Post # 1
Hello Bee’s –
I just got an email from our videographer that says, “I hope you’re doing well. I just wanted to update you about the sales tax (6%) being imposed by my accountant for the year of 2014. Please feel free to read the attached invoice for more updated final cost which includes the sales tax. Let me know if you have any questions or concerns.”
Ugh, what? Is this legal? I’m so confused. Please help!
Post # 3
@Meant2Bee: What is your state’s sales tax rate?
Legally, he has to charge you the current state sales tax. If it changes after you sign a contract but before you pay for services, he has to charge you the new rate. He doesn’t make up a sales tax rate; it’s set by your state.
ETA: If services will be occurring in 2014 when the new sales tax will be implemented, he has to charge you that new rate because thats when services will be rendored.
Post # 4
Double-check the state’s sales tax rate and make sure they match.
If they do, he’s within his rights to change it as the state charges tax when monies are exchanged (like when he gets paid) not when you sign the contract.
Sucks, but it’s not the end of the world!
Post # 5
They have to charge you whatever state tax is.. look into how much your state tax is.
Ours here is 7%.
Post # 6
This stinks! I live in VA so it must have increased from 5.5% to 6%. The issue with this vendor is he never put the sales tax in the inital quote that we agreed on.
Post # 7
As long as he is charging you the amount mandated by your state/county then it is legal. If the state amount is 5% and he is charging you 6%, then you have an issue.
Also, some places don’t charge you sales tax and just work it into the price. My photographer charged us the full amount minus 7% and then 7% tax, so it all worked out to be the same price in the end, but they were indeed charging me tax.
Post # 8
@Meant2Bee: He probably just assumed that you knew you would have to pay tax on the services :/
Post # 9
Most videographers/photographers being self employed, will pay estimated quarterly taxes each year. Sounds like his accountant has given him his estimated taxes for next year and now he’s passing this on to you. He should’ve included the sales tax in the original contract, but it still has to be paid, regardless. This makes me want to check in with mine… hm.
Post # 10
I agree with the prior posters. The amount charged for sales tax would have to reflect the rate of tax in place in that jurisdiction at the time payment is made.
Post # 11
If the state sales tax changes, they have to charge you the current rate. I would double check to see whether that applies to the whole thing, or just to whatever has not been paid yet (I think it would be on the entire cost, but I’m not sure). On most of my contracts, it says something like “estimated or expected sales tax” because they won’t be 100% sure what it is until we pay the final deposit.
Post # 12
@Meant2Bee: Yikes! Well it’s a good thing he did now – tax can take up a big chunk of your budget!
Our taxes are included in our per person price… re-read your contract carefully and make sure that it wasn’t originally “tucked in” to your overall cost.
Post # 13
@CakeyP: It’s completely covered in our reception budget. But this is our videographer only who didn’t include it.
Post # 14
by law, they can change your sales tax. especially if there was an increase by your state. its your obligation to pay sales tax on services, it’s his to pay that tax to the state. he doesn’t want to pay out of his own pocket for that difference. who does, really? so as a business owner, he has to charge you the increase for his 2014 rates. Sorry. ask any accountant in your area, they will agree with that.
eta: if you already paid the 5.5%, you should only have to pay the difference of .5% increase, i believe, double check on that.