The Most Common Sales Tax Problems & How to Avoid Them

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Presentation

• This presentation is designed to help you avoid some of the most common sales tax problems

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1) Adherence to the rules and requirements

• As your revenue increases, so do your tax responsibilities.

• It’s important for business owners to pay their state sales tax.

• Adherence to the rules and requirements ensures that everything runs smoothly.

• Slip up and you may find yourself in trouble.

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2) 8 Common Sales Tax Problems

• Here are 8 common sales tax problems you should try to avoid at all costs

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3) Failing to Collect Sales Tax

• For some reason, businesses sometimes overlook the need to collect sales tax.

• There is no excuse for this.

• If you sell a tangible product, you need to collect sales tax.

• Failure to do so means you will lose money.

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4) Inadvertent Misuse of Sales Tax Money

• There is absolutely no excuse for misusing sales tax money.

• But this still happens on a regular basis.

• Small businesses don’t always manage bank accounts properly.

• Funds often become co-mingled.

• This means business revenue, personal money, and taxes are all sloshing around in one big bucket.

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• When this is the case

• Tax money will be spent on payment of bills – personal or business.

• Your state’s authority does not look fondly on this and will enact harsh penalties.

• To avoid this situation...

• It’s best to keep separate accounts for different types of funds.

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5) Intentional Misuse of Sales Tax Money

• The worst offense is intentionally misusing sales tax money.

• This happens when a business owner finds himself in trouble and “borrows” the sales tax money to pay off some other expense.

• In most cases, the owner never recovers the money and cash flow problems only become worse.

• No excuse is acceptable to your state’s tax authority in this situation.

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6) Doing Nothing

• Your state’s does not look favourably on inadvertent misuse of sales tax money.

• It’s always best to pay part of what is owed, rather than avoiding

the sum altogether.

• Business owners should pay what they can afford and come to an agreement for the remaining balance.

• Often, your state’s tax authority will work with the business owner to setup a repayment plan.

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7) Miscalculations

• Business owners should have a basic understanding of finance and accounting

• Errors can easily occur when dealing with sales tax.

• One solution is to run numbers twice using two different tools or methods.

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8) Failing to File on Time

• Business owner forgets to file the tax form on time

• Late tax forms can be costly.

• Business owners should keep a calendar to remind them of all deadlines.

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9) Non-profit Exemptions

• One common misconception is that all non-profits are exempt from paying sales tax.

• While this may be true, it is not always true.

• Non-profit status does exempt the non-profit from federal income taxes.

• But some states still require sales tax.

• Business owners should check state laws and regulations to ensure

they are following the rules.

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10) Online Businesses

• Online businesses are subject to different rules and regulations.

• This can leave owners confused and misguided.

• One common mistake is believing sales tax is not required for an online business.

• In the state where the business has a physical presence, it is required that the business charge and pay sales tax.

• It’s best to check specific rules and regulations regarding this law.

• Rules and regulations do change from time to time.

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Example: Sales Tax Word Problems

• If you are looking for answers on how to solve sales tax problems.

• Sometimes it is wise to simply practice by looking at example situations.

• Here are some sales tax word problems to get acquainted with the methods.

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Your local dealership is selling a pickup truck for $18,995. The sales tax is 7%. What is the total price and what portion of that is sales tax?

• The total price is $20,324.65. The sales tax is $1,329.65.

John purchased two pairs of blue jeans for $29 dollars each and one shirt for $12. The sales tax is 6.5%. How much did John owe and what portion is the business required to set aside for sales tax?

• The total price paid was $74.55. The Sales tax was $4.55.

• Maintain the integrity and reputation of your business with your state’s tax authority by using these 8 tips on how to avoid or solve sales tax problems.

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Contact Long Island Tax Resolution Services

• We can help with resolving current sales tax problems issues so that your company can move forward freely.

• Visit@ http://goo.gl/BvIcP7

• Call us at: 631-244-1650

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