In the past, the biggest risk associated with a sales tax miscalculation was a visit from an auditor and a lengthy refund and penalty process. While painful, it was relatively simple and predictable. Today, increased consumer awareness and constantly changing tax codes have made miscalculating sales tax far more risky, with a simple mistake sometimes leading to a business owner on the wrong side of a class action lawsuit.
Papa John’s recently reached a tentative deal to settle a class-action suit in Florida for allegedly illegally charging sales taxes on delivery fees. In Florida, the delivery charge for pizza is not taxable if there was the option to pick it up in the store. And what if you order pizza for delivery and you use a coupon? How will you be taxed?
Depending on where you live and whether you are using a manufacturer’s coupon or the retailer’s coupon determines if you will be taxed pre-or post coupon application. In California, for example, with a manufacturer’s coupon you will pay tax on the full price of the item, but with the retailer’s coupon you pay tax on the reduced cost of the item.
Keeping track of the ins and outs of today’s sales tax calculations can be overwhelming. The rules constantly change, and an honest mistake can lead to devastating costs. Vertex Inc's sales and use tax solution stays up-to-date on the latest sales tax changes and saves you time, money, and worry.
For the full article, please click here.