OK. So we've all heard about the budget shortfalls and states' attempts at closing their budget deficits. We've seen new taxes popping up in most every state with the intent to expand the tax base and capture additional sales tax revenue. I have mixed emotions when I see these changing tax laws as I'm philosophically opposed to them yet it means the continued necessity for professionals in this industry.
But I saw one recently that bothered me more than normal...that would be the taxing of food sales by the Girl Scouts and Boy Scouts. More specifically, cookie sales for the Girl Scouts and popcorn sales for the Boy Scouts.
In Georgia, House Bill 385 is proposing this change to the Georgia sales tax regulations. This is one that I'm personally connected to as I have 20 or so boxes of newly purchased Girl Scout cookies in my pantry that I bought from my daughter. Likewise, I have multiple bags of popcorn lying around that my son sold earlier in the year. I have seen first-hand how these programs have not only helped my children but other children as well. Don't get me wrong, I am quite the capitalist but have a soft spot for these programs. I have seen children that can't otherwise afford day camps, summer camps, or even the uniforms needed to participate that were funded by sales of either cookies or popcorn.
Taxing these items will negatively affect the Girl Scouts and Boy Scouts programs. Can we all focus our efforts elsewhere?
A great number of issues I help resolve are pretty easy to prevent. Mechanics will tell you that it's not so hard to avoid a car that won't run if you'll just check your engine once in a while. I think it's the same issue with sales tax - you just need to check your tax engine once in a while. Just like the mechanic who deals with an angry customer who's been stranded on the road...in the rain...on a cold day...with no jacket, a couple of my advisory conversations have gone the same way. Somehow, somebody, or something else caused their tax problem and they have to deal with the repair issues now. So the DOR and I get the brunt of their sore temperament about the situation.
Sometimes the rules, rates, changes, etc. aren't clear - I really do get that. What I don't get is how someone can sign a return when they are not certain about what it contains. I mean, eventually the sales tax data has to connect to the returns which has to reflect the statutes...right? That's what the auditor will tell you when he shows up. So why does someone submit a return where they haven't already connected the dots on data-to-return-to-statute? It's probably because they don't know how...just like I don't know how to get the gasoline to my fuel injector, which eventually results in power getting to my wheels.
Make sure you're filing something that makes sense and keeps you in full compliance. And if you don't know, ask someone who can advise you properly. It's a shame to have to ask someone after the auditor has already shellacked you, and nothing can really be done about it.
Stop checking the mail if you do business in Minnesota. Like most states, Minnesota is suffering from the effects of the economy. So much so, it has suspended certain business related tax refunds. While this suspension will not affect individual taxpayers, businesses expecting refunds associated with capital equipment, sales tax, and corporate franchise taxes are going to have to wait until things improve. There is no definitive timetable on when the issuance of checks will resume. However, interest will continue to accrue and will be paid. The legislature approved this suspension in L. 2010 § 6 (1st S.S.). ( Business tax refund delays, Department of Revenue, 10/21/2010 .)
A number of states are experiencing similar effects from the economy and some have been delaying the payment of refunds for some time now. If you are experiencing delays in refunds, you may be afforded an opportunity to take credits against current and prospective tax liabilities - under certain conditions and in certain states. Not all states allow this practice and you should check with your sales tax advisor or refer to the state statutes before pursuing this remedy.