Lois Ruben Aronow on fri 13 apr 07
I don't know if NY has similar laws (and I am licensed to collect sales tax
in a whole bunch of states, as many of us are). I remind people that I
don't CHARGE sales tax - I only COLLECT it.
And when you are adding up your receipts from a show - be sure NOT to
include the sales tax collected into your profits. Do this, and it may make
it look like you made and extra 8.275% (in NYC) profit, but you will have to
pay income tax on that "extra" money.
A side note: I know that in NY, if you have a certificate of authority to
collect sales tax, you are also entitled not to pay sales tax (when papers
are properly filed) on goods purchased to create your work. NYC, for
example, has tax reciprocity with NJ and Connecticut, so clay and stain and
all the crap I buy from those states are exempt from sales tax, providing I
furnish a copy of my certificate of authority and fill out a form.
As a small business person, this is one area that can be so easily
overlooked, and can get you into major trouble at tax time.
-----Original Message-----
From: Clayart [mailto:CLAYART@LSV.CERAMICS.ORG] On Behalf Of David Hendley
Sent: Thursday, April 12, 2007 10:30 PM
To: CLAYART@LSV.CERAMICS.ORG
Subject: Re: Pricing nuances
Hi Wayne, I hate to be so contrary, but I strongly disagree with your 'sales
tax included' advice.
First of all, a sign that says "Sales Tax INCLUDED" is illegal in Texas. I'm
not kidding; the attorney general has so ruled. Any such promotion is
required to have wording which says, 'sales tax is not really included. You
still have to pay sales tax, but we are lowering the price by an amount
equal to the sales tax you pay'.
They have actually taken some furniture stores to court for this. I wonder
if other states have similar laws?
Second, this is just not good marketing. People expect to pay sales tax, and
I want them to be aware that they are paying sales tax. Saying that it is
included can give the impression that you are either not collecting sales
tax or not reporting it.
I already get people, from time to time, who offer to pay cash if I will not
charge tax. I sure don't want to encourage that.
Once you get up into higher prices, sales tax really does add enough to make
YOUR price sound higher. Texas has a high rate (8.25% in most cities),
Tennessee is even higher at over 9%. That means your $100 pot is now priced
at $110, a significantly higher-sounding price.
Generally, I think the best pricing is to de-emphasize price.
You want to attract 'good' customers, not penny-pinchers and hagglers. The
best way to do this is to stick with common round numbers. Not only should
no 'cents' be involved in the price, but even a number like $19 can give the
impression that you are 'pricing for the market'. $20 is a better price, for
psychological reasons that reinforce the idea that you are a high-class
artist and you expect to receive your quoted price.
David Hendley
Maydelle, Texas
david(at)farmpots(dot)com
http://www.farmpots.com
----- Original Message -----
> Do NOT add odd cents to your prices. Keep them in round numbers:
> $5, $19, $34 and like that.
>
> To mark something $24.79, or $33.23 or $16.54 is just BEGGING for
> people to ask you "...will you take (lower round number) for that?"
> Don't invite bartering, haggling and tire kickers, unless you really
> enjoy that sort of thing. Me? I'd rather spend the time making more pots.
>
> Another tip: If you live in a state that has a state sales tax, ADD
> IT IN to your calculations for pricing, then round UP. This little bit
> extra pays you for the time you spend figuring and submitting your
> state tax.
> (Who did you say was paying you to do that? Thought so. Don't cut
> yourself
> short.) Example:
> You want $16 for your mug, and your state charges 7%.
> 16. X 1.07 = $17.12, so the price you charge is $18, and you have a
> VERY conspicuous sign (as in: with BIG RED LETTERS) in your shop/booth
> that says "Sales Tax INCLUDED".
> A "perceived" deal (the word "included" is a very subtle, yet strong
> motivator) will snag customers. Works almost every time on those
> penny-pinchers, and you'll snag other sales from those who HATE
> carrying change.
> IMHO, YMMV.
> Best,
> Wayne Seidl
____________________________________________________________________________
__
Send postings to clayart@lsv.ceramics.org
You may look at the archives for the list or change your subscription
settings from http://www.ceramics.org/clayart/
Moderator of the list is Mel Jacobson who may be reached at
melpots@pclink.com.
WJ Seidl on fri 13 apr 07
Very good advice, Lois.
In some states, you are required to have the certificate issued "visible"
during your sale as well.
FL requires that sales tax be listed separately on an invoice, as Larry
mentions. That makes it easy to separate it out when doing your figures from
a show, so not to reflect "unearned" income on which you would be taxed, as
you so correctly pointed out.
Reminding people that you are only a sales tax "collector" is a great
marketing ploy, as well as being the truth. Good idea.
Best,
Wayne
-----Original Message-----
From: Clayart [mailto:CLAYART@LSV.CERAMICS.ORG] On Behalf Of Lois Ruben
Aronow
Sent: Friday, April 13, 2007 8:18 AM
To: CLAYART@LSV.CERAMICS.ORG
Subject: Sales tax: was Pricing nuances
I don't know if NY has similar laws (and I am licensed to collect sales tax
in a whole bunch of states, as many of us are). I remind people that I
don't CHARGE sales tax - I only COLLECT it.
And when you are adding up your receipts from a show - be sure NOT to
include the sales tax collected into your profits. Do this, and it may make
it look like you made and extra 8.275% (in NYC) profit, but you will have to
pay income tax on that "extra" money.
A side note: I know that in NY, if you have a certificate of authority to
collect sales tax, you are also entitled not to pay sales tax (when papers
are properly filed) on goods purchased to create your work. NYC, for
example, has tax reciprocity with NJ and Connecticut, so clay and stain and
all the crap I buy from those states are exempt from sales tax, providing I
furnish a copy of my certificate of authority and fill out a form.
As a small business person, this is one area that can be so easily
overlooked, and can get you into major trouble at tax time.
-----Original Message-----
From: Clayart [mailto:CLAYART@LSV.CERAMICS.ORG] On Behalf Of David Hendley
Sent: Thursday, April 12, 2007 10:30 PM
To: CLAYART@LSV.CERAMICS.ORG
Subject: Re: Pricing nuances
Hi Wayne, I hate to be so contrary, but I strongly disagree with your 'sales
tax included' advice.
First of all, a sign that says "Sales Tax INCLUDED" is illegal in Texas. I'm
not kidding; the attorney general has so ruled. Any such promotion is
required to have wording which says, 'sales tax is not really included. You
still have to pay sales tax, but we are lowering the price by an amount
equal to the sales tax you pay'.
They have actually taken some furniture stores to court for this. I wonder
if other states have similar laws?
Second, this is just not good marketing. People expect to pay sales tax, and
I want them to be aware that they are paying sales tax. Saying that it is
included can give the impression that you are either not collecting sales
tax or not reporting it.
I already get people, from time to time, who offer to pay cash if I will not
charge tax. I sure don't want to encourage that.
Once you get up into higher prices, sales tax really does add enough to make
YOUR price sound higher. Texas has a high rate (8.25% in most cities),
Tennessee is even higher at over 9%. That means your $100 pot is now priced
at $110, a significantly higher-sounding price.
Generally, I think the best pricing is to de-emphasize price.
You want to attract 'good' customers, not penny-pinchers and hagglers. The
best way to do this is to stick with common round numbers. Not only should
no 'cents' be involved in the price, but even a number like $19 can give the
impression that you are 'pricing for the market'. $20 is a better price, for
psychological reasons that reinforce the idea that you are a high-class
artist and you expect to receive your quoted price.
David Hendley
Maydelle, Texas
david(at)farmpots(dot)com
http://www.farmpots.com
----- Original Message -----
> Do NOT add odd cents to your prices. Keep them in round numbers:
> $5, $19, $34 and like that.
>
> To mark something $24.79, or $33.23 or $16.54 is just BEGGING for
> people to ask you "...will you take (lower round number) for that?"
> Don't invite bartering, haggling and tire kickers, unless you really
> enjoy that sort of thing. Me? I'd rather spend the time making more pots.
>
> Another tip: If you live in a state that has a state sales tax, ADD
> IT IN to your calculations for pricing, then round UP. This little bit
> extra pays you for the time you spend figuring and submitting your
> state tax.
> (Who did you say was paying you to do that? Thought so. Don't cut
> yourself
> short.) Example:
> You want $16 for your mug, and your state charges 7%.
> 16. X 1.07 = $17.12, so the price you charge is $18, and you have a
> VERY conspicuous sign (as in: with BIG RED LETTERS) in your shop/booth
> that says "Sales Tax INCLUDED".
> A "perceived" deal (the word "included" is a very subtle, yet strong
> motivator) will snag customers. Works almost every time on those
> penny-pinchers, and you'll snag other sales from those who HATE
> carrying change.
> IMHO, YMMV.
> Best,
> Wayne Seidl
____________________________________________________________________________
__
Send postings to clayart@lsv.ceramics.org
You may look at the archives for the list or change your subscription
settings from http://www.ceramics.org/clayart/
Moderator of the list is Mel Jacobson who may be reached at
melpots@pclink.com.
____________________________________________________________________________
__
Send postings to clayart@lsv.ceramics.org
You may look at the archives for the list or change your subscription
settings from http://www.ceramics.org/clayart/
Moderator of the list is Mel Jacobson who may be reached at
melpots@pclink.com.
Pamela Regentin on fri 13 apr 07
In Oregon
We have NO sales tax!!!
Nah-nah-nah-nah-nah-nah! ;-P
Pam
(and we won't speak of the other taxes...)
WJ Seidl wrote: Very good advice, Lois.
In some states, you are required to have the certificate issued "visible"
during your sale as well.
FL requires that sales tax be listed separately on an invoice, as Larry
mentions. That makes it easy to separate it out when doing your figures from
a show, so not to reflect "unearned" income on which you would be taxed, as
you so correctly pointed out.
Reminding people that you are only a sales tax "collector" is a great
marketing ploy, as well as being the truth. Good idea.
Best,
Wayne
-----Original Message-----
From: Clayart [mailto:CLAYART@LSV.CERAMICS.ORG] On Behalf Of Lois Ruben
Aronow
Sent: Friday, April 13, 2007 8:18 AM
To: CLAYART@LSV.CERAMICS.ORG
Subject: Sales tax: was Pricing nuances
I don't know if NY has similar laws (and I am licensed to collect sales tax
in a whole bunch of states, as many of us are). I remind people that I
don't CHARGE sales tax - I only COLLECT it.
And when you are adding up your receipts from a show - be sure NOT to
include the sales tax collected into your profits. Do this, and it may make
it look like you made and extra 8.275% (in NYC) profit, but you will have to
pay income tax on that "extra" money.
A side note: I know that in NY, if you have a certificate of authority to
collect sales tax, you are also entitled not to pay sales tax (when papers
are properly filed) on goods purchased to create your work. NYC, for
example, has tax reciprocity with NJ and Connecticut, so clay and stain and
all the crap I buy from those states are exempt from sales tax, providing I
furnish a copy of my certificate of authority and fill out a form.
As a small business person, this is one area that can be so easily
overlooked, and can get you into major trouble at tax time.
-----Original Message-----
From: Clayart [mailto:CLAYART@LSV.CERAMICS.ORG] On Behalf Of David Hendley
Sent: Thursday, April 12, 2007 10:30 PM
To: CLAYART@LSV.CERAMICS.ORG
Subject: Re: Pricing nuances
Hi Wayne, I hate to be so contrary, but I strongly disagree with your 'sales
tax included' advice.
First of all, a sign that says "Sales Tax INCLUDED" is illegal in Texas. I'm
not kidding; the attorney general has so ruled. Any such promotion is
required to have wording which says, 'sales tax is not really included. You
still have to pay sales tax, but we are lowering the price by an amount
equal to the sales tax you pay'.
They have actually taken some furniture stores to court for this. I wonder
if other states have similar laws?
Second, this is just not good marketing. People expect to pay sales tax, and
I want them to be aware that they are paying sales tax. Saying that it is
included can give the impression that you are either not collecting sales
tax or not reporting it.
I already get people, from time to time, who offer to pay cash if I will not
charge tax. I sure don't want to encourage that.
Once you get up into higher prices, sales tax really does add enough to make
YOUR price sound higher. Texas has a high rate (8.25% in most cities),
Tennessee is even higher at over 9%. That means your $100 pot is now priced
at $110, a significantly higher-sounding price.
Generally, I think the best pricing is to de-emphasize price.
You want to attract 'good' customers, not penny-pinchers and hagglers. The
best way to do this is to stick with common round numbers. Not only should
no 'cents' be involved in the price, but even a number like $19 can give the
impression that you are 'pricing for the market'. $20 is a better price, for
psychological reasons that reinforce the idea that you are a high-class
artist and you expect to receive your quoted price.
David Hendley
Maydelle, Texas
david(at)farmpots(dot)com
http://www.farmpots.com
----- Original Message -----
> Do NOT add odd cents to your prices. Keep them in round numbers:
> $5, $19, $34 and like that.
>
> To mark something $24.79, or $33.23 or $16.54 is just BEGGING for
> people to ask you "...will you take (lower round number) for that?"
> Don't invite bartering, haggling and tire kickers, unless you really
> enjoy that sort of thing. Me? I'd rather spend the time making more pots.
>
> Another tip: If you live in a state that has a state sales tax, ADD
> IT IN to your calculations for pricing, then round UP. This little bit
> extra pays you for the time you spend figuring and submitting your
> state tax.
> (Who did you say was paying you to do that? Thought so. Don't cut
> yourself
> short.) Example:
> You want $16 for your mug, and your state charges 7%.
> 16. X 1.07 = $17.12, so the price you charge is $18, and you have a
> VERY conspicuous sign (as in: with BIG RED LETTERS) in your shop/booth
> that says "Sales Tax INCLUDED".
> A "perceived" deal (the word "included" is a very subtle, yet strong
> motivator) will snag customers. Works almost every time on those
> penny-pinchers, and you'll snag other sales from those who HATE
> carrying change.
> IMHO, YMMV.
> Best,
> Wayne Seidl
____________________________________________________________________________
__
Send postings to clayart@lsv.ceramics.org
You may look at the archives for the list or change your subscription
settings from http://www.ceramics.org/clayart/
Moderator of the list is Mel Jacobson who may be reached at
melpots@pclink.com.
____________________________________________________________________________
__
Send postings to clayart@lsv.ceramics.org
You may look at the archives for the list or change your subscription
settings from http://www.ceramics.org/clayart/
Moderator of the list is Mel Jacobson who may be reached at
melpots@pclink.com.
______________________________________________________________________________
Send postings to clayart@lsv.ceramics.org
You may look at the archives for the list or change your subscription
settings from http://www.ceramics.org/clayart/
Moderator of the list is Mel Jacobson who may be reached at melpots@pclink.com.
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