In New Mexico you owe the tax on the full amount charged regardless of expenses or credit card fees
They just changed the Gross Receipt Tax to being based on the location of the service.
There are 21 different tax rates for my county alone.
So you have to look up the tax rate of the address of the piano before you get there so you can charge them the right amount of tax for their address.
I think they changed to a location based tax because of Amazon not paying as much as the local stores.
We are one of the poorest states and I guess they really need the money so while I gripe about it I do understand.
I have a few clients who have outhouses. And one this week had an outhouse and didn't have electricity.
But having to pay tax on services is a pain.
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Gannon Rhinehart
Santa Fe NM
505-692-8385
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Original Message:
Sent: 09-13-2021 00:50
From: David Stocker
Subject: Collecting Sales Tax
State laws vary about whether or not you can charge a "Convenience Fee" for taking payment by credit card.
However, every credit card agreement you entered into has a clause about not charging extra. If the catch you, they could cancel your ability to take cards. I don't thing they have many people looking for piano tuners charging extra.
I decided it was ok for me to charge a convenience fee when I had to pay a convenience fee to the State of Washington for using a credit card in order to give them the sales taxes I had collected.
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David Stocker, RPT
PNWRVP
Olympia WA
Original Message:
Sent: 09-12-2021 12:41
From: Roger Gable
Subject: Collecting Sales Tax
Scott,
First, I believe David Love is correct. If you collect a certain amount of sales tax money at the time of the transaction you must pay that amount to the state. Conversely, I believe your understanding is incorrect about not charging extra for credit card transactions. I believe a few years ago, congress passed a law that allowed merchants to charge extra for credit card transactions.
Roger
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Roger Gable
Gable Piano
Everett WA
425-252-5000
Original Message:
Sent: 09-12-2021 12:33
From: Scott Kerns
Subject: Collecting Sales Tax
Thanks for help everybody! So, if I'm understanding correctly, it's okay to give a discount for cash or a check, but not charge extra for a credit card, PayPal, Venmo, etc... I am also checking with my accountant but you all have been very helpful. I'm looking to the future and thinking about taking more electronic payments so I'd like to figure this out.
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"That Tuning Guy"
Scott Kerns
www.thattuningguy.com
PianoMeter, TuneLab & OnlyPure user
Original Message:
Sent: 09-12-2021 00:43
From: Geoff Sykes
Subject: Collecting Sales Tax
> I mostly take checks or cash so that's not a problem, but with the electronic payments I'm not sure what to do with the fee they collect.
"They" are responsible for the taxes on the fees they collect since that is "their" income. You are only responsible for the taxes on the money you collect. If you bill $100 and they take $4, your actual taxable gross income is only $96. That $4 loss you then get to write off as a business expense.
If you would like to use PayPal and have the customer cover the fees, (which, since it's not a credit card is legal), attached to this post is a handy little Excel PayPal reverse fee calculator I developed. You plug in what you want to take home in the "To get" cell and the "Amount billed" cell will calculate how much you need to charge the customer in order for you to actually take home that amount after PayPal fees. I've never had a customer be anything but sympathetic and agree to cover those fees. The math is accurate as of PayPal fee schedules checked today, 9/11/21.
Interesting tidbit on credit card fees. Legally you are not allowed to increase your charges to compensate for charges imposed on you for taking, specifically, a credit card. The way the law is written, however, makes it a case of pure semantics. Using gasoline as an example, the gas station can't say the price is more if you pay by credit card. However, it CAN say the price is less if you pay with cash. In other words, "regular price" vs "cash price". Semantics, but true.
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Geoff Sykes, RPT
Los Angeles CA
Original Message:
Sent: 09-11-2021 16:02
From: Scott Kerns
Subject: Collecting Sales Tax
In my state, Nebraska, we have to collect sales tax on our services. Are there other states that do the same thing? I ask because I'm trying to figure out how to report the sales tax I collect when I take an electronic payment like Venmo or PayPal. Maybe others here have experience with that and I'm having trouble finding that information online.
I mostly take checks or cash so that's not a problem, but with the electronic payments I'm not sure what to do with the fee they collect. For instance: If my tuning fee is $100 I collect $6.76 in sales tax (7.25% here), that's easy enough. But, if my tuning fee is $100 and the fee from the credit company is 1.9%, they get $1.86 and the actual fee I get is $98.14. Is it okay to calculate the sales tax based on $98.14? Hope this is making sense.
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"That Tuning Guy"
Scott Kerns
www.thattuningguy.com
PianoMeter, TuneLab & OnlyPure user
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