Paying taxes is an inevitable part of operating a business. Depending on where you live in the United States, sales tax is a mandatory part of taxation and the billing process of a farrier practice. Unfortunately, the lack of uniformity makes collecting sales tax confusing.
What complicates taxes in general, but especially with sales taxes, is location. Some farriers cross state border to serve clients. Each state has its own rules on sales tax rates and what goods and services will be taxed. Many farriers are traveling throughout cities and counties within one state to work with their clients’ horses.
Overall sales tax rates can differentiate between these local jurisdictions because of additional county and city sales taxes that are added on to the state’s rate. In general, most tax codes state that sales tax will be remitted, or paid, by the merchants making the sales, regardless of whether they collect the tax from the purchaser.
Retired farrier Buck O’Neil, who holds a master’s degree in taxation and has experience as a CPA, says it isn’t good enough just to be aware of the sales tax law and knowing what to collect. Your record keeping must be thorough.
“You may be working in one area in the state where it is 7%, but just one county over, they add ½% more,” says the Horse Shoe, N.C…