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Florida Sales Tax Tales: Facts vs FictionThrough the course of this webinar we will discuss basic sales tax [indiscernible] we will discuss maintenance, and common sales tax transactions. We will also discuss each tax, and how to file and pay. Before we get started, in an effort to improve future webinars we has some polling questions. One I will ask now in the other Gary will ask at the end of the presentation. The first one is how many years have you been in business? >> Okay. I think that's probably plenty of time for you all to answer that first question. Okay Brittany, let's get this webinar started with the first fact or fiction. So fact or fiction, new businesses must register at their nearest service center. The department has made registering your business to collect and remit tax easy. You can register online using the online application, you can submit a copy of the DR one, the Florida business tax application, or you can take your application to the local service center and receive a certificate on site. To use the online system simply go to Florida and click general tax at the top of the page then select register to report taxes. The register to report and collect tax the button will take you directly into the electronic application. From this page business owners or their authorized representative will be prompted to answer questions about their business activities. [indiscernible] determining which taxes are required so it's important to fill out the application with your current business activities. Brittany what if I wanted to make corrections to my registration. Corrections are easy also. Simply go to Florida and click on the text button at the top of the page, and select the update account information online, you can notify the department of changes to your account. Selecting that button will take you directly to the change account information page which provides a form for you to submit changes. Changes to your address, changes to your account status, cancel your account or place it on active status. In a change to the business name can also be done in this form. There are a few changes that require a new Florida business explication. Such as a change to your legal entity type. If you originally registered as a sole proprietor and filed with the department state, to become an LLC or limited liability company, you are required to submit a new application indicating your changing your legal entity or business structure. Changes to your business ownership require a new DR as well. Say you and I jointly own a bakery LLC and I decide I'm ready to retire. If you decide to keep operating and by me out of the business, you will need to submit a new business tax application. Changes in address from one county to another also require a new application. As well as adding an activity or second business location . Using the earlier example Gary, if we open our first make relocation and decide to open a second location in Jacksonville, it will require its own certificate. So a new application would be required . All right Gary cutbacks or fiction? Sales tax only applies to the sale of tangible personal property? This is fiction Brittany. Sales tax implies I variable amount of [indiscernible] tangible personal property. Tangible personal property are items that may be seen, weighed, measured or touched, or in any manner perceptible to the census. Examples include close, such as shirts and shoes, tools like a hammer or shovel, housewares like knives, forks and spoons. Even food products that are prepared and served at a restaurant are considered tangible personal property. For example if I drive up to a fast food restaurant and order a hamburger and French fries and a soft drink, these items are all tangible personal property and are subject to sales tax. Some items of tangible personal property are not subject to tax like general grocery items such as baby food, cereals, milk, eggs and vegetables. These items are all exempt from sales tax. There are also other items generally not subject to sales tax such as a wheelchair, prescriptions, common household remedies such as pain relievers, cold and sinus and allergy medicines or even Band-Aids. However cosmetics and toiletry items are subject to sales tax, like makeup and suntan lotion, soap and shampoo and deodorant. Some items may also not be subject to tax because the items purchased were purchased for resale, or the entity purchasing is tax-exempt like a church or a governmental organization. We have published a list of nontaxable products in general grocery items on our website. It is form DR 46 ENT. You can go to the site to review this form. Florida also imposes a tax on the rental of real property. Real property as land or any improvements to the land. In these cases sales taxes imposed on the rental of commercial property or buildings. Commercial property or buildings include office or retail space, warehouses and many warehouses, and convention rooms or meeting rooms. The tax on commercial property is imposed regardless of the duration of the rental which could be one month, one year or even longer. Sales taxes also imposed on transient accommodations. Rooms in hotels and motels, timeshares, and beach houses, where the rental duration is for six months or less. Taxes also imposed on the sale of admissions like going to see a movie at a movie theater, or playing a round of golf at a golf course. Certain services are also subject to sales tax. These include detective or burglar protection, cleaning or janitorial services in commercial buildings, or pest control in commercial buildings. Cleaning or janitorial services in residential households is not subject to tax and neither are pest control services provided to residential households. My mom uses a pest control service to come spray her house once a month for the. The charge for the service is not subject to sales tax. Florida also imposes a tax on the sale of service warranties such as an extended warranty you might purchase with the new appliance [no audio] >> Must be separately stated on a bill or invoice to the customer. Sales tax applies to the entire sales price which generally includes all charges to complete a transaction. So the term sales price means the total amount paid for tangible personal property along with any services that are part of the sale and includes both materials and labor to repair tangible personal property. The word sale means the transfer of title or position or both. For a consideration. When I purchase a shovel from a hardware store, I paid for the shovel either with cash or debit or credit card, and I take possession of the shovel as I work out of the store. Sales taxes due at this time or this moment, and again it must be separately stated on the customer's bill or invoice. To follow this transaction a bit more, let's say I buy a shovel from a hardware store on December 12. The hardware store will report this sale along with all the other sales in December, on its December sales and use tax return in January. From the hardware store it doesn't matter what I paid with. The hardware store reports the sale on their December sales and use tax return regardless of the method of payment. Again, sales tax must be separately stated on the customer's bill or invoice. It is based on the full sales price for all charges to complete the transaction. Let me use another example Brittany. That say you're having trouble with your cars battery so you take your car to a repair shop. They say you need a new alternator. The repair shop will not only charge you for the alternator but they will also charge you labor to install it. In this case, the sales price includes the alternator, and the labor charges to complete the transaction. Sales tax should be charged and collected on the alternator and labor. In the next example we see the charge for the alternator is $139. The labor charges $88. The sales price in this case includes the alternator and the labor. So the subtotal for the two prices is $227. This is the amount subject to sales tax. Sales taxes also due on sales made with a deferred payment plan such as credit sales or sales made using installment payment. Sales tax is due on the sales at the moment of the transaction. And should be reported by the business on the sales and use tax return. For example Brittany say I own a furniture store and you come in on December 12 and buy a new dining room set. As part of the contract you put down 10 percent and we agree to make 12 monthly payments. We have scheduled to deliver your new dining room set this next week. Remember sales tax is due at the time of sale. So the day you come in and purchase the dining room set, December 12, this is the date the sale takes place. As the furniture store dealer I will report the sale along with all my other sales and receive, for this month on my December sales and use tax return, which is due in January even though I haven't received a whole payment from you. Brittany as you recall your property includes commercial buildings and accommodations. Remember sales taxes imposed on commercial buildings regardless of the duration of the rental. While sales tax isn't charged on the transient accommodations, the duration of the rental is six months or less. For example Brittany, let's say you own an office building and as part of the rental agreement your tenants rent is due on the first of the month. So what do you do if your tenant pays you on December 30 for their January lease? Your tenants payment was paid in December and as part of the December receipt, commercial lease payments received in December should be reported on your December sales and use tax return, which is due in January. Just like if you were selling tangible personal property. In this case you are filing and paying taxes for money you received for the rental of your commercial office building. Sent you received your tenants rent in December, you will report this rental receipt on your December sales and use tax return, which is due in January. However if your tenant pay the rent on January 1, for the January lease, their payment would become part of your January receipts and you should report on your January sales and use tax return due in February. Okay Brittany, here is the next fact or fiction. The sales tax rate in Florida is six percent. This is actually a bit tricky. I will say this is a pact with a few exceptions. The general sales tax rate in Florida is six percent but some transaction types impose different rates. For example amusement machines are taxed at a rate of four percent. Commercial rent will change to 5.8 percent effective January 1, 2018. In the sale of electricity is taxed at a 6.95 percent. Now in addition to the general sales tax rate, Florida law also authorizes local government to impose several types of local option taxes such as local option fuel tax, tourism impact tax the convention development tax, municipal resort tax, and local option food and beverage tax as well as the most commonly owned, like discretionary sales surtax and development tax. Discretionary sales surtax ranges from .5 percent to two percent and is used to fund county level programming and the structure improvement in transient rental tax imposed on the rental of residential dwellings for six months or less, commonly referred to as Taurus development tax. -- Tourist development tax. You can go to Florida but what's important to note is local governments can adopt local taxes which are a combined sales Representative rate. In some cases it's administered by the local government. The apartment manager's responsibility is collecting the combined sales and any impose local option tax collected, and distributing the tax to the various counties. Making this distinction is important, particularly when reporting tax collected through the department. Brittany, it's good you bring up these exceptions because often times taxpayers have a difficult time understanding how these taxes can make up their combined sales tax rate. Let's take a moment to talk a little more about the two most common local option taxes you mentioned. Discretionary sales surtax and tourist development tax. Discretionary sales service tax -- surtax rates vary from county to county and should be added to the general sales and use tax rate. Discretionary sales surtax is applied to all transactions subject to the state sales tax. Surtax is are approved in general elections and are used to fund a variety of government supported programs such as transportation systems, public construction projects, health care for the poor, and emergency fire and rescue services and facilities, just to name a few. Today 61 of Florida's 67 counties impose one or more discretionary sales service tax the best surtax is the best -- surtax is. I'd like to go over the basics. To begin Florida has a tax For tangible personal property. The surtax is capped at $5000 which means only the first $5000 of the sales price is subject to the surtax. As an example, let's say you buy and register a car in a county that imposes a 1.5 percent discretionary surtax. The total tax rate for this county equals 7.5 percent. Which is the general sales tax rate of six percent plus 1.5 percent. The price you paid for the car is $20,000. The car is of course tangible property so the surtax Applies to your purchase. In this case the general sales tax rate of six percent applies to the full purchase price. $20,000 times six percent equals $1200. To compute the 1.5 percent discretionary servers -- sales surtax you only multiply $5000. Which equals $75. The total sales tax and discretionary sales surtax imposed on your purchase was $1275. It is also important to note the surtax Does not apply to the rental of real property. Previously Brittany in the webinar we mentioned the rental of commercial property includes commercial buildings in transient accommodations. So rent paid for office or retail space is subject to both the general sales tax raise in any applicable surtax rates. For example let's say you own an office building in downtown Miami. You lease office space in the building for $20,000 a month. Miami-Dade County imposes a one percent surtax that since there is no surtax On the rental of commercial property, the monthly payment in the amount of $20,000, the rent you receive from your tenant is subject to the total rate of seven percent. Which is combined six percent sales tax in the one percent surtax. $20,000 times six percent is $1200 as you see on the screen. Again since there is no surtax On the rental of commercial property, the $20,000 rental payment is also subject to a one percent surtax which is $20,000 times one percent, or $200. So the total tax due on the rental payment is $20,000 times seven percent or 1000 $400. -- $1400. So the DR 15 DSS, shows all of the counties in Florida with respect to the discretionary sales surtax rates. The highlighted section on this slide is an illustration of the information provided. The discretionary sales surtax rate, the date the tax was adopted, and the surtax expiration date if one applies. An important point as Britney mentioned, counties can collect multiple local option taxes. The same rule applies to discretionary sales surtax is. There are currently nine different types of these taxes also called local option County sales tax allowed by law. Let's take a look at Lyon County. Leon County imposes an additional 1.5 percent surtax which is combined of two different surtax is. One was effective December 1, 1989 and the other, second one was effective January 1, 2003. You will also note that they have different expiration date. But Gary, how can you know what tax rate to collect quick The general rule for computing a discretionary sales surtax is it is imposed at the rate where delivery or possession of the property takes place. This chart which is on the website illustrates when and what surtax to use, and it's especially helpful when the neighboring counties next to where you live either don't have a surtax or the surtax rate is different than the rate that the county is where you live. Let's use the example for the stare on the chart where you own a furniture store in Santa Rosa County. You sell me a chair. In the first example, let's say I also live in Santa Rosa County and since I don't have a truck, you have agreed to deliver the chair to my home. Since the surtax is imposed for delivery or position taking place, you should charge me Santa Rosa counties additional one percent sales surtax. Sent you delivered it to my home in Santa Rosa County. What if you do have a truck and take the chair with you. Since position -- possession of the towel takes place in this door, the same tax Santa Rosa County implies. If I'm in Okaloosa County, it does not impose a discretionary surtax. So if I ask you to deliver the chair to my home in Okaloosa County, this is where the complication is. Since Okaloosa County does not impose the surtax, you only charge me the general sales tax rate of six percent. And if you have a truck and pick it up, I will charge you the Santa Rosa County sales tax plus the surcharge. That is right Britney. In the last example say I live in Escambia County. Escambia County imposes an additional 1.5 percent surtax. If I ask you to deliver the chair to my home in Escambia County, just like in the previous examples, this is where delivery of the chair takes place. Since Escambia County imposes an additional 1.5 percent, you will charge me this rate in additional to the general sales tax rate. Now the other tax is tourist development tax . Can you talk more about this tax. Sure Gary. In addition to state sales and use tax and discretionary soul -- sales surtax, Florida allows transient rental taxes on rentals or leases of residential dwellings for six months or less on accommodations like hotels, motels, apartments, townhomes, mobile homes, RV parks. This tax may be used for capital construction of the tourist related facility towards promotion and beach and shoreline maintenance. However the approved uses are dependent on the counties authorized rate and there is a minimum of three percent to a maximum of six percent. The department produces the form DR 15 CVT, which is the county local option transient rental tax rate form. The administration highlights counties that do not impose the development tax as shown in section 1. Counties that are state administered in section 2, and then self-imposed in section 3. For counties that self-imposed, taxpayers should still sell their surtax to the department. Taxpayers must register with their local taxing authority to remit the taxes directly to the county in which the property is located. So Britney, since we are talking about the tax on transient rentals, we have equipped -- a couple of questions for you. What if I own a hotel and my guest wants to smoke in their room, or they have a dog and I want to charge them a fee for this. Are either of these fees subject to sales tax quick That is a good question. This is actually kite -- quite common in the hotel industry. The use of the room or the requirement you make to use the room, even if you don't make a separate charge, these charges are subject to sales tax including the total consideration received for the use of the accommodation, as long as the payment is required to be paid by the guest as a condition of the use or possession of the accommodation. Okay Britney. I think I understand how sales tax and discretionary sales surtax would apply. Say I am traveling and I need to request an additional rollaway bed or crib, how will the tax be applied in this case? Another great point . the question is whether the charges subject to surtax, and towards the development tax. In this case the charge would only be subject to sales tax and any applicable sales surtax as the rental of tangible property. The charges not subject to Taurus development tax the best tourist development tax because it's not required for the use of the room. And remember tourist development taxes only leveled -- levied on the condition you are renting the property. So the rental of a rollaway bed or crib is not a condition of the rental of the room, while a pet fee or smoking charge would be. Gary we spoke about the various tax rates and how to determine what rates to collect. Can you explain how a dealer might determine how much tech to collect. Does Florida have a system to help calculate? Yes, Florida does use the system to help calculate the correct amount of sales tax. Is called the bracket system. The bracket system is designed to help businesses calculate the correct amount of tax on each sale for a transaction, because it's not as easy as it may seem. So the department has developed bracket cards for each tax rate in Florida in the next slide shows you the form. This form provides a table for each tax rate in Florida, it's available on the website at Florida . Most people like me learned rounding principles in school. That is not how calculating tax in Florida works. The reason for this is because [indiscernible] rounding to the closest decimal place means sometimes rounding down. It could result in imposing a rate that is less. Let's use a simple example. Britney say you own a thrift shop and I buy an item for your store for 11 hours -- by an item from your store for $11. Let's show how the bracket system works to make sure you correct collect the correct tax. Say you own a convenience store and you sell me an item for dollar and $.55. The best 1.55 cents. It falls into the [indiscernible] bracket. If you multiply $1.55 times [indiscernible] the rounding principles we learned in school made tell you the nearest cent is nine cents. Since there isn't a one third penny, we would probably round to the closest penny so nine cents would be fine. But it is not. When you calculate the actual tax rate, [indiscernible] it results in a tax rate of 5.8 percent. The general tax rate in Florida is six percent, which means it cannot be any less than this rate. The bracket system calculates the correct amount of tax on all sales. So we don't make this mistake. In this case the correct amount of tax due is $.10. Britney if you have 100 or more sales transactions and you calculate the rate you charge customers by rounding methods, you could be off by a few pennies on all of your sales. When this is multiplied by hundreds of transactions, it could amount to a substantial amount of payment on your tax. Here is the next fact or fiction for you. I can avoid tax if I purchase items out of the state for my business. That is fiction Gary. If you buy an item for use in your business and you are not charged at least the rate of tax imposed on Florida, you owe use tax. A deli owner purchases a display case from an out a -- out-of-state vendor and was not taxed for example. Some items that companies typically buy for their businesses include office supplies which includes anything from pens to cleaning supplies. Business furniture like shelving and displays. In computer software and hardware. Purchasing any of these items, you must either pay the sales tax at the rate imposed by Florida at the time of purchase, or pay use tax when the item is brought into the state. You notice I mentioned the term use tax. What exactly is use tax? It is actually equivalent to sales tax and levied upon the use, storage, or consumption of taxable tangible personal property in Florida that has not been subjected to tax. Use tax is applied where a product or service was converted for use where tax were not previously paid. This is an important point Britney. I am glad you brought it up. When a business converts an item originally purchased for resale, for their own use, and tax was not paid, it is subject to the use tax. Let's use an example. And one of our earlier examples you owned a convenience store. In your convenience store you sell a variety of items. When you originally purchased the items, you purchase them without paying tax because you purchased them for resell. Let's say you run out of trash bags for your store, so you pull a box of trashbags off your self that the shelf that you normally sell to customers. You did not pay tax on them. But now you have converted these trash bags for your own use instead of reselling them. In this case you would owe a use tax on the box of trashbags because you did not resale them, you use them for your business. You should report the use tax due on this box of trashbags on your next sales and use tax return. [indiscernible] in this case to report the use tax that you owe when you converted the box of trashbags for your business. I think this is a good time to also talk about buying items for resale. Businesses can purchase items for resale using a Florida resale certificate. First you must register with the department. After your registration, you will receive an annual resale certificate. Your resale certificate or form the are 14, will display your is this his name, location address, and your unique certificate number. DR 13. There are several instances where a registered sell packs dealer or business can purchase items without sales tax. Items that you intended to purchase for resale, you remember the earlier example where I purchased a shovel from a hardware store. Hardware store is a registered sales tax dealer for business and received a Florida resale certificate just like one we just saw. The hardware store would be able to purchase the shovel from their supplier for resale, using their annual Florida resale certificate without paying a sales tax. Another instance when a business can purchase items, is when they purchase items that will become a component part such as in a chair or piece of furniture. So returning to when I owned a furniture store and I sold you a dining room set. I can buy the dining room set from suppliers but say I actually make these items. I buy the parts I need such as the wood, nails, glue etc. to make these items. I can buy all of these parts exempt from tax because tax will be due when I sell you the furniture because you are the ultimate purchaser of the dining room set. Certain services can also be purchased as a sale for resale. For example say you own a commercial canning business and you sign a contract with me to clean my office building. You don't have enough workers and so you subcontract the commercial cleaning of my office building to another commercial cleaning company. Since you are a registered sales tax dealer for business, you get the other cleaning company a copy of your Florida resale certificate so they won't charge you sales tax. Instead you will charge me sales tax because in this case I am the ultimate customer of the commercial cleaning service. Re-rentals or items purpose for rental, so you own the rental company and you been all kinds of tools and power equipment. You are a registered sales and use tax dealer for business. When you purchase or rent these items, you give them a copy of your resale certificate and they will not charge you sales tax because you will be renting or re-renting these items to your customers who are the ultimate consumer. Okay Britney. The department provides different ways to remit sales and use tax. That is a fact. I'm sure you know the standard form for filing sales and use tax is a DR 15. Taxpayers report their tax by mail using the paper version of this form, or file directly at their local service center. You can also file a return and submit a payment electronically using the file and pay website. To use the website to file, simply go to Florida and select file and pay, taxes, fees and remittances. On this page click on sales and use tax to reach the login page. The login page is where you can enter either your userid and password, provided by the department of -- upon enrollment, or your certificate number without dashes and your business partner number. Your business partner number is a unique identifier assigned by the department and is located on the back of your certificate of registration. Under the link file and pay, it will allow you to pay your sales tax return. This page also provides a ton of other useful links, most notably the print resale certificate link which enables you to print a copy of your current annual resale certificate whenever you need it. Of course anyone may voluntarily file and pay electronically. However, taxpayers who pay $20,000 or more in sales and use tax during the most recent state fiscal year are required to file and pay tax electronically during the next calendar year. There are several benefits to filing electronically. Businesses that e-file their return timely are entitled to receive a collection allowance, which is currently 2.5 percent of the first $1200 in tax due, not to exceed $30. There are no postage charges or paper forms to mail, and information center the website is encrypted and secure. Will Britney, earlier you spoke about registration and filing methods. Now might be a good time to talk about when taxpayers are required to file their tax returns. Most new businesses are originally set up by the department to file and pay their sales and use tax returns on a quarterly basis. Depending on the type of business they have, the department may require the filing frequency differs. Like semiannually or maybe only once a year. After a business has for calendar quarters are when your tax returns, the department will analyze the taxes remitted. And determine the best filing frequency the business should used to report and pay their taxes. For example, if the prior four quarters of the businesses tax returns show annual tax selections that exceeded $1000, the department may require the business to file and pay their sales and use tax on them the basis. This slide shows the annual tax selection and filing frequencies the department uses. Taxes due by the 20th of the month? Actually Britney cut tax returns are due on the first day of the month following each reporting period. They are late after the 20th. We do find that a lot of businesses wait until the last day to file their tax returns. Sometimes waiting until the last day can be a problem. We never know what could happen in the future that might prevent us from filing on the last day. Is something happens unexpectedly and delays filing the tax return, we could end up being late. We would like to encourage you not to wait until the last day to file and pay your tax. If the 20th falls on a Saturday, Sunday or holiday, returns are considered timely filed if they are filed [indiscernible] postmarked or hand-delivered to one of our service centered on the first day following the 20th. Earlier this year we had an interesting filing experience. This past February 20 was Presidents' Day, which is a legal holiday. The January tax return was due on February 1 and would have been late after February 20 except this year the 20th was a legal holiday. The next business day was February 21. Tax returns filed electronically, postmarked or hand-delivered to one of our service centers on this date would have been considered timely filed. This is not the case with paying your taxes though. Britney can you explain the requirements for paying taxes as opposed to filing a tax return. Gary, payments but -- must be initiated no longer than 5 PM Eastern standard Time on the last business day prior to the 20th, in order to be considered timely. Of Florida calendar of due dates form DR 659 is available on our website. For example, since the 20th is a Monday and also a legal holiday, the payment would be need to be initiated on the 17th by 5 PM. Payment scheduling allows taxpayers to initiate their return and payment early and select a future date for the payment to be debited. I can initiate my return today, December 12, and scheduled the payment to be debited from my account on December 20. This would be the same if I owe no tax. That is correct, even if you owe no tax you are still required to file a tax return. The department does have a very convenient method for filing tax returns if you don't owe any tax, penalty or interest. It is our tele-file method. It allows to submit a zero report over the phone via automated system. However if your business is obligated to electronically file, you cannot use the tele-file method. We are just about finished but let's go over a few of the common errors taxpayers make when filing sales and use tax. That's a good idea Britney. Over the years we have seen a lot of common mistakes businesses make. One of the most common is businesses use the line one line for reporting tax. This is a copy of the front of our use and sales tax return. It has a line for sales, a line for taxable purchases, a line for commercial rentals, another for transient rentals, and one for food and beverage bending. It's important -- bending, it's important to report on the appropriate line. This is especially important this coming January where the sales tax rate for commercial rentals goes from six percent to 5.8 percent. If you lease office space you need to make sure you report the rental online member see. -- C. [indiscernible] six percent would result in an underpayment calculation and they will send you a bill with additional tax that appears on the return. We have also found many businesses forget to report the discretionary sales surtax they collect on the back of the return. It is important the information in this section is accurate. You will notice there is a line for filing the discretionary sales surtax amount. Line 13 A. -- Line 15 A. Parser taxes due in other counties, as we explained earlier. We also find when they find the best file a paper return they fail to give us their telephone number. Remember returns and payments are due by the first day of the month following the end of the reporting., However electronic payments must be initiated no later than 5 PM Eastern standard Time on the last working business day prior to the 20th in order to be considered timely. Today's presentation included discussions on registration and account maintenance, common sales-tax transactions, use tax, tax rates, and how to file and pay. All right. Here is our second and final poll question. How did you learn about this webinar? We will give you a moment to make your selection. >> Okay. So we hope this webinar has been helpful to you and provided a foundation for your business success. Although we have shared some information to get you started, we know you may still have some questions. We are happy to answer them. Okay. Okay guys. Britney and Gary can you hear me okay quick Yes ma'am. Excellent. Thank you so much, both of you. We will now start the Q&A portion of the call. I will be reading the chat questions that our participants have been sending in over the course of the presentation. In the time remaining, we will address as many questions as we possibly can. Please note if we cannot get to your question during this Q&A segment, I encourage you to connect with a SCORE mentor after today's webinar. SCORE mentors can be located and requested online or at a local chapter near you. To help you apply the strategies presented today. Also we will be sending out the slide deck for today's presentation, that includes the contact information, the if the OR, and you can reach out there as well. So let's go ahead and kickoff these questions. Britney and Gary, the first question comes from the. -- [indiscernible] our delivery charges subject to sales tax? Yes can't transportation services are not subject to tax when the charges separately stated on an invoice or bill of sale and the charge can be avoided by a decision or action made by the purchaser. If the Choi -- charge can be voided by picking up the goods themselves, the charges exam. If the dealer does not allow the customer to pick up the merchandise, the transportation charge becomes part of the sailing price and is subject to tax. For example if I buy a baby grand piano for $20,000 in the piano dealers stipulates they must deliver and assemble the piano as part of the sale agreement, then I need to cut it is not a choice. --, It is not a choice. It is a condition for sale. If I bought a stove or refrigerator, and of and from an appliance store, and the store allows me to choose delivery or pickup, and I choose to have it delivered, charges not subject to tax begot is it's not a condition of the sale. -- Because it is not a condition of the sale. Todd says should sales-tax be calculated on the amount before, or after a compute -- a coupon or discount? I will answer that one. Coupons are generally issued at no charge by a manufacturer. Or by a retailer. A coupon entitles a purchaser, like an immediate reduction in the price of an item, or even a service where a coupon is presented to a retailer or store. Generally the sales tax treatment, purchases made or items or services obtained, using a coupon that results in a reduced price to the purchaser, is really based on whether the retailer can be reimbursed for the manufacturer, or a third-party for the coupon. There are two types of coupons I want to talk about. The first is a manufacturer's coupon and the second is a retailer's coupon. For manufacturer coupons, the manufacturer or some other third-party will reimburse the retailer for the face value of the coupon. So there is no loss in profit to the retailer. In other words the purchaser uses the coupon like cash and the retailer receives cash when the coupons are redeemed from the manufacturer. The sales price subject to tax is based on the total selling price of the item or service, without subtracting the value of the coupon. The use an example. Say I purchase a taxable item of course for two dollars with a $.50 manufacturer coupon. The amount subject to taxes two dollars. Because in this case the manufacturer of the item will be reimbursed by the retailer, $.50 for the coupon. The second is a retailer coupon. The retailer is reducing the sales price of the item or a service, purchased by an amount equal to the face value of the coupon. Here the retailer reduces his profit on the sale and the value of the coupon is not recovered or received from any other party like in the previous example for manufacturer. This type of coupon is considered a retailer's discount. It is subtracted from the price of the item or service before computing the sales tax. For example, if I purchase again a taxable item at two dollars with a $.50 coupon, I am subject to tax of only $1.50. The retailer reduce the price of the item and will not be reimbursed by any third-party. That is the answer. Okay. The next question comes to us from Adam. Our lawn care services subject to sales? Britney. Okay, mowing, blowing, weed eating, edging, any other related service provided by lawncare would not be subject to tax. These are nontaxable services. The lawn care business should pay tax on items it purchases to provide the services, including Lon Morris, blowers, -- lawnmowers, blowers, any other item. The lawn care service, or landscaping such as planting trees, bushes and flowers, it is performing a real property contract and should not charge tax to a customer. Instead the lawn care business should pay tax on these items when they purchase them. That is correct. All right. Next question comes from Angela. How about sales as of gift cards. I will take this one. Gift cards or gift certificates, are considered cash equivalents. Cash equivalents are like an intangible right that entitles a person to redeem them in the future, to receive tangible personal property or services. Since they are considered to be an intangible right they are not subject to sales tax when they are purchased. Sales tax would apply to the purchase of taxable items or services, when either a gift card or a gift certificate is used. Just like if you were paying with cash, a debit or credit card. Let me use an example to explain more. If I use a $25 gift card to buy a new side a home improvement store, say it cost $150. The gift card is like cash. The person who purchased the gift card and gave it to me, did not pay tax on the gift card. When I use the gift card to buy the saw, again it is like cash. The total amount I pay for the saw you in this case $150, is subject to sales tax. Next question comes from Stephanie. What my business is located in Florida but I am selling to people who do not live in the state and will be shipping to another state? Do I still charge Florida State sales tax? That is a good question Britney I will take it. No, you are not required to charge your customer sales tax. Providing that the customer did not come to your business, and pick up the item in Florida. You would be shipping that item outside the state of Florida, using the U.S. Postal Service or common carrier. So acceptance and delivery, and possession of the property, would take place or transfer outside of the state of Florida, therefore no Florida State tax would be due on that sale to the out-of-state purchaser. All right. We have time for maybe one or two questions. The next question is from Brian. If the county certain checks -- a county surtax expires [indiscernible]. >> I am sorry, can you repeat that? If a county surtax expires December 2018, is it in effect until the 31st or the first of that month? I think it would be in effect through December 31. Of 2018. Okay. The next question, on the subject of resale if I have a local business make T-shirts for me to sell in my business, what I pay tax on the T-shirt, since I am purchasing the T-shirt for resale? No, you would not. Your business would not pay tax on their purchase of the T-shirts. Because we only want the tax one time. There is no pyramiding of tax in Florida. We do not charge tax on tax, if that makes sense. In this case when a business purchases items for resale, like in the webinar where we talked about the trashbag, the trashbags would have been purchased for resale and would not have paid tax on the trashbags when you purchase them for resale. As the business owner of the T-shirt shop, when I buy those T-shirts from my supplier, I do not pay tax on those items because I would charge tax to my customers. You for example [indiscernible- static] [indiscernible] the ultimate consumer and I would charge you tax. Okay. There are so many great questions that were asked today. Those are all the time we have for questions during this Q&A segment. If we did not have a chance to address your question, we encourage you to connect with a -- SCORE mentor . Indicate that on the survey, or go online to . A link to the recording of the session, as well as the presentation slide deck, will be sent in a post event email. We will get that out this afternoon. In just a couple of short hours. On behalf of SCORE , I would like to thank you all so much for attending today's live webinar session. I would like to give a very big thank you to Brittany Alexander and Gary Gray for presenting with us today. Britney and Gary, thank you both so much. You are very welcome. We hope you all have a wonderful day today and we look forward to seeing you next time. Take care. [Event concluded] ................
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