Sales Tax?

[shootermcgavin]

For the record MLeek, I do have a tax ID number and have been paying all the taxes so far. I go thru a CPA for income tax and deductions and such, but have been doing sales tax on my own since 2004. I was just wondering if I didnt have to be paying on the sales tax.

Sounds like crap if we do in fact need to pay on the service. I also work part time as a server. Why do I not have to pay sales tax on my tip income? Im doing a service / work, and not selling anything. If I was a server that made and sold the food, would I have to pay sales tax on it all? Hmmm has me thinking. Why not charge $300 for a wedding and ask for a $1500 tip?

SHHHHH! Don't give them any ideas!!! Tips aren't considered paying for a service or a good... but I am sure they could justify it as that somehow if they wanted to. As for now, you are SUPPOSED to report it and pay income tax out the wazoo on it... Cuz the good men and women of the government know that those of us who have to wait tables or tend bar are just rolling in the dough and can afford to give some more to them.

As for the $300 and $1500 tip here's my way around it or what I was told to do...
When you are itemizing your contract for the wedding it is not a package deal, it's each a separate line item.
Wedding photography service $1400
Album $100.
Sales tax 7.5% on $100=$7.50

Unfortunately for us in WI service gets taxes so it's all the same, ours is a little lower I think around 5.5 in our county but still album, photo, service, all the same. Working in the food service was one of my favorite jobs ever, time seemed to go by quick, if you stayed clear of the $itchy waitresses the night was pretty enjoyable. If I were you I'd keep doing it part time for as long as possible, I would do it myself but have got too used to working my own hours and I don't think anyone would let me come and go as I please.

 

[wxnut]

That is the nice thing about serving and being a photographer. I usually can book a shoot past one week and ask off that day from serving. Weddings are booked months in advance so I just ask off those days.

 

[bentcountershaft]

I'm wondering if you're misunderstanding sales tax. When you say you were surprised you didn't have to pay sales tax on your tip income, that just doesn't make any sense. You, as a seller don't pay any sales tax on anything you sell. You collect it and turn it over and that's it. Unless you haven't collected it from the customer separately then you should be paying nothing out of your profit for sales tax.

As far as taxing service fees, the reason it was done in my state is due to the car dealerships. In a ploy to undercut each other, they would knock the selling price of the vehicle down a few thousand and then have a "service charge" of a few thousand that wasn't taxable, thus making the total amount the customer paid a little bit less. To close the loop hole the state just taxed it all the same. Labor is the only thing that isn't subject to sales tax here. Yet.