I did an order for an assisted living apartment complex, the total was about $120. They will not pay for the order until I provide them a copy of a w-9. I have never had anyone do this, is this common?
Yes, very common. I have schools, hospitals and other large businesses request one all the time.
W-9 are common with buisnesses for large orders had to give one to Ira Toyota recently
I am making the assumption that a W-9 is your business tax number. In Canada the GST number is usually just printed on the customers receipt so the people who need it have it without having to make a special request.
I’ve got a real simple solution to the government funded operations that want a W-9 and expect “Net 90” payment terms.
"I apologize, we cannot offer terms like that, do you have a credit card that you could use for payment instead?
They’ll typically say no, right up until you tell them that you are unable to provide them with your product.
several times a year we get an order from the university extension in our area, and every time it is the same song and dance about Net-90 terms, their first time it took me 8 months to collect, the 2nd time I brought up the outstanding balance, and it was all paid through a card instantly.
They should not need to get this info, but generally the person requesting it is simply acting on a policy where they have no discretion. What the policy makers are concerned about is distinguishing between employees, contractors and other entities. You may also receive a 1099 from them at the end of the year which is a pain because you will have already declared the sales as sales and the 1099 duplicates that record.
Here what the IRS says:
[SIZE=6]Form W-9, Request for Taxpayer Identification Number (TIN) and Certification[/SIZE]
Use this form to provide your correct TIN to the person who is required to file an information return with the IRS to report, for example, income paid to you, real estate transactions, mortgage interest you paid, acquisition or abandonment of secured property, cancellation of debt, or contributions you made to an IRA.
Clearly, this does not apply because the payment to you is not INCOME that needs to be reported to the IRS, it is a purchase but I have had very little luck convincing the people asking that this is the case.
If they make payments to a vendor of $600.00 or more, they are required to have a W-9 on file so they can issue the 1099 at the end of the year if required. Without the W-9, they don’t know and have no record of whether or not you need a 1099 so they get it up front to be certain. Just keep a completed copy on hand for those that request one.
We’re set up to accept charges from university purchase orders, the university foundation, student organization accounts, the hospital, local government, a few churches, and some area businesses. They all tend to be larger orders and it can be very lucrative if you’re able to manage your cash flow accordingly. Offering terms is how big business gets done, you might be missing out on a lot of sales by not accepting such orders.
[SIZE=3]Good explanation of who needs to fill out a W9: http://www.irs.com/articles/fill-out-irs-tax-form-w-9[/SIZE]
[SIZE=3]The purpose is to correctly identify persons or entities that will have to have income reported via 1099 and possibly backup withholding of taxes. It is not required of entities operating at corporations. If it was, we would all have to get them Sysco, USfood, Pepsi etc etc etc.
If you are operating as a corporation and being paid as a corporation you should not have to fill these out… but with that said some places are going to insist on it. I generally respond with my Fed Tax ID number and copy of my sales tax license along with a note firmly stating that NO 1099 should be issued for pizza purchased from my business. It is all absurd anyway since all the employees of the company requesting the forms are turning in expense reports with restaurant meals on them and they are not contacting all those restaurants asking for w9 forms![/SIZE]