Can vendors change your state tax price in your contract?

posted 3 years ago in Money
Post # 3
Member
2150 posts
Buzzing bee

@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
Member
2562 posts
Sugar bee
  • Wedding: March 2014

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
Hostess
8680 posts
Bumble Beekeeper
  • Wedding: October 2014

They have to charge you whatever state tax is.. look into how much your state tax is.

Ours here is 7%.

Post # 7
Member
965 posts
Busy bee
  • Wedding: January 2014

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
Member
2150 posts
Buzzing bee

@Meant2Bee:  He probably just assumed that you knew you would have to pay tax on the services :/

Post # 9
Member
3756 posts
Honey bee
  • Wedding: April 2014

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
Member
10986 posts
Sugar Beekeeper
  • Wedding: May 2009

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
Member
2657 posts
Sugar bee

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
Member
2562 posts
Sugar bee
  • Wedding: March 2014

@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 # 14
Member
1287 posts
Bumble bee

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.

 

 

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