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Sales Tax on delivery charge

B

bigbobspizza

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Sold my business last march and Michigan Dept of Treasury is now auditing my sales for any unpaid sales tax. They have informed me, much to my bookkeeper and accountants surprise that I owe for sales tax on delivery fees. Anybody else aware of this? Also on a side note the treasury is readjusting my taxable sales figures for the last 4 years not allowing for any untaxable sales, like bottle pop, water, juices, take and bakes. Fifteen years of reporting every dime I made and paying all taxes on time and this is the thanks i get for it.
 
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I have a simple solution to that situation. I charge tax on everything. If the purchaser is tax exempt on anything they can put in a claim for a refund. That way I will not get caught in the end.
 
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In our state (South Carolina) the FAQ in the sales tax guide specifically calls out delivery fee for food as a taxable item considering it part of the sale of food, rather than a service because services, for the most part are not taxed.

If they are going to put a hurting on you, you may want to check with your accountant. I don’t know about accountants, but many professionals are insured against errors they make. If your accountant gave you incorrect professional advice that resulted in you being penalized, he/she may be able to pass penalties and interest off to the insurer.
 
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State of Colorado does not charge tax on Delivery Charges but one of my cities does so I had a seperate sales tax for deliveries in that store when I had a delivery fee.

I round up and over pay a few bucks every time just to build up a “what if” fund.
 
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Have i got this right for USA.

A Pizza might have tax applied, but a bottle of water not. And depending on what state your in, delivery might be taxable or not?

Mark
 
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Mark, you have it correct. Every state, city, and/or county, can tax as they decide, whether by the governing body or by vote of the people. It makes life interesting, to say the least, especially when near a state line border where one state has much lower taxes on some things than the other. For instance, in the Kansas City Missouri area, Kansas has a tax on gasoline about 10 cents higher than Missouri. But, for a long time Kansas had lower sales tax. In the St Louis area, Illinois has a gas tax about 18 cents higher, from what I can tell.
What a country! :lol: :?:
 
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Well, liquor has both a liquor tax (federal, sometimes state and/or local) and sales tax, and tobacco products similarly. Food, generally not, although some places have differing tax rates for prepared food or groceries.
 
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