Do I need to reg. for Sales Tax or No?

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    • #42640
      Avatarbrandon0409
      Participant

      I am getting my final ducks in a row to present all of my incorporation papers etc. for my new business.

      My question is:

      Since wedding videography is more of a service than a specific product, do I need to register to pay sales tax?

      My mother owns a Real estate appraising company. She has been in business for over 20 years. She says that she is not required to be registered to pay or have to pay sales tax.
      The appraising business works much like the videography business.

      1. You provide the service of appraising the house.
      2. You do the necessary work-up to produce the final product.
      3. She hands them the final appraisal in a packet.

      Even though the customer is receiving a product in hand which is just to show a breakdown of her work, that is not considered a retail product that needs to have sales tax applied.

      Would the videography business work the same way?

      Has anyone else wondered about this?

      Thanks[/list]

    • #178871
      AvatarAnonymous
      Inactive

      This could vary from state to state. My experience when I had a photography business (many years ago) was that I had to get a resellers permit from the state. I also had to charge sales tax, since I was delivering photos to my client. There was a provision where I could avoid charging tax on my services, if I broke down the items in my bill. ($40 for film, $30 for processing, $2 for slide mounts, $200 for photographic services) Then tax only had to be charged for taxable items (everything except my services).

      BTW, for things like film, even though I paid sales tax on it when I bought it from the photo supply store, I also had to charge sales tax on it, since I was altering the film, by putting images on it.

      But check with your state for current rules.

      DISCLAIMER: I am neither a lawyer nor a tax consultant, nor do I play one on TV. πŸ˜€

      Ken Hull

    • #178872
      AvatarAnonymous
      Guest

      In Tennessee, all I have to do is pay sales tax on the tangible media. In my case, the tangible media is the blank CD or DVD. So, I simply pay sales tax when i purchase the media and it’s taken care of. Seems to good to be true but that’s how I’ve been doing it for 7 years.

      I too am not an accountant or lawyer so be sure you get the final answer from professionals in those fields regarding any legal or IRS matters.

      Kris Simmons
      http://www.MindYourVideoBusiness.com

    • #178873
      Avatarfaqvideo
      Participant

      It depends on your location. In the province of Ontario videographers are considered to be manufacturers and have to register to collect provincial sales taxes.

      FAQ Video

    • #178874
      AvatarAnonymous
      Inactive

      compusolver Wrote:

      Brandon,

      This is not a matter for "wondering". Indeed, the question has already been answered by your state. All you need to do is find the answer. Most states have an FAQ section with questions like this, if they have not already explicitedly answered the question within their info pages.

      I recommend you try your state’s tax division’s web page. If that fails, then give your local tax office a call. You don’t want to be sitting across from an auditor three years from now, facing penalties and interest and telling him, "But I get all my tax advice from the VM forums!". X-D

      Hank, I am new to this forum (currently seeking help with Pinnacle Studio Plus version 10.7–the menus don’t work), and I have to say you give some of the most poliet, relevant, and helpful advice I have encountered on ANY of the forums that I frequent on the web!

      Thanks for being a pro!

    • #215397
      AvatarThomas Olsen
      Participant

      A good rule of thumb is this: If it is a physical product then charge sales tax, otherwise it doesn’t apply probably. One thing to keep in mind on pricing: Single you are self-employed you are going to have to pay 15.3% on your SE income because in a W2 situation your employer is paying half those taxes. The hidden cost of hiring an employee.

      Ok the other thing to think about is reporting and paying taxes. You’ll need to be able to quickly look up what amount was paid to you as taxes that you are just going to pass through to the state.

      One more thing is that you should look into maybe doing a schedule C if your income as a business is higher than what you would get paid as an employer for someone else. Here some more information about that. https://zipbooks.com/blog/s-corporations-taxes/

      Last thing: S Corp filings are due March 15th so probably hold off on converting your LLC to an S Corp until next year. If you’re feeling stressed about the April 18th deadline, you can still file for an extension but for next year you can use a free accounting software program to track everything as you do it so that generating an income statement or balance sheet for your CPA won’t be as hard. Here’s a free income statement template if you need one. https://zipbooks.com/free-income-statement-template/

      These templates are pulling numbers to calculate gross profit, expenses, net income but it’s only as good as the information that you put into it. I’d recommend just reconciling your business every month.

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