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sales tax and cash retail sales

updated sun 18 jul 10


May Luk on sat 17 jul 10

When I take cash sales, it would appear that I don't collect sales tax
to the buyer. But I write receipts on every sales in my 3 part carbon
booklet. Most of the time, I don't give it to the customers because
it's more for my own bookkeeping, unless they ask. First, I don't have
a cash box to give change so it's easier to round off everything for
the cash sales. I also want to encourage cash sales because I won't
get hit with a fee. I get charged when I try to withdraw money from my
credit card account. I also get charged if I get a bump credit card,
but this never happens as handmade craft buyers are usually very

I do go back to the receipt and write out the price and the tax. This
is advised by my accountant. I have to write it out explicitly, So for
a $30 sale, the buyer pay out $30 but I would redo the tax by dividing
the final amount as 30/1.0875. (sales tax is 8.75% in NY) But if it's
a credit card sale, the payout for the customer will be 30 x 1.0875 =3D
$32.63. I know it is illegal to charge credit card extra but this is
my call to give anybody discount for whatever reason. I have gone to
many sales that says cash sales 10% off. What is your opinion on this?

I am of the opinion that if you write out sales tax in front of the
customer, they would have more respect of you as a serious business,
not just some small street vendor who's out to make a quick buck.
Customers would less likely to haggle (this happens a lot in New York
City, where they think it doesn't cost anything to ask)


[...] From there we went on to discuss the tax liabilities in a cash
business like art fairs. I've been audited and make sure I declare
every dollar I take in . The worst thing you can do is hold out some
cash. They will assume you are holding out more than you say. I have a
friend who never declares the cash she takes in, just the checks and
charges. She thinks the IRS will have to prove how much cash she takes
in. If she is ever audited she'll probably lose everything she has.
The IRS will make a determination about how much cash she has held out
over her thirty year career and then assess penalties and interest.
Again, her burden to prove them wrong. A losing battle.

Collect the tax and pay it. Deposit all of your sales and declare the
income. In the end it's just to expensive to do otherwise.



Lee Love on sat 17 jul 10

We use a chart and charge the exact amount of tax. Most sales are
checks or VISA. I bring change, but don't have to make a lot of
change. I use a 2 part recipe book (current one is from Japan) for
all no-credit card sales. (credit card slip is record for the sale.)

When I do my totals, I don't count the tax, so I never think of it
as mine. I just collect it for the State. I pay it online when I
get home from the fair so I don't have a big bill to pay in sales tax
at then end of the year.

Lee, a Mashiko potter in Minneapolis

=3D93Observe the wonders as they occur around you. Don't claim them. Feel
the artistry moving through and be silent.=3D94 --Rumi