Bookkeeping News// UP TO DATE BOOKKEEPING AND ACCOUNTING INFO

Bookkeeping Services Providers Adjust for Sales Tax Holidays

Bookkeeping & Holiday Sales Tax

All across the country, back-to-school sales tax holidays have already taken place, are in

progress now or are on the horizon. While these tax holidays offer parents of school age

children significant savings on clothing, electronics and school supplies, they can be a headache

for in-house bookkeepers and bookkeeping services providers. While the task of collecting and

reporting sales tax is already a complex tax for businesses that have retail sales, the back-to-

school tax holidays add a whole new layer of complexity.

This year, 16 states that normally charge a sales tax are offering sales tax breaks on certain

items that are related to returning to school. In addition to these temporary tax breaks, several

states do not have a state sales tax in the first place and a couple of others already exempt

certain items that appear on most tax holiday lists. Some of the items that are commonly

exempt from sales tax on certain dates preceding the opening of school are clothing, shoes,

school supplies, art supplies, instructional materials, computers and some other electronic

equipment. Within these categories, most states put a ceiling on the maximum dollar amount

that can be spent on each individual item. Louisiana’s tax holiday goes beyond this to exempt

from sales tax almost every item that is purchased for non-business use for less than $2500 per

item. Even if an item costs more than $2500, sales tax is only charged on the amount in excess

of the per-item ceiling.

While the sales tax holidays offer significant savings to consumers who are projected to spend

over $600 per family to get kids ready for school this year, they add a whole new layer of

difficulty to sales tax collecting and reporting. Even outside of the back-to-school tax holidays,

sales tax reporting and compliance is a major task for bookkeepers and bookkeeping services

providers serving retail businesses. These businesses must apply for permits in any jurisdictions

where sales are made and then collect sales taxes according to the current set rates. This job is

complicated by the fact that rates may vary according to the service or item sold and may often

be reduced by such things as rebates, returns, discounts, service costs and transportation

charges. In addition, to tracking sales tax collection, bookkeepers must keep the businesses

they serve sales tax compliant by making all required sales tax payments and filing the

necessary sales tax returns.

All of this emphasizes that fact that sales tax services is a major function of bookkeepers and

bookkeeping services providers that serve businesses with a retail arm. Not only does it involve

taking into account varying rates for different jurisdictions but also must take into account

different rates for different items or services. Keeping up with all of these variations is a

complicated and involved task in itself. Add, on top of this, all of the sales tax exemptions and

variations that come with back-to-school sales tax holidays and the sales tax functions of

certain company bookkeepers becomes even greater!

If your business is seeking an outsourced bookkeeping solution, the experienced professionals at Orange

County Bookkeeping can provide you with the expertise you are looking for. Our licensed accountants

and bookkeepers are equipped to serve Orange County businesses of any size, structure or industry

focus. Visit us today at www.ocbookkeeping.com to learn more about our full range of bookkeeping, tax

and business consulting services. Contact us by phone at (949) 242-9852 at or by email at

info@ocbookkeeping.com to receive a free, no obligation consultation.