Stupid Tax Question

[Michael Boggan]

This tax stuff is all very new to me. I am trying to figure out the whole sales tax thing and I am lost. If I charge a flat rate of $150.00 including tax, for a sitting fee, how can I figure the sales tax that was paid? Is there a chart or formula or something. Or should I just do it, $150.00 plus tax? Suggestions are most welcome.

Thanks.

[AlexMorse]

x * (1 + taxrate) = 150

so if the tax is 8% You'd have:

x * (1.08) = 150
x = 150/1.08
x = 138.89

[epoh]

ETA: nm. Alex did it for you. :)

[CobyPhoto]

Michael,

Alex gave you the formula to back tax out of a price. I just have a comment about pricing and the way you do it, as far as tax is concerned. Don't even consider tax in your price you quote, just figure it after the fact. You are NOT charning them tax...you are collecting it as required by law. So don't let it affect your pricing structure. Everyone that is in the business has to collect it.

CJ

[boxofrocks]

Originally Posted by CobyPhoto

Michael,

Alex gave you the formula to back tax out of a price. I just have a comment about pricing and the way you do it, as far as tax is concerned. Don't even consider tax in your price you quote, just figure it after the fact. You are NOT charning them tax...you are collecting it as required by law. So don't let it affect your pricing structure. Everyone that is in the business has to collect it.

CJ

True, but sometines it's better to have nice round numbers, like for event sales. I figure out my event prices using a formula like the one above, and raise the round figure until I'm satisfied with my pre-tax figure.

[bondarnes]

The comptroller strongly discourages quoting prices which include sales tax. The only time we do it is for event photography where we want each package to come out even money so we don't have to make a lot of change. So a $ 20.00 pkg is actually $ 18.47 + 8.25% tax. To back the tax out $ 20.00 divided by 1.0825 = 18.47575. We just take the total for the entire event and back the tax out of it. Of course we take tax into consideration when we price our packages and then round UP to the next even dollar.

All other photography is quoted as an amount plus sales tax.

[CobyPhoto]

Tom, Don,

Very true. I agree with the pricing w/tax to eliminate making change. I do alot of school athletic photography and I do this to make the process go quickly and change making fast. It just didn't sound like Michael was in that kind of a situation, since he referenced a sitting fee.

CJ

[boxofrocks]

I'm just pleased to see that someone as good as Don does the same thing I do!

There's a first time for everything, I guess.

[Michael Boggan]

Coby, I actually just used the sitting fee as an example. Here is my situation I am looking at right now. I have an event where I am doing photos at a pumpkin patch. I will charge $5.00 at the time for a single photo of there kid(s) and a simple 4x6 printout from an HP photo printer that I will have there. I would also like to give them the ability to order right there, additional lab prints or packages that will be delivered. I was trying to figure out the whole process from getting there info to ordering the lab prints. Pricing was giving me headache cause I was trying to figure out how to do the sales tax and keep it as simple as possible.

[CaptainTom]

Do your event keeping in mind that you will have to pay the sales tax. If you charge $5.00 per print and sell 140 prints. 5 X 140 = $700 Then, back out the tax using the forumula above. No need to figure it for each sale.

When taking orders for resales, etc. you can do the same thing. Some folks like to quote
price plus sales tax, so the price is a bit lower. The comptroller would like you to charge tax on each sale because the 1/4 cent difference adds up over the long haul.

[csfbphoto]

You can round it and show that tax is included at XX.X%
This way everyone is happy.