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merissa
Forum SuperStar!
Joined: Jun 07, 2006
Posts: 4417
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 Posted:
Mon Aug 11, 2008 1:11 pm |
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I have been working on getting my legal business together for the last couple of months. Anyway I am curious how you all handle sales tax. Do you just charge on top of your cake price (like purchasing anything else), or do you just up your cake prices a bit so that it is included in the total? |
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Cakery
Regular Member
Joined: Dec 17, 2006
Posts: 146
Location: Missouri
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Mon Aug 11, 2008 1:19 pm |
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I have a small actual shop front...so my customers come to pick up the cakes. I have a register....so my tax is computed in with my register key. So tax is added on top of the price of the cake. With my state and my business...I collect my tax....then I have to pay and turn the sales tax in every 3 months. The state of Missouri sends out a small payment book with all the info and I just have to fill in my receipt and send in my collected tax then. Mine is set like I said....to send every quarter. |
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merissa
Forum SuperStar!
Joined: Jun 07, 2006
Posts: 4417
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Mon Aug 11, 2008 1:27 pm |
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Yeah, I would expect when I go to a shop that I would get charged sales tax. Since my will be out of my home (licensed separate kitchen though) if for some reason people wouldnt be expecting to pay tax. I just wondered if it would be easier to build the price of tax right into the cake. |
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costumeczar
Forum Addict
Joined: Oct 18, 2007
Posts: 720
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Mon Aug 11, 2008 1:32 pm |
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I work out of my home too, and I charge the sales tax on top of the total price. I think that people expect to pay it regardless, and if you build it into the price of the cake they might think that they're not paying it. |
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brendaonline
Junior Member
Joined: May 09, 2008
Posts: 37
Location: Cleveland, OH USA
Birthday: Aug 09
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Mon Aug 11, 2008 3:51 pm |
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You can use a spreadsheet program to calculate the tax and other charges if you want to, and even sometimes make a printable invoice right in the program. Many financial programs (like Quicken, etc.) also have options to create invoices and calculate tax automatically. |
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jules1719
Regular Member
Joined: Jul 30, 2008
Posts: 127
Location: location location
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Mon Aug 11, 2008 6:38 pm |
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I offer my 2 cents with the best of intentions. I struggled with this very question when I opened my business.
Have you discussed this with your accountant? My accountant verbally smacked me on the back of my head....
Sales tax is the burden of the customer. As a business owner, this is how you need to think.
Whether you charge $100 or $1000 for a cake, think of the price as your share. The customer pays the tax. Period. Why would you charge $100 and pay sales tax out of your share? It's worse for the $1000 cake- now you are out $65. Sell ten of those cakes and you've lost $650.
It's not convenient to include tax in the price- it makes you a dupe.
Everyone expects to pay sales tax and custom cakes are no different.
[dismounts high horse]  |
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littlecake
Forum Fanatic
Joined: Sep 18, 2006
Posts: 1646
Location: the fine line between genuis and insanity
Birthday: Nov 21
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Mon Aug 11, 2008 6:51 pm |
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yeah, just add it on, they don't think a thing about it, people are used to taxes.
BTW that horse cake is very cool...great job!
in some states theres no tax on food....that would rock.... |
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lillicakes
Junior Member
Joined: Jul 03, 2007
Posts: 46
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Mon Aug 11, 2008 9:53 pm |
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| jules1719 wrote: |
Sales tax is the burden of the customer. As a business owner, this is how you need to think. |
Actually, in some states (if not most), the tax is the burden of the business. In Michigan, for example, the deal is that it is a tax that the business must pay, but it is permissible to collect that amount from the customer. This may be more a matter of semantics than anything else, as I agree basically with your result.
In other words, Madame Cake-Businesspersons, you are on the hook for it, so you may as well tag the customer for it.  |
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merissa
Forum SuperStar!
Joined: Jun 07, 2006
Posts: 4417
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Tue Aug 12, 2008 5:03 am |
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okay then I will probably just add it on top of the total then. I am in Mich. actually and no there is no sales tax on food...but that is only food from the grocery store. Prepared food (restaurants etc. there is tax) So I assume cakes would fall under the taxed category. |
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Aliwis000
Frequent Member
Joined: Jan 30, 2007
Posts: 371
Location: Tomball, Texas
Birthday: Jan 11
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Tue Aug 12, 2008 8:14 am |
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What a headache! Sales tax is so sticky. Here in Texas some food is taxed other food is not. Some services are taxed others are not. And customers for some reason forget about it a lot. We quote a job for 250.00 plus tax Then they come and pay and the bill is 270.63, dont get mad at me the government wants there share.
Alicia
PS GOOD LUCK!!! Keep us posted how it is going, you will do amazing! |
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SweetConfectionsChef
Forum Addict
Joined: Jul 21, 2006
Posts: 986
Location: Texas
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Tue Aug 12, 2008 9:32 am |
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| merissa wrote: | | okay then I will probably just add it on top of the total then. I am in Mich. actually and no there is no sales tax on food...but that is only food from the grocery store. Prepared food (restaurants etc. there is tax) So I assume cakes would fall under the taxed category. |
Honestly, I wouldn't assume anything...call your comptroller they can tell you how to handle this according to state regulations. You have to file the necessary paperwork to get the Tax ID # anyway and they usually have a packet to explain what you need to know. |
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merissa
Forum SuperStar!
Joined: Jun 07, 2006
Posts: 4417
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Tue Aug 12, 2008 9:36 am |
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Yeah, I am not exactly down to the details yet, just kind of wondering how others handled it. I have just filed my LLC paperwork and I am waiting for that to all come back. Then I can file for fed tax ID then the state after that. |
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lillicakes
Junior Member
Joined: Jul 03, 2007
Posts: 46
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Tue Aug 12, 2008 1:42 pm |
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merissa
Forum SuperStar!
Joined: Jun 07, 2006
Posts: 4417
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Tue Aug 12, 2008 4:16 pm |
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hmmm! good to have. Definitely confusing. Thanks! |
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lovinkakes
Regular Member
Joined: May 16, 2007
Posts: 103
Location: Englewood, CO
Birthday: May 06
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Thu Aug 14, 2008 1:06 pm |
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Taxes. Ah yes. For deliveries, I have to charge the tax for that city or county if it's self-collecting.
So every time I deliver to a town, I record information from their sales tax office so I don't have to call them again.
It is illegal in my state to include the tax in the price.
Orders that are picked up just have the tax for my town.
Food isn't taxed for the city if it is delivered to a home. It is taxed if it's delivered to a business or a venue (i.e. the wedding venue).
Fun, huh? And that's not all.... |
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