The Tax Man Cometh!

 

I’ve been having a little issue with regards to misnomers about sales taxes and tax exempt numbers that has been bothering me.  When I’m working at a show there is rarely enough time to explain to shoppers who may be misusing their state tax exempt number why this is not only illegal, but also harmful to their state.
Plus, who wants to hear a vendor lecture you when you’re just trying to buy some beads? 

But, I feel the time has come where I need to speak my mind because I truly think that most people don’t fully understand the concept of a tax exempt number.  And my own personal experiences with the State Board of Equalization (BOE) over these past 30+ years hasn’t done much to help me learn about them either.  I had to do research and speak with numerous BOE employees, CPA’s and assorted tax gurus to gather my facts.
As a business owner I feel it is my responsibility to educate myself on how taxes are to be collected, repaid and dispersed.

Let me start by pointing out a few key points:

A tax exempt number does not automatically qualify you to purchase “wholesale”.   “Wholesale” in its true meaning is that you are purchasing in a larger quantity to then break down into a smaller quantity for resale.  The wholesale pricing structure is to allow for each handler to make a profit during the sale. 

A vendor may opt to give you a discount along with not charging you tax when you present your tax exempt number but they are not obligated to do so. 
They are also not obligated to accept the use of your tax exempt number.  A seller, at their own discretion, may opt to charge you tax regardless of your exempt status. 
They may also set a dollar amount you are required to reach before they will accept the use of your tax exempt number.  Keep in mind there is additional paperwork that needs to be kept track of and filed for a tax exempt sale, so the extra work for the seller deserves a sale in a dollar amount that justifies that.
When you’re at a show and the vendor is not charging you tax regardless of your tax exempt status they are breaking the law and depriving your local economy of much needed funds. 

A tax exempt number is issued by your states BOE and when you signed the agreement with them you agreed that if you did not pay tax on your purchase of goods that you would then either collect sales tax when you resold the goods, or the item created from the goods, or you would in turn also collect a tax exempt number.  Eventually at some point down the line the sales of goods needs to have taxes applied to it. 
The purpose of the above is to avoid double taxation on a commodity, however, many times I hear people make comments that lead me to believe that they think the number just excludes them from having to pay sales tax.  That would certainly make us pretty special if we just got a little number that said we no longer had to abide by the law.

I also witness, on more occasions than I care to admit, people “sharing” their tax exempt number with their friends.  Now don’t get me wrong….it is your prerogative if you’d like to break the law, but as a seller I have also agreed when I accepted possession of my tax exempt number from the BOE to conduct business that I would willing report any fraudulent usage I may encounter of another tax exempt number holder to the BOE.  In other words, if I know you are committing fraud, I am supposed to turn you in!

It is one thing if you are a designer and you bring “buyers” to a show with you and they are shopping for your company.  But if your friend just wants to avoid paying tax?  That’s illegal and is subject to massive penalties, fines, interest and also qualifies for jail time.  If you are ever audited (horrid ordeal with this government office!) they will require you show proof of every single one of those purchases and if you cannot it is a horrible outcome.  They can seize your cashbox, register or whatever other item you may have been using to conduct business.  They can lock and bolt the doors to your business.  Put a lien on anything of value you may own including taking your home.  And yes, sadly, I have witnessed just that take place with someone very close to me.

What are those sale tax dollars for anyway?  Well, they are used by each state in varying degrees for things like maintaining your roadways, improving your schools and the level of education given at said schools, providing for government agencies such as your local police, fire and emergency response services plus much more.  You can find out how your local sales tax dollars are used in your city, county and state by contacting them or googling for the information.

So really do any of us have a right to try and avoid paying taxes to help support those systems? 
I agree there should not be double taxation on an item, but if you are using your tax exempt number and then making your girlfriend a pair of earrings, by law you are supposed to declare that percentage of your sale on your tax forms when you file them and pay the appropriately due taxes at that time if you did not pay them at the time of purchase.
Or if you do sell the wares you have made from your tax exempt purchases you are required to collect the appropriate sales taxes at the location where you are making the sale, or you also need to collect and keep a copy of that persons tax exempt number.

Tax exempt numbers in many cases do not apply to goods such as tools, books or kits.  The reason being is that you will not be reselling these items but will be using them yourself.  If the vendor did not charge you tax on them during the time of purchase you are legally obligated to declare them when you file your sales tax.

Just as there is a line available on your sales tax form for declaring product you purchased and did not originally pay tax on but have used for personal means, there is also a line if you paid tax on the goods and then resold them.  You are eligible to have that amount of tax refunded back to you.

Finally, it should be understood that sales tax amounts (or the percentage of the total sale of the goods) is based on the location where the sale took place.  So regardless if you are from another country or from a state that does have sales tax, if you are standing in a city, county, state, country that does collect sales tax you are required to pay that amount.  You are not exempt just because your state doesn’t collect them.  You know the saying, “When in Rome”?  It applies in this instance.

I think I’ve covered some of the major points that have been irking me.  And let me clarify that they don’t just irk me because I am a business owner.  I agreed when I went into business to deal with the mounds of paperwork…it comes with the job.  You should know that the part that irks me the most is people’s neglect and willingness to pay taxes for meaningful needs.  You don’t get to complain about the lack of education your state offers if you are one of those people who aren’t properly paying your sales tax.  You don’t get to complain about the potholes in your roads, or how the divider lines are so worn out you can barely see which lane you’re supposed to be in.  You don’t get to complain that there is never a police officer around when you see someone driving like an idiot or texting in their car and risking lives.  You don’t get to complain that there are not enough mental health facilities available to help deal with the ever growing population of homeless people on our streets.  You don’t get to complain about any of the services that your sales tax dollars would pay for if you are one of the peeps I’ve described above.  

Edit Addition - As my BFF and one of my biggest competitors Betcey pointed out in the comments, tax exempt/resale numbers are industry specific.  When you applied for the number you had to tell them what you would be buying/selling.  This in turn means that just because you have a number that allows you purchase beads/jewelry supplies at a tax exempt status, it does not give you the right to purchase landscaping supplies, cosmetics, cars, etc.  So if you present a tax exempt number for Joe's Plumbing Service to buy beads you are also breaking the law. 

If they weren't industry specific we'd all be able to walk onto any car lot and buy a car sans sales taxes.  But you better believe the car dealership is not going to risk their business by allowing you to do that.  Sadly, because most of our out of state numbers are presented at trade shows, we have no way of really knowing if you're using the correctly issued number or not.  It falls on you to be honest about it.  And it will fall heavily on you should the BOE audit you.

My intent with this post was not to tick people off but to hopefully share a little of what I’ve learned in regards to tax exempt numbers.  I don’t have all the answers, but I do know that none of us like the thought of having to pay taxes of any kind…but I think we would like our world much less if we had no schools, no police, no fire departments, no laws, right?

Let’s all help each other out by being socially responsible tax payers and do the right thing!

With respect,

Beki

Happy New You!

In with the new – out with the old!

What is the significance of a new year?  I guess that question is pretty pointless…it’s like asking, *What is the meaning of time?*  It’s all relevant really and means what it means personally to each of us.   We’ve come to learn the significance of the changing of a year from some long ago archaic calendar that told us this is such-n-such date and with the ticking of this clock, the dropping of a glittery ball, a kiss, a joyous celebration that people from every corner of the world will welcome in a New Year!  It is the chance to start again.  To leave behind what wasn’t pleasant and try again with the next 365 days awaiting us all in an effort to “make it better”? 

But why do we wait for that date?  For that time to make a change?  What is the poignancy of it?  Is it just because that’s what we’ve always done?  Or maybe we need the push of all those other minds to help us along our newly chosen path?  Are we just so programmed to a time schedule that we need the significance of that clock ticking over to 12:01 – 2014, 2015, 20…. To force us into being better people?  Thinner, healthier, more mindful, more career driven, stop smoking, more giving, less angry, less snarky, more open minded, more productive, a cleaner house, more books read, another pet, more schooling, finish those UFO’s , this is the year that I’ll apologize to and move on with my life, I resolve to be…..perfect in every way! 

 

Wow….we certainly put a lot of pressure on ourselves to perform.  All with the ticking of a clock. 

I’ve had a few moments in my life over the past 4 or 5 years that have pointed me in a direction where I feel I need to be more compassionate.  I want to be that person.  I think by nature I already have most of what it takes to be a compassionate person.  With age and maturity I am learning to recognize when I am not and to be mindful of it so I can stop myself (most times) from being non-compassionate.  It is a goal for sure.  And maybe in this lifetime I’ll learn to be that person I  

strive to be.

I didn’t wait for 12:01 on the clock to start being more aware of my compassion.  I just started right that moment when I felt I needed to do it.  I don’t even really know when that was.  I guess it was at the right time, though. 

I’m hoping I can just learn to do other things in my life when the time is right.  So, this year I am going to resolve to not resolve to put any pressure on myself to perform.  I’m not going to berate myself for being overweight, or not as active as I should be, or my studio messier than I’d like it to be.  I’m not going to assume that I’ll do things better, or try to be more of this and less of that.  I’m not going to stress myself out with a set number of beaded items to design within a set number of days. 

I’m just going to live my life.  If on January 1^st at 12:01 am, 2014 I decide to join a gym, so be it.  But I’m not going to force myself into it.  I’m going to practice my need to be a more compassionate person on myself and I’m going to give me a break, give me time, give me no pressure to perform.  Maybe if I don’t feel pressured I’ll actually get those dreams and wishes accomplished or at least start them on their way to becoming reality.

Wanna join me in resolving to not resolve?  To not pressure yourself into being thinner, cleaner, nicer, healthier, whatever it is you’re setting a stop watch for?  How about we just start treating ourselves with the respect we deserve the moment we think about it, rather than at 12:01am! 

 

 Every single day of our lives is an opportunity to make a change in ourselves.  We should learn to do it right at that very moment and not put it off waiting for some glittery ball to drop!  

Reflecting on retail

My mind, in it’s sometimes (okay, most of the time) racing fashion, woke me up very early this morning.  Usually when that happens it is because I have a lot to do (true), or because I have a flood of beady ideas that won’t let me rest (true), or sometimes it is just hormones wreaking havoc on my mind (sigh…true).  But this morning when I woke up my mind was reflecting back on yesterday.  Spinning through the myriad of encounters I had with people.  Being in retail increases my odds of that, but yesterday was particularly interesting.

We had a very busy Cyber Monday sale, which translates to a very busy week trying to catch up, which in turn translates to a TON of human interaction.  For the most part everyone was happy, excited, thankful, and anticipatory.  Feelings that translate back to me as joy.  Then a few were frustrated, angry, unnerved.  Feelings that I absorb and cause anxiety for me.  I want them all to be in that first group….I want every single one of my customers to be happy.  (Impossibility, I know…but a girl can dream!).  And then there were a handful who are just unhappy souls.  They have some need to take out their aggression, their angst, their all-encompassing anger on whomever they come into contact with.  At first I absorb this and become overwhelmed by it, I feel the anger and I relate to it.  It exhausts me.  But then within a short amount of time I begin to feel empathy.  What a horrible place in your mind to be living in.  Why are you there?  Can you help it?  Have you tried?  Has it become so commonplace for you that you aren’t even aware of how it spills out onto others? 

I have no answers.  I don’t imagine even the most experienced psychologist has the answers.  And I am not sure even the person experiencing this type of behavior has the answers for themselves either.  And that brings me right back around to feeling sad for those folks who take their anger out on whomever they happen to encounter as their day progresses. 

Don’t get me wrong…I am most certainly not forgiving their behavior or giving them license to behave however or in whatever way they feel.  They still should be held accountable for their actions.  But instead of being angry right back at them, my anger dissolves fairly quickly and I just feel sorry for them.

At work yesterday we had people hang up on us, be extremely passive-aggressive, be blatantly rude, demanding, snarky.  Basically they spewed whatever angst they carry in their lives onto us….all over some beads.  That, my friends, is just sad.

But for every hang up, or rude comment, or demeaning comment there were ten or more that were beautiful, kind, encouraging, happy.  And while it is, for some strange reason, harder to focus on those positive feelings - they are what I need to hang on to.  They are what see me through a tough retail day.  A smile, a thank you, an excited customer is the proverbial wind beneath my wings. 

What heals me after a rough day of retail - brings it all back into focus - are two things I remind myself of. 
One is a quote I have above my computer on my shelf of “Things I love” 

It is a quote of compassion from the Dalai Lama and says:

"I have found that the greatest degree of inner tranquility comes from the development of love and compassion.  The more we care for the happiness of others, the greater is our own sense of well-being. Cultivating a close, warmhearted feeling for others automatically puts the mind at ease. It is the ultimate source of success in life.” 

~ Dalai Lama

It is not easy to remember, but it feels good when I try.

The other thing I remind myself of is a video I saw of Carl Sagan and that we are nothing more than a Pale Blue Dot. (Take 3 minutes out of your day and go watch it...seriously...I'll wait here...GO!)  When I get lost in my thoughts, I’ll watch this video and it slams home just how minuscule we actually are in the scheme of things.  Something about that reminds me to work hard every single day to treat others with kindness and respect, regardless of how they may be treating me.  

I am sure this is a lesson I will need to practice all my life.  I still don’t fully understand it and I most certainly veer off track frequently.  But it is who I want to be.  I want to always be compassionate.

And now…I must get ready to take on another day of retail. 

Happy Thanksgiving!

I’ve been dealing with a major funk the past few weeks.  Not a normal depression type funk where I don’t feel like doing anything at all – but more of a muse on vacation type of funk.  No beading, no knittting, no coloring, no Zentangles, and only cooking what is necessary to feed us.  I couldn’t figure out why I was just feeling so void of any inspiration.  I mean, I’d just done a bead show and that usually fires up the muse into overdrive.  I’d taught two full classes, which is also a major muse fuel stream.  What could possibly be wrong with me?

I took my complaint to a group of my fellow beady teachers and the wise, and still very young, but amazingly astute Melissa Shippee solved my issue by saying, “sometimes when it's the time of year something big and bad has happened to you in the past, it's like a grief anniversary”.  She could not have been any more correct!

17 years ago today my Mom passed away.  It was also the day before Thanksgiving that year.  I was only 35 with 4 small kids and Shawn had already lost both of his parents and my Daddy had been gone for over 6 years.  I felt so lost.

But there really wasn’t a lot of time to grieve.  With 4 young kids I needed to get my act together.  My Mom told me a few days before she passed to not let this event ruin the holidays for my kids.  She made me promise to always make it a special time for them so they had the same joyous holiday season as she always tried to give to me.  I’ve worked really hard at that, but I’m wondering – now that they’re all grown am I finally beginning to grieve the holiday instead of celebrate it?  I sure hope not!  Maybe I just need to learn to recognize when that funk is coming on, face it head on and accept it. 

Shawn reminded me to just slow down and enjoy the process of getting ready for Thanksgiving by sharing what I see, smell, taste, and experience with my Mom. Let her enjoy it again through my eyes.  So I’ve been trying to do that these past few days and I’m thinking it has worked a bit to help me enjoy everything I need to do to prepare a great meal and make a nice home for my family to spend together tomorrow.  Which is exactly what my Mom used to do.  It made her feel good to do all these things and I want it to make me feel good again, too.

I’ll close by sharing a special story about my Mom’s passing.  I am the youngest of 5 and was always introduced as “the baby”.  Even after having 4 kids of my own!  LOL
My Mom was diagnosed with cancer (breast) the first time when I was 12.  She said she would just pray to live long enough to see me raised. She also told everyone “I don’t want the baby to see me die”.  Amazing how a Mother’s first concern is how her child will be affected. 
The following year they found the cancer in her other breast and removed that one as well.
 5-6 years later she was diagnosed with lung cancer.  She prayed again to live long enough to see me get on my own feet. 
5-6 years later she was diagnosed with another type of cancer, a tumor in her jaw area that had two types of cancer.  One that could go to her brain and one that could affect her internal organs.  She prayed to live long enough to see me settled down with a family. 
 

After 23 years of surviving all these hits from the insidious cancer she was diagnosed with liver cancer.  Sadly, she had no more prayers for survival.  She was just ready to go. 
 

Hospice came and helped us get her comfortable at home.  She quickly went into a coma.  All of her kids would take turns sitting with her and caring for her.  On the night of her death I had spent a couple of hours telling her some stories about my kids, than it was Sharon’s turn to sit with her.  I sat down across from her on the couch and listened to Sharon praying with her.  I watched the curtains gently blowing in the window.  Moments later one of my other sisters was waking me up letting me know that Mom had passed.  How could that be?  I was just looking at her seconds ago?
She had gotten her wish!  Don’t let the baby see me die.  And so I had not. 

Even in her passing she looked out for me.  And even now, 17 years later I can feel her sitting here with me reminding me how much I have left to do before tomorrow.  So I better get in the kitchen and get busy….I’ve got a huge family coming to enjoy Thanksgiving Day!

Thanks Mom!