pointofdespo

Tuesday, December 14, 2010

Gotta watch those widget sales

I had a question from a class participant a few days ago, and it was such a good question, I thought I'd use it here. But I promised her I'd sanitize the heck out of it. So think of this as a question "inspired" by the real question.

"My company is an HVAC contractor [in most states, contractor sales aren't taxable - they pay tax on the building materials they use]. We prepare widgets in our shop that will be attached to the HVAC equipment. Since it's part of the construction job, we just cost the materials used for the widgets to the job and pay sales tax on the few hunks of steel that we use.

However, we have a lot of customers who buy the widgets without our doing any actual HVAC work (our widgets are very popular and user installable). When this happens, we just send the widget to the customer, and bill them. We don't charge sales tax. Should we?"

You should be charging tax on the widgets that you sell at retail to your customers. If the widgets become part of the building where you're doing the HVAC work, then you would pay tax on the widget components when purchased.

But when you sell the widgets outside of a construction contract, you are making retail sales of tangible personal property, and those are taxable sales. You should be charging tax.

The problem is that, if you've already paid tax on the components of the widget when you bought them, and then you collect tax on your retail sales of them, then the state is getting too much money. In most states, there are two solutions (and you need to check your state rules to make sure of your options):

Purchases resold - Many states make provision for purchases you make that were taxed, and are subsequently sold at retail where tax is collected. The states usually let you deduct your "purchases resold" from your use tax liability.

Buy for resale - If your retail sales of widgets are substantial, consider giving your vendor a resale certificate for all of the widget components and pay no tax on any of those purchases. Then collect tax on your retail sales and accrue use tax on the materials that become part of your construction contracts.

Either way, there is extra bookkeeping involved. But if the retail sales of the widgets are substantial, you should come up with a solution before the next auditor finds it.

This is another example of a situation where a business was making taxable retail sales without even realizing it. Does anyone else have this problem? You betcha!

And finally, if you are actually manufacturing the widget, you should look into whether or not there are any manufacturing exemptions available to you.

The Sales Tax Guy
http://salestaxguy.blogspot.com

See the disclaimer - this is for education only. Research these issues thoroughly before making decisions. Remember: there are details we haven't discussed, and every state is different. Here's more information

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Tuesday, November 2, 2010

A quick note to state tax departments

Here's a small suggestion to you folks at the revenue department. Every time I read about some business charging their customers tax and not remitting it to the state, it's almost always one of the following businesses:

Used car dealers
Mechanics
Restaurants
Convenience stores

And they're always independently owned. Seems like doing nothing but auditing these guys would clear out your deficits like that (snapping my fingers).

Just a thought.

By the way, if you're one of the aforementioned businesses, and you're feeling all offended now, here's the problem. While I'm miffed about your not paying the taxes the law requires, what really fries my shorts is that you are collecting the taxes from your customers, but not bothering to pay the taxes to the state. You're defrauding not only the state, but your innocent customers. That stinks.

Friday, October 29, 2010

Sales and Use Tax Links

Arizona Krispy Kreme Loses Sales Tax Lawsuit sabrix.com
They tried to get the donuts to be treated as non-taxable sales, just like those sold from a grocery store. Except that they're not a grocery store.

California Ready To Tax "Recreational Marijuana Use sabrix.com
Well, that's one way to help with the budget deficit.

New State Business Tax Climate Index Tax Foundation
South Dakota is the nicest. And the worst? This may come as a surprise, but NY, NJ and CA don't fare so well. I'd retire to SD, but, dang it's cold up there!

Pay No Sales Tax on Solar Power in MA and CT! brightstarsolar.net
It's a sales pitch for solar, and beware of relying on this when making your decisions about solar power, but worth a look if you're considering this.

Medical Device Companies and Sales Tax: What's the Risk? bakertilly.com
This article highlights that it's different in every state and if you sell stuff outside of your state, you need to make sure you know how it's taxed where you're selling it. The article doesn't mention that you only care about the rules in other states if you have nexus, however.

Sales and Use Tax Becomes Increasingly Challenging for Companies [Outsourcing] cpa2biz.com
First of all, skip to the "risk and rewards" section unless you need lots of filler on background. But the list is pretty good. If you're thinking about outsourcing your SUT processing, this list is a very useful tool to find the right vendor. Let me put it this way: the vendors really don't want you to read this.

The Strangest Taxes and Deductions by U.S. State gobankingrates.com
The author lists a several interesting taxes, some of which aren't technically sales and use taxes. And many of them, while sounding silly, are pretty common (like the flour in candy rule). And I love her last line, "This is a pretty exhaustive catalog of taxation oddities, but there are many states we haven't covered." Uh, if there are many states you haven't covered, than it's NOT pretty exhaustive. I hate to be picky, but there you go. Anyway, you'll enjoy some of the odder ones, like the playing card tax in Alabama.

S.C. levies tax on services thesunnews.com
They do it weird in SC In the vast majority of states, when repair labor isn't taxable, service contracts aren't either. And when repair labor is taxable, then the service contracts are taxable. But in SC it's worked out to be just the opposite. Repair labor isn't taxable. But "service maintenance contracts" are taxable. The politicians passed the law to collect taxes that are collected when these contracts are sold by appliance vendors. But the dopey politicians didn't think it through and get the wording right. So now, if you provide a contract service of watering plants, you're providing a taxable service. And it sounds like an over-zealous tax department could extend the interpretation to most service activities, since they all really do involve "service," "maintenance," and "contracts." Foolish politicians. Does anybody think about this stuff? Oh, that's right. They don't.

Voluntary Disclosure or Tax Amnesty? bnatax.com speedtax.com
Two good articles discussing the two different types of programs.

And Amazon deserves their own section this time

Texas hit's 'em wsj.com
You see, they've got this warehouse near Dallas. They've got some corporate entity sheltering going on, but Texas has finally said, "wait a minute."

Texas Sends Amazon a $269 Million Sales Tax Bill dailyfinance.com

Amazon wins one round, but battles continue over taxing online sales seattletimes.nwsource.com
The decision wasn't a complete victory for the Big A. It was more about privacy rights than tax issues.

How North Carolina Overreached in Its Sales Tax Battle With Amazon dailyfinance.com

Wednesday, October 27, 2010

Paperwork. There's no excuse.

As I've been perusing the news, one particular problem, which is eminently solvable, keeps coming up. So let me just say now: make sure you know what the paperwork requirements are, that you fill out the proper forms, and that you do things ON TIME!

Three examples:

Numerous sales and use tax appeals are lost because the businesses who suffered the assessments didn't file the necessary notices on time. Come on! And don't rely on the auditor to tell you what your deadlines are. I've seen at least one situation where the auditor gave incorrect information about the appeals process. When the taxpayer used that as an excuse, the courts basically said, "tough." Independently verify what you need to file and when you need to file it.

Enterprise zones, opportunity zones, etc. give nice sales and use tax exemptions, usually for businesses located in economically distressed areas. But there's paperwork and approvals that you must fill out and file.

And the classic example of paperwork that most of you are failing to get - exemption certificates. Get them. Remember that some states don't have to give you any time to get them when the auditor shows up. And you won't be able to get them from some of your customers when you ask. So get them now!

Thursday, September 2, 2010

The Unexpected WOW!

When was the last time you experienced the unexpected WOW!? I experienced one about a month ago. I was visiting Seattle in my capacity as a Gitomer-Certified Speaker to deliver an inspirational keynote on Customer Loyalty. The event was taking place at the Seattle Riverfront Marriott.

During my AV check the night before, Lezlie from the Seattle Riverfront Marriott staff, greeted me to make sure that all was well. During our short visit together we started talking about local “treasures”. Of course, I was in Seattle, the official home of Starbucks (my favorite service company), but they have other notable treasures as well.

In preparing for my trip, I had come across Top Pot Doughnuts that has 40 different hand-forged doughnuts - YUM! I mentioned the doughnuts to Lezlie, and she told me about how wonderful they are. We talked about her favorite doughnuts and mine (maple-frosted of course!).

We wrapped up our AV check and I headed up to my room to finish prepping for my keynote the following morning.

The next morning, I scoped out the coffee scene. They had a shop that served Starbucks in the hotel but this wasn’t a full-service, smiling green hat barista, order it how you want it, girly whipped beverage Starbucks. The closest “real” Starbucks store was directly across the street. I ordered my speaker preparation mo-jo juice – a double-tall, non-fat, no-whip mocha - and returned to the meeting room at the hotel to get ready to rock my audience’s service socks off!

It was game time and Lezlie arrived in the room. She walked up to the platform and I noticed she was carrying a box. To my utter surprise, she had gone to the Top Pot Store early that morning, hand-selected 6 beautiful donuts - including two different maple-frosted doughnuts. WOW!

I was amazed and blown away by the friendly and kind gesture. It was thoughtful, unexpected and personable - all elements of making a WOW! moment.
How are you WOWing your customers? Are you bringing them doughnuts, or are you bringing them the best doughnuts including their favorites (not yours)!
There are three major components to making a WOW! gesture:

1. Be thoughtful – a major part of a gesture being WOW! is the fact that you took time to think about the person receiving the gesture and making sure it is something that they want or need. No I didn’t need the doughnuts, nor did my hips, but Lezlie knew with my tight travel schedule that I wouldn’t be able to visit the shop myself, so she got them for me!

2. Be unexpected – the best part of a WOW! gesture is the surprise element. I never expected that Lezlie would take the time to walk several city blocks at 6am to get doughnuts for me!

3. Be personable – no doubt the most important component is to be personable. Her gesture wouldn’t have been the same had she gotten me a doughnut from Krispy Kreme or if she wouldn’t have included the maple-frosted, my favorites! I knew that she took the time to listen to me and remember what I would like.

Lezlie’s unexpected, thoughtful, and personable WOW gesture still has me talking and telling as many as possible. She got it right. Are you?
Want to see the Top Pot gift doughnuts from Lezlie? Find them on my Facebook page.

I’m your Double-Tall, Non-Fat, No-Whip Sales Barista. How may I help you help yourself?

Wednesday, June 23, 2010

Read and Renew

Where is your passion?

Is it in your work, your friends, your hobbies, your family?

I re-found my passion in a book. A good friend of mine had been telling me about this book, The Alchemist by Paulo Coelho, for years. I had put off reading it because I thought, "Why in the world would I want to read a story about an alchemist?"

More importantly I thought, "What is an alchemist?"

Then a few Christmas' ago, I received the book as a gift. I was immediately interested -- now there were two people, who knew me well, leading me to open the pages of this mysterious book.

I quickly began on a literary journey that only lasted two days. As I was reading, it was as if each page was speaking to me. It had been a long time since a book had touched my soul in this way. I was mesmerized!

Overall, it was a quick and easy read, but more importantly, it was a read that changed my outlook on my life. You see, at the time, I had become bored with my job. I was lackluster, robotic, and completely unsatisfied with my work.

The Alchemist changed this. When I closed the book, a light switch clicked on. I re-discovered my purpose in life. My passion. My passion of teaching others.

That led me to where I am today… into my role as the Double-Tall, Non-Fat, No-Whip Sales Barista. A job where I wear many hats (designer of course)! I sell, I speak, I share, I write, I train -- all allowing me to teach others along the way.

There was one simple line in the book that specifically re-sparked my love of teaching and confirmed that this is my life's purpose: "Everyone, when they are young, knows what their destiny is."

When I was a little girl, I wanted to be a teacher. Plain and simple. Over the years, I have found that when I am helping another person learn how to do something new, like helping my dad with a computer, cell phone, GPS, or pretty much any new-age electronic, I am fulfilled with joy.

What did you dream to be when you grew up?

Where is your passion? Is it alive in you and the other lives you touch daily? Or is it lackluster, robotic, and unsatisfied?

The Alchemist helped me uncover or simply rediscover my life's purpose. If you are that lackluster, robotic, unsatisfied person I was, I challenge you to remember your dreams and take action!

What actions can you take to rediscover your passion?

1. Think Big – dream of what you wanted to do as a child, when you had no concept of limitations. What was it that you loved to pretend to be or do?

2. Act Big – take action steps to make that dream a reality. Look at ways that your passion appears in your day-to-day life and take action to spend more time doing those things.

3. Change Big – make changes that allow your passion to shine. Did you dream of being a veterinarian as a child? Maybe that isn't feasible now (or maybe it is), but volunteering for your local animal shelter is!

My passion was recently confirmed. After attending one of my Yes! Attitude training workshops, a young man was inspired to take action by my teaching. I see it everyday on his Facebook page and I smile. Passion accomplished!

Email me, subject PASSION! with YOUR best espresso shot tip on how you combine your passion with your work! One lucky person will win their own copy of The Alchemist and have their tip posted on my facebook page!

I'm your Double-Tall, Non-Fat, No-Whip Sales Barista. How may I help you help yourself?

Stephanie Melish, one of the few, hand-selected, Gitomer-Certified Speakers is the ONLY Double-Tall, Non-Fat, No-Whip Sales Barista in the world! Stephanie trains, sells, and speaks to companies and associations all over the country. To book Stephanie for your next event, please visit www.GitomerCertified.com or contact the friendly folks at Buy Gitomer via email or by calling 704-333-1112.

Tuesday, May 25, 2010

Nice to Meat You!

"You should check out The Meat House in Charlotte!" I heard while having dinner with a friend the other evening. The Meat House, Matt explained, is the new neighborhood butcher, and he continued to rave about their meat selections for a few minutes.

Two days later I was walking through their doors.

"WOW! What a cool place." I thought to myself, as I gazed around the entry-way of what I would describe as a Meat Boutique.

I was quickly greeted by Courtney, a smiley young woman eager to help me who asked, "Is this your first time here?"

"Yes!" I replied.

"Would you like for me to show you around?" she asked politely.

"Sure."

We walked through the store as she pointed out each area. Local produce, wine selection, beer, fresh bread from a local bakery, explaining along the way, "We try to give back to the local community as much as possible." Adding value in my mind.

Next, we walk towards the long butcher counter where Courtney starts explaining the different meats they carry and the marinades. She walks towards the counter where one of the butchers hands her a small package. She presents the package to me, "Here is a sample of our burgundy wine marinated steak tips for you to take home and try!" More value added.

At this point, Courtney let me know if I had any questions she would be around, but she would now let me explore the store on my own. As I walked around, I found a few sample stands to try some of their unique fare. Cool.

I ended up buying some steak tips, mushrooms, and potatoes for dinner that night. It made for a DELISH meal. It was nice to know that their product matched the level of service from Courtney.

You may be asking yourself, "What does buying meat have to do with me?" The answer: Everything.

Why did I go to The Meat House? I received a great referral from a friend. Who is referring you?

Why did I buy from them that day? I received great service as soon as I entered their store. How great is your service?

Why will I go back? Plenty of reasons: they gave great service; have a different product that I have not found elsewhere (and that tastes fantastic); they were friendly; they were willing to help me; they support other local businesses; and they gave great service.

Did I mention the service? What reasons are you giving your customers to keep coming back to buy from you?

I'm thrilled about my new discovery and look forward to picking up many dinners from The Meat House. Great service and great products lead to referrals and new business.

I'm your Double-Tall, Non-Fat, No-Whip Sales Barista. How may I help you help yourself?

Stephanie Melish, one of the few, hand-selected, Gitomer-Certified Speakers is the ONLY Double-Tall, Non-Fat, No-Whip Sales Barista in the world! Stephanie trains, sells, and speaks to companies and associations all over the country. To book Stephanie for your next event, please visit www.gitomercertified.com or contact the friendly folks at Buy Gitomer via email or by calling 704-333-1112