Question Sales Tax

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steponme

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Hi I have 2 ? 's

1st off im in Ill sales tax here is 6.75 On a frame job. Do you add sales tax? Standard Frame Job frame mat glass labor.

What price range is everyone at for a Refit on a 16x20.
Just the refit charge. Thanks so much for the help.
My Boss and I are just intrested in what everyone else is doing.

Have a wonderful day, but please dont steponme.:faintthud:
 
Refit?

does that mean you clean glass check for flecks paper back and use same or new hardware? 24.12 metal 37.42 wood. This is to open up clean & refit.
Here any item sold is taxed at the city & borough rate.
 
You really should check with an accountant in your area, since sales tax laws can vary depending on where you are. Here in VA, you would definitely "collect" sales tax on materials you are selling. You would also collect sales tax on jobs that are primarily labor unless you normally break down materials and labor in your framing jobs. I collect tax on pretty much everything I do.
 
Same as Rob, we have 6% sales tax for material sales only, not for labor. Funny we are primarily a "Blue" State and we have much lower sales tax than Rob who is definitely in a "Red" state....go figure

16x20 refit around $20.
 
Each state is different, but in Indiana and Michigan finished frames are considered manufactured value-added goods and you have to charge sales tax on the entire product.

Kind of like a car... you pay sales tax on the entire price of the car, not just the raw materials.

When I do restoration work or refit I tax exempt the labor and charge a nominal amount for materials which is then taxed.
 
Do you not have a vendor's license, and therefore a sales tax account with your state? I advise you to find a good accountant before you do anything else.
:help: Rick
 
Dave said:
Each state is different, but in Indiana and Michigan finished frames are considered manufactured value-added goods and you have to charge sales tax on the entire product.

Kind of like a car... you pay sales tax on the entire price of the car, not just the raw materials.

When I do restoration work or refit I tax exempt the labor and charge a nominal amount for materials which is then taxed.
Click to expand...

I am also in Indiana. We are not a frame shop but rather a photography studio. We charge the 7% sales tax on just about everything. The one exception is our session fee. For example If you come in for a portrait session and the session fee is $100 dollars for a family of 10 and you spend $400 on a portrait package the tax would be charged only on the $400. The $100 is just for the labor of the session so their is no tax. If you sold me a frame for $100 and their was a $50 framers fee for framing my item would this be different?
I never thought much about it.
 
Steve Collins said:
Ouch!!! So much for Massachusetts being "Taxachusetts"!
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Well, sadly, we beat you. 9.75% in most counties in Northern California.
My residence city just voted in 10.25%

Insanity.

We have to pay 90% of the previous month's sales tax each month until the end of the quarter, when we have a ctach up payment. Yesterday I paid 100% for last month because I don't want to be caught short at the end of January for the usually busy last quarter.

If you are new in business, I suggest saving ahead for sales tax. Not paying your sales tax on time will put you out of business more quickly than just about anything else. Put the tax away at the end of each week or each day and you won't be in trouble at the end of each quarter.

Our state taxes everything, including any labor involved in the manufacture of goods for sale.
 
WBZ said:
...If you sold me a frame for $100 and their was a $50 framers fee for framing my item would this be different?
...
Click to expand...

Not sure what the distinction would be.

Much of the cost associated with a frame job is often the time spent at the counter designing or, in the case of commercial work, going out to the customers location, submitting quotes, etc. If that cost is broken out as a design/quote fee would it be tax exempt?

I suppose the difference could be if the "design/quote fee" is charged whether or not you procure the work. If it is not, then it would be taxable and considered part and parcel of the manufactured good(s).

Correct me if I am wrong, but in the case of your photo studio, you are charging $100 for the sitting and proofs and then the $400 is for a print package Does the customer retain the proofs? If so, I would think the sitting charge would be taxable. If the customer does not retain the proofs, then I would think the $100 would be exempt, but theoretically you should be paying a use tax on the materials to produce the proofs.

It does get complicated sometimes, but when in doubt a call to the Department of Revenue is in order. If you guess wrong and don't collect the tax, then an audit down the line could result in a large tax bill.
 
Dave said:
Each state is different, but in Indiana and Michigan finished frames are considered manufactured value-added goods and you have to charge sales tax on the entire product.

Kind of like a car... you pay sales tax on the entire price of the car, not just the raw materials.

When I do restoration work or refit I tax exempt the labor and charge a nominal amount for materials which is then taxed.
Click to expand...

Same here; tax on the full frame job. It makes sense to me. If you buy furniture, or whatever, you don't get a break in labor charges and materials. You pay for the finished product.
 
Dave said:
Each state is different, but in Indiana and Michigan finished frames are considered manufactured value-added goods and you have to charge sales tax on the entire product.

Kind of like a car... you pay sales tax on the entire price of the car, not just the raw materials.

When I do restoration work or refit I tax exempt the labor and charge a nominal amount for materials which is then taxed.
Click to expand...

We used to have our POS software set to only charge tax for materials and not labor, but were advised by our accountant to charge tax for everything - as we are selling a finished product.

If it was a labor ONLY repair, it would be different.

This is how we have been doing it for some time, now.

Mike
 
Here is a tip for you folks in Michigan. The area that you consider manufacturing in your shop, you can get an exemption on the sales tax on your energy bill. Where I am at, that is the consumers bill. So about 65% of my bill is tax free. I got that info from a sales tax seminar put on by the state. Consumers power sent the form for me to fill out.
 
Kirstie: Good advise about setting sales tax aside.

What seems most insane to me is that despite the high tax rates, California is still in such trouble. Insanity is right.
 
simplymatted said:
Here is a tip for you folks in Michigan. The area that you consider manufacturing in your shop, you can get an exemption on the sales tax on your energy bill.
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Regardless of what state you are in you would do well to see if such a program is available. In Vermont, ALL energy (electricity, heating oil, propane, natural gas, pellets, whatever) that is used in a manufacturing process or an area where manufacturing is done is exempt from sales tax. Further, all purchases of EQUIPMENT used for manufacturing is exempt from sales tax.

Caveat: make sure you know what your state allows under the definition of "manufacturing" or you may find yourself in for a big back tax bill, possibly penalties and interest as well...
 
Steve Collins said:
Kirstie: Good advise about setting sales tax aside.

What seems most insane to me is that despite the high tax rates, California is still in such trouble. Insanity is right.
Click to expand...

I did a couple of things to smooth out the sales tax payments for me. The first thing I did was ask the tax board if I could pay monthly, rather than quarterly. They were a bit surprised by the request, but I found it easier to pay monthly. The second thing I did was set up a business savings account, and I would regularly transfer payments from customers into that account to cover the sales tax liability for the month. When it came time to pay sales tax at the end of the month, there was usually 90% of it already in the savings account.
 
Kirstie said:
If you are new in business, I suggest saving ahead for sales tax. Not paying your sales tax on time will put you out of business more quickly than just about anything else. Put the tax away at the end of each week or each day and you won't be in trouble at the end of each quarter.
Click to expand...


That's for sure.
IRS just filed federal charges here against the owner of a pizza joint. One charge for failing to pay the taxes and a second federal charge of robbery. (The second charge is because by not paying the taxes that he collected, he thus "stole" the money from the government)
 
PaulSF said:
The first thing I did was ask the tax board if I could pay monthly, rather than quarterly. They were a bit surprised by the request, but I found it easier to pay monthly.
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I'm a bit surprised they accepted your request. It costs them the same to process a return whether it's for $5, $5,000 or $500,000. It's been my experience that the filing frequency is dependent on either the gross sales or taxable sales. We pay yearly in several states where we do very little business, quarterly where we do more and monthly where we do a lot (all at the state's request).
 
I just got a letter in the mail from the state telling me that starting next year we'll be required to pay monthly. Has been quarterly. They claim it's because we're collecting more than some magic amount.

Whatever.
 
Dave said:
Not sure what the distinction would be.

Much of the cost associated with a frame job is often the time spent at the counter designing or, in the case of commercial work, going out to the customers location, submitting quotes, etc. If that cost is broken out as a design/quote fee would it be tax exempt?

I suppose the difference could be if the "design/quote fee" is charged whether or not you procure the work. If it is not, then it would be taxable and considered part and parcel of the manufactured good(s).

Correct me if I am wrong, but in the case of your photo studio, you are charging $100 for the sitting and proofs and then the $400 is for a print package Does the customer retain the proofs? If so, I would think the sitting charge would be taxable. If the customer does not retain the proofs, then I would think the $100 would be exempt, but theoretically you should be paying a use tax on the materials to produce the proofs.

It does get complicated sometimes, but when in doubt a call to the Department of Revenue is in order. If you guess wrong and don't collect the tax, then an audit down the line could result in a large tax bill.
Click to expand...

Actually much of our proofing is now online or projection sales. High school seniors still get a preview book but it is studio property and must be returned for the order process. Therefore they actually don't get anything tangible so we don't charge tax. I have actually asked the DOR about this. Nothing is simple that is for sure.

I have a friend who's Father in law was in the dry-cleaning business for years. As I recall he never had a RRMS because he didn't actually sell anything in his store.
 
RRMS = Registered Retail Merchant Certificate for curious minds.
 
Dave said:
RRMS = Registered Retail Merchant Certificate for curious minds.
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Its like we have our own code:p Did you know the DOR now has a website listing those Whose certificates were not renewed due to being delinquent on their sales tax?
 
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