at a glass and mirror business in California. They make and install windows, make table tops, put in shower enclosures, store fronts, etc. They’ve been in business for about 2 years and haven’t been charging sales tax on anything. I don’t know if they plan to write a big check when the time rolls around or what. Someone said that I can get into trouble myself because I know that sales tax on certain things should be charged and aren’t doing it. Is that true?
[caveat]IANAL or CPA.
I’m not familiar with CA sales tax law, but here in Texas, you would need to charge sales tax on the physical objects, i.e., the window, the shower enclosure, etc., but not on the installation charges.
Do they have a sales tax exemption? Some businesses that will be charging sales tax on an item when the resell are exempt from paying it when the initially acquire said item. If they don’t, but would be eligible, they may have decided that, since they paid tax when they got the item, they don’t need to collect it. That sounds unwise to me, but I really don’t know.
If they should be paying sales tax and have not been, after two years they are very delinquent. Here, sales tax payment schedules are based on volume. The most relaxed payment schedule (for the lowest volume) is quarterly.
I don’t think an employee would be liable, but once again, IANAL.
And now it occurs to me to ask: do you know if they’re paying their payroll taxes?
**Payroll taxes? ** That sounds important.
They don’t pay tax on an item they purchase because they have a Resale License. Which is why they need to charge sales tax to the end user when they make a sale. They say they are confused about what type of things should be taxed. But, they change a lot of their figures around before it gets put into the computer so, maybe they know what they’re doing and just prefer I don’t know what they’re doing. Which is cool except, when a customer asks me why they weren’t charged sales tax, I feel really :rolleyes: stoooopid attempting to come up with a logical explanation.
My understanding of California sales tax is, if you sell a product you must charge the buyer sales tax. The seller has to pay the sales tax that is collected to the state quarterly unless gross sales are under some fixed amount(I can’t remember what the amount is).
Most states exempt certain items like food and water from sales tax - though I doubt glass windows and such would have any such exemption.
I have worked for a glass and mirror shop here in Atlanta and I did the priceing. We only charged tax on materials and not on labour. The final price per peice had the tax already worked in on the invoice. (sq.ft.xprice per ft.+tax+labour+trip charge=total)
When your customers ask just tell them that the tax is included in the price.
According to the Board of Equalization website, it seems, for California anyways, the product, labor and tax is to be seperated on the invoice so that the consumer knows what exactly the charges for each.
I know stores can have a no sales tax day for customers, but I’m pretty sure they can’t refuse to pay it to the state/fed.
As said pretty well, labor isn’t taxable. Only materials. I don’t charge my clients sales tax for materials cause I already paid the tax myself. I just say materials are $50.00
>> I know stores can have a no sales tax day for customers
Not really. What they can do is give you a discount which results in a final bill equeal to no sales tax, but the tax is there and has to be paid. Only the State can relieve that obligation.