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November 2015 Archives

Nexus schmexus: Report claims businesses confused about sales tax p3

We are just finishing up our discussion of sales and use taxes, who must pay them and when they are due. Small and mid-sized businesses, that is, businesses that may not have a full-time tax expert on hand, may be more vulnerable to the confusion that seems to be the hallmark of sales and use taxes. One reason is that the business must be fluent in the tax laws of every state it does business in, regardless of the nature of the transaction. That is a lot of ground to cover when you are trying to run a business.

Nexus schmexus: Report claims businesses confused about sales tax p2

If you are a toy store in Minneapolis, you collect a 7.775 percent sales tax on most in-store transactions. The tax does not all go to the state: Minnesota's sales tax is just 6.875 percent. But Hennepin County has a 0.15 percent tax and Minneapolis a 0.5 percent tax. That is all rounded out with the Transit Improvement Tax of 0.25 percent. If you are new to business, you could easily be confused.

Nexus schmexus: Report claims businesses confused about sales tax

A recent study conducted by McGladrey LLP (now RSM LLP) suggests that mid-sized businesses may be confused about the filing and payment requirements for sales and use taxes. While paying too much is a burden on any company's bottom line, there is also the risk of not paying what they owe and, as a result, incurring fines and penalties. The report listed 10 industries that tend to overpay, among them manufacturing, technology, financial services and pharmaceuticals.

Can't pay your back taxes all at once? You have other options, p2

In August we wrote about a friend who spent a little more than a week believing that she owed the Internal Revenue Service about $10,000. With the help of her tax attorney, she was able to clear the matter up. Still, she woke up every morning that week in a cold sweat wondering how on earth she was going to come up with that kind of money.

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