| by Nancy Staton Jean was furious. She had bought her business almost three years earlier. Keeping it going and improving sales had been a struggle. Five months ago, she received a letter from the State of Georgia Department of Revenue, Sales and Use Tax Division. They were going to do an audit of sales for purposes of determining the accuracy of the record keeping and sales tax returns for her business. But Jean had a good bookkeeper and did not worry about the pending audit. The auditors came on a Monday and left on Wednesday the same week: three days to turn Jean's world into chaos. The audit had turned up some major errors in the way in which sales taxes were collected and reported by this company. She had actually overpaid the taxes. Jean applied for a refund, but was furious because the letter from the State had denied her refund request. It seems that the time for requesting a refund had expired. How had this happened to her business? First, Jean never should have assumed that the bookkeeper was correctly preparing the tax returns. The full responsibility for tax compliance rests with the business owner. Jean should have checked with a CPA or the Georgia Department of Revenue, Sales and Use Tax Division to confirm that her business was using the appropriate procedures. It turns out that the original request for a sales and use tax identification number that had been requested for this business was incorrect. That mistake resulted in improper collection procedures. Secondly, Jean did not take the time to understand what collecting and submitting sales taxes meant. She thought she just paid sales tax on all sales, and in her county it was 6 percent—4 percent for the state and 2 percent for the county. But it was not so simple. Her business acts as a collection agent and remits the collected money to the state. This process puts the business and its owner in the position of being a trustee of public money. Collected sales tax is never an amount of money that belongs to the business, except for a small percentage that is paid to the business as the collection agent if it remits on time. Also, the business owner, as a trustee of public money, becomes personally liable for any deficiencies not remitted. In this case Jean did not have a deficiency. She had over collected. Collected sales tax did not belong to the business or to Jean. Hannover ofertas de alojamientoThird, Jean did not understand the status of her business as to the collection of sales tax. Each business must declare its status on the original application for a sales tax identification number. There is a difference in how businesses collect sales taxes based on the kind of business: retail, wholesale, construction, trade, or manufacturer. Collection and reporting must be consistent with the type of business. Jean assumed that her fence business reported the same as a retail business. She sold and installed all kinds of fencing, residential and commercial. What should Jean do now? Jean could fuel her fury by submitting an appeal on the ruling. She might win, but it would take an enormous amount of time and energy. Or Jean could cool her fury, consider this an expensive lesson learned, and move on with her business. She can recover what she considers lost money more quickly by getting on with business. She does have a good business and, based on this experience, she has established good procedures for all the record keeping aspects of her business. Jean has a better business because of this experience. I hope your name is not Jean! But if it is or you think that you need help in getting taxes straight for your business, call the local SBDC consultant near you. > discount hotels in SpaFor more resources, see: Legal, Regulatory & Taxes | 
