Resale certificate

[bobbin]

I received notification that my resale certificate would be revoked in January '14 for failure to meet minimum sales requirements.  Huh? cold sweat... panic about what that would mean for purchasing supplies.  I called the number of the revenue service and received a pretty frosty response and a couple of "stories" that were intended to tell me something (but evaded my panic clouded brain).  He finally asked me about the nature my business; and realized that an income statement for the year would make all manifest.  I supplied it, all was resolved, and I now know what figures to enter on what line of the e-file form to avoid this in the future. 

Moral of the story? just because you enter the figures properly doesn't necessarily mean that all the branches of the bureaucracy understand the information!  And just because you get a form letter that scares you doesn't mean there isn't an easy solution!

[sofadoc]

It never occurred to me that there is a minimum sales requirement. But I guess that keeps all the lemonade stands off the books.

[bobbin]

I didn't think that either!  But once the Rev. officer understood that I do a lot "contract work" and taxable materials were taxed by the contractors he began to have an inkling of my position.  And that's where the good ol' income statement came in.  As soon as I supplied it, he knew exactly how to help me.  And I now know what figures to plug into what line to avoid this in the future. 

What struck me, however, was the tone of skepticism I received during my initial call (Wednesday afternoon).  I "get" that a Rev. guy's job is to be skeptical, but it sure makes things harder for "green" business owners to encounter that right off the bat.  When we finished with the income statement (Thursday morning) I commented on that to him.  He replied that he'd thought about it too after we'd concluded the first call.  I am a reasonably organized person, and when he asked for gross sales I knew where to look and had 3 to demonstrate the variations in business from "busy" to "slow".  As Hammer. always says, don't get behind in your bookkeeping. 

[sofadoc]

I'm sure it varies from state to state. But what exactly would the consequences be if your resale certificate WAS revoked? There are so many online suppliers now that don't give a hoot 'n hell who they sell to.

I guess I still have a resale certificate on file somewhere in Austin. But I haven't laid eyes on a hard copy of one in over 20 years. I go online quarterly, and pay the sales tax that I collect.

I can't remember any of my wholesale suppliers ever demanding that I produce one.

I've had years in the past where I worked almost exclusively for decorators, so I reported very little sales tax collected. But those nice people at the state capitol were still more than happy to accept my payments (albeit small).

[bobbin]

Perhaps I am too nervous about the "technicalities", Sofa., but my greatest concern was that my ability to purchase supplies/make rare fabric sales, but mostly foam sales would have been cut off.  As a "new" business this sort of thing worries me more than it may the "seasoned veterans".  But in stagnant economic times it's best not to tempt fate or "skate" the rules!

[Mike]

ive had time bobbin when I was charged taxes by suppliers to find out they didn't hasve a current copy of my new certificate . so I would say you would just have to pay the tax. my concern would be that the county wouldn't let me operate legally. , years back I had a in ground pool installed I they didn't charge me tax stating that they already paid the tax,  which bring me to a topic mentioned here that service is not taxed. if its a sevice repair no tax unless something as id parts  are used then theres a tax.   I don't think you could break down you bill to $1000 material that would be taxed and $3000 labor untaxed on a job I believe it has to be the cost of the job taxed

[JuneC]

Mike, I'm pretty sure in Florida only "professional" services are untaxed (lawyers, doctors, accountants).  General service (lawn maintenance, painting, etc.) is taxed.  But FL doesn't revoke a resale certificate.  They change the filing frequency.  If you have a "hobby" business, pretty sure you only have to file once a year.  Starter businesses (like me my first few years) file and pay once a quarter.  Once your collected sales tax due passes $2400 a year then you have to file and pay monthly.  Makes perfect sense to me. 

June