State Sales Tax? B2C/B2B Penalty…Watch Out!



hi there everyone its literary here your tax advisor accountant I specialize in e-commerce in retail industry and welcome welcome again to another episode I have recorded out recently a series of I call it um many you know episodes and solo episodes because I do presumably you might not familiar with me but I have been doing a podcast for the past two years and I do have a YouTube channel channel if that's where you watching me from and and one of the things I've done is I have interviewed many experts but I decided to go back and do a little bit the soul episode because the certain things that I get like I said whether you know inquiries or people asking me the same question over and over and I thought what better than just you know create a small you know video and hopefully talk about that which is nothing a lot easier instead of doing blogs in I don't know I'm not too much into writing as my nature is numbers and taxes but anyhow a lot of talk today is gonna be about in exists this is a serious episode one of them I already talked about if you haven't seen him by the way it's about which states have no sales tax that's right no sales tax another one I also record about professional services being tax insurance states yeah so that means it's not about you selling a product online it's about you selling a professional service and you can get tax rate and something they need to look into that episode but this episode is gonna be about old boy penalties and interest and what happens when you do not follow your sales tax folks it is a nightmare so here goes a few a few things they don't want to kind of bring up to your attention number one even for whatever reason you not sure that how much you owe in taxes because unfortunately you haven't kept track whether it is through you know an accounting software like QuickBooks or an excel sheet whatever it is are you using to calculate in keep track of the expense in your income then at least file an extension okay a lot of time not intention zero five zero just found zero okay and as soon as you have that number in when I mean is don't don't think because you files arrow that means you have a year now to file that return no that means Elise it allows you to give you at least a couple more days and almost tell this to people no matter what you know finally you do you want to go ahead and amend and rectify that as soon as possible the longer you wait the situation can get worse right so even if you're not sure about something Paul Zira really just about zero but do it especially if you know month to month sales tax reporting okay some people quarterly some people are you know annually all right but make sure that you do not know the mouth or if you do you can say you have an estimate and you say well you know what I know I sold you know five thousand dollars worth of you know a service or products this is this month let me go ahead and paint that sales tax you know for example if you're in Florida it's almost seven percent just the state tax so in that case you will pay that seven percent against that amount and even if it's not precisely because you do have you get a litter allowance little discount name which is not major but it's like listen I think two or three percent PA and then if if it's last thing you take the credit for the next finally you know if it's morning you cut no Chuck you make another Lee trying payment to to Department of Revenue right but make sure that that's is the first thing I'm really willing to me it's extremely hard because I see so many people that when do they do not thought because they scratch their heads and like please I didn't know how much I was supposed to pay you know I started my business or perhaps you know I took over someone else's business lose a family business or I just acquired this business whatever might be the situation by all means like I said do an estimate you know look at the numbers you know in say okay especially your home state especially that in look at it because like I said if you're selling products in your homestead you must collect tax you have to collect yourself sacks okay in in watch out because one of the other episodes are talk about professional services there's some specific industries they're just service and they are being also imposed to sales tax okay so remember if your customers don't pay you a sales tax you need to pay and here's a problem when I say file even with zero balance but filed before the deadline okay and I mean the reason why I'm saying that is because if not you will be assessed it penalty a late penalty for just not finally so what you might think I don't know how much it is you know I I don't know how to do an estimation you know I never done this before whatever might be the situation go ahead and file before the deadline at least put zero and you can always go back and men and pay the difference or maybe not pay anything again it depends I mean if you owe money in sales tax real estate right could do that because if not these are the consequences that I'm gonna explain number one biggest start charging you 5% 5% come on up to twenty five percent so think about the first five months okay you already got twenty five percent okay in here's the problem with that you know in in in in I'm sorry let me go back the five percent it's really a penalty for money that you owe okay so if you knew you had a tax liability even though you didn't have precision you still have to pay it because if you're not they can impose a penalty for that money that you did not Hey in the reason behind that is because sales tax is what is called a trusted fun what is a trusted fun for legal terminology is like a payroll right they don't want you to mess around with payroll taxes right because you deduct it from your employee the Social Security care and you must paid it out as you earn the money you must pay taxes and you must of it to the government okay that's the same things with so sex a lot of people don't realize that they think all work that's what Internal Revenue that's not social truth does not mitigate no because it's the state okay the state wants their money and if you're not willing to pay them on time when there's a deadline for a reason their deadline imagine if there would be no deadline so unfortunately because we do have the amount for some of you might see it that way then you want to make sure that if you owe money remember you're gonna get penalized 5% per month so to avoid that please go ahead and you know pay an estimated and then men you know did return later on now I'm going back and I want to rectify this what happens is a late fee it's different leafy it's something that they would want you if you don't file 90 to 0 cell I don't care I wasn't sure Liz I have no clue I have some bad news on that you know why because what happens is when the city feels like you ignore them it's like the government like the feds they're like oh really well guess what I'm gonna charge your late penalty and that happens with a regular tax return or 1040 is the same thing right we have those six months extension well I guess one in the state if you do not file before the deadline even if you just put zero just by doing that you avoid what's called a penalty which could be anything from a hundred dollars minimum up to a hundred percent of your liability think about that for a moment so if you don't follow they could come back in a lot of them they have like a $50 great cheer like it happens in the state of Florida if you don't file I remind you boom they hit you with the $50 so if your monthly father you're accumulating $50 in penalty every single month and now before they used to be a lot more lenient about you know kind of wavy well now they don't want to at all that's it okay so again please remember what I'm saying to you I'm trying to help you where hopefully you can avoid not wasting your money goodness you know in in in in now what you can grow your business because you know I sell online and you know through my professional services you know right now I don't have issues of selling sales tax but let me see the service fees that I even need to be careful that they will charge me sales tax if I send an invoice without that I can get in trouble okay even as in the county industry okay so again if you selling whatever it is make sure that you have at least you send zero return or at least you do an estimated tax payment okay remember always before the deadline so anyhow I hope does this help a little bit I think I wouldn't live alone and expect it but I really want to emphasize the importance be telling it because I just it really bothers me what I see you know possibly client special coming to me and say well my last accountant like you know my eyes you know bookkeeper or you know my spouse or whoever was taking care of that kind of thing I didn't do it and now the week is almost like open a can of worms because they may you have to go back to the state and say oh I've been a business for you know a few months a few years and mmm I haven't collected so sexy so anyhow to avoid that we're here for you you know my team of myself and if you need any help especially when it comes to you you know doing a you know an analysis in a check up what we call from neck this exposure whether you have you know now any physical you know exposure meaning that you have you know location restore but even if you're selling which is really what I call economical presence which is the new thing with the court they came out a few months ago and Wayfarer lost the case right against the Tax Court because they decided hey you know what I don't care you don't have physical presence here you're still selling so we're gonna attach it for that so please be careful again knowledge is power and if you need anyone to give you a good check out and find out where you have exposure we're here to help you we can do that and we can set you up with you know online software to do that with yours or whatever is that but do the smart thing about you know avoiding him to wish your mind money really in penalties and interest which I'm sure to go back into your business and and you know invest into something the better so anyhow let's hurry again here and like I said this bunch of episodes and things that you can watch and listen about e-commerce I have actually interview great people and gas also talking about this topic and things that could help you also grow and market your business online through some of my expert guests that I have interview in the past only has been a pleasure and again welcome if this is you you know first time here with me and I say like share and subscribe and you can contact us through the website or any other social media accounts that I have thank you so much and until next time and I said reach out if you need something and we're here for you thank you so much goodbye bye-bye

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