One of my favorite things to do in the world of bookselling is to put our credit card statements in order*. While most of what we buy is purchased on net 30 terms, we find ourselves putting more items on credit cards than we expected. We juggle two credit cards, both of which have rebate programs, but each involves hoops to jump through. The American Express card requires very quick payment, while the Visa necessitates applying for the rebate when we accrue enough points.**
I sort each purchase by category for Amie so she can put the entries in Quickbooks. Almost everything we buy falls in one of two categories--items for resale, and supplies that we purchased in state. The first is tax exempt (because you the consumer pay the tax on it later) and the second already has the tax paid on it. But for the last category, items that are not for resale that we bought from suppliers that don't have a presence in the state, we have to pay use tax (which is pretty much like sales tax). But for some things that don't have a physical component, like dues and subscriptions, there is no use tax to declare. It took a session with our accountant to make sure we had everything correct. This had nothing to do with us, but
So for example, when we bought our new bright red and slate blue steel chairs for our author events (to suppliment the black, gold, gray, and red plastic we already had), we were not able to find a local source that worked for us. Note: if you find a source for steel unpadded (the padding tears) folding chairs in an interesting color, please let me know.
Amie's bookkeeping was put to the test this week, as we had a sales tax audit. We weren't particularly worried, as we've worked very hard to cross all our t's***. But when everybody has more work than they can possibly accomplish, things don't always get filed so quickly. I'm happy to say things were in pretty good shape. We collectively breathe a sigh of relief. Thank you, Amie, and also to Mel, who helped her sort files.
So why am I telling you all this? Firstly, I thought it would be interesting for you to go behind the scenes--hardly any retailers blog about bookkeeping. But also, it's important for you to remember that you also have to pay use tax on out-of-state purchases. So when customers say they like shopping at Amazon because they don't have to pay sales tax, they in fact do have to pay it. Up until now, the declaration was pretty much on the honor system, but our accountant expects to see a large increase in individual tax audits. The state knows there's a lot of money on the table, and it's easier to collect the tax its already due than try to implement a new one, right?
**Don't bother soliciting me for a credit card. We're not in the market.
***If it had gone badly, I wouldn't be talking about it.
Notes From the Kids Staff
1 hour ago