Tax help. We own a small business and we realized last year our business is state tax exempt due to the product we sell. Since 2023 we’ve paid $1000 in this tax that we shouldn’t have. And owe $400 for last year that we haven’t paid yet. Our product is for home consumption and we get paid through stripe and Venmo and never charged tax. They’re saying to amend the returns and receive a refund we would have to refund each customer that paid us because tax is their responsibility not ours so even though we didn’t charge them tax “it was included” according to them although we saw it as us just paying the tax and not the consumer. They’re saying we will still have to pay the $400 we owe even though we’re exempt…. We’re not sure who we could even go to for help at this point. If you have any ideas or thoughts please let me know! We really appreciate any help. We don’t care so much about the refund because we didn’t know that was money we could even get back, but it seems an awful lot like stealing for them to still say we owe the $400.
State saying we can’t file an amendment and get refund for being exempt
byu/Ashley052518 intax
Posted by Ashley052518
4 Comments
That is how sales tax works. You collect it from the customer on behalf of the state. Even if the sales tax is included in the price. You either need to pay that $400 to the state or refund it to your customers. Because it’s not your money, it is the customer’s money.
Sounds like it might be a good idea to consult a tax professional or CPA. Is the ‘they’ your referring to the state and are they saying you HAVE to amend and refile or are they saying IF you want to do that then you have to go to the customers? Out of curiosity, what state is this?
You would not be exempt from charging the tax. Thats not how it works at all. The product is either tangible personalnproperty sold to an exempt customer or its tangible personal property that is taxable.
What type of items are you selling?