Holiday Coro business practice

[AAH]

This was posted over on doityourselfchristmas. David Moore from HolidayCoro has been pinged by the tax man for not paying sales tax that he was liable for and to reduce his liability he has named other Christmas vendors including San Devices and KulpLights. Other vendors may also have been named and there is no way of David Moore knowing if these vendors were doing right by the tax man or if it was just him.

Do It Yourself Christmas

synchronized christmas light display

doityourselfchristmas.com

 

[Nojoy]

Interesting that the competitors in the responses aren't replying with 'that's what happens when you are a tax cheat', but rather 'why did he have to shine the spotlight on me too' or 'I'll get him for this'...

 

[Skymaster]

ther vendors may also have been named and there is no way of David Moore knowing if these vendors were doing right by the tax man or if it was just him.

Correct. But ultimately if they are doing the right thing when audited, then it doesn't matter, the truth will prevail. Whereas if they are engaging in their own shady practices, then the IRS will probably offer them their own lifeline, and guaranteed they'll be throwing others under the bus whilst they are at it.

 

[AAH]

Twas the week before Xmas and all through the US Xmas vendor community not a creature was stirring.

 

[merryoncherry]

Those in AUS may not realize the Byzantine nature of state sales tax here... it is not IRS/federal, each of the 50 states has different rates, thresholds for a "nexus", and enforcement agencies, and if you go over the threshold in a state then you owe retroactively, but if you're under and you collected for them they don't send it back. Or that's the case in some states. It is a PITA for small business to comply, so they are exempt, but knowing if you are (going to stay) small enough is the trick.

Which of the 50 states will you do on the order of $100,000 in business, state-dependent? Many vendors in the hobby are probably well under in most states.

 

[Skymaster]

Oh completely understand that everything is state specific. But, as per all laws and regulations, ignorance is not a defence.
If you want to trade in that state, you need to be across its tax laws, simple. If you're not willing to do that, then don't sell.
If that requires you to keep a few dollars away in case you cross a threshold, then make sure you have it.
A pain in the butt for sure, but it goes with running your own business.

There are similar state based tax implications here, but more around the payroll side of things when you have employees in multiple states. Certainly not to the degree over there.

 

[Katekate]

In aus its 10% on (almost) everything. all goes to the fed who hand some out to the states.

 

[Wayne1]

Interesting that the competitors in the responses aren't replying with 'that's what happens when you are a tax cheat', but rather 'why did he have to shine the spotlight on me too' or 'I'll get him for this'...

That was my first though as well

And Kulp guy, WOW , and here I was thinking xlights was a community, turns out its Kulp person fiefdom

 

[Katekate]

That would be a massive d--- move from kulp if he did that.

 

[Croydon Lights]

But the problem with the vendors that are doing the right thing are they now have to prove that they are with a audit which will cost them money that they can not get back and will come off their profits so they will need to charge us more because some one was caught in the till and want to bring others down with them to save themself from paying the full amount of what they required to pay

 

[Katekate]

Yeah, same as a lawsuit. Even if you did nothing wrong its still a massive hassle and cost.

 

[Skymaster]

Definitely. But it could have happened at any time, and audits on business tax do happen regularly (and often self-audited so the paperwork is ready to go when asked)

Note: Not arguing it isnt a pain, or expensive, but realistically, its something that should always be accounted for in running a business that it _could_ happen

 

[David_AVD]

The simplified sales tax system (Goods and Services Tax or GST) was a great way to go imo. Before that there were various tax rates, some people were exempt and all sorts of shenanigans. Overall there wasn't that much pain changing over for most people. I found it super simple to implement.

 

[merryoncherry]

Don't worry, when the US vendor doesn't charge me sales tax of course I self-report the use tax.
(https://www.mass.gov/service-details/individual-use-tax)

 

[AAH]

The simplified sales tax system (Goods and Services Tax or GST) was a great way to go imo. Before that there were various tax rates, some people were exempt and all sorts of shenanigans. Overall there wasn't that much pain changing over for most people. I found it super simple to implement.

Yeah the change from sales tax to GST was great and it was much easier to work with. Before there was 10, 20 and 30% sales tax from memory based on the origin of the parts etc. The US tax system appears super weird to me. There's federal and state taxes and some states have no personal income tax.

What's also weird is that there's an incentive program for dobbing in people/companies that you think may be dodging/failing to tax like you were. It's somewhat akin to the reduced sentences that are handed out to criminals for testifying. I wonder if there was a requirement to name a company per state for each 1 that was chasing sales tax? To me a fair and equitable system would be if you do the crime you pay the time with no way of a reduced sentence. If you had information akin to states evidence that you could give then that may be a fair thing. To simply name names is just totally wrong.