Change in Sales Tax Laws: Sept. 1

[CobyPhoto]

Just thought those whose collect State Sales Tax might want to be aware that there is a change in the law as of Sept. 1, 2007. House Bill 142 changes the collection rates based on the location of the business rather than the point of delivery of the service or product, for transit sales and use tax. For most Texas Businesses, this means they will be collecting 8.25% Sales/Use Tax across the board, no matter the point of delivery.

Before this, you were required to collect only the 6.25% State Sales tax and City Use/sales tax if your product or service was shipped o9r delivered out of the confines of the ATD/CTA/MTA's jurisdiction.

For most photographers, this will have no affect, unless you shipped alot of your product out of ATD/CTA/MTA's jurisdictions.

This only affects products and services shipped or delivered in the State of Texas.

If you had questions before, about the correct rate, you shouldn't now...across the board (only a very few exceptions) will be collecting 8.25% Sales/Use Tax after September 1, 2007, in the State of Texas.

CJ

[Steelsun]

Thanks for the heads up, it simplifies things alot.

As an FYI for everyone, much of the various occupation codes changed also spetember 1, so if you are in an occupation that has lots of rules, you might want to check it out. I know mine (licensed private investigator) had a few, and many were logical!

[JohnT]

Just the way I like it: simple.

[CobyPhoto]

Yup, it isn't often these people make changes that are logical and simplify things! In this case, it wasn't a simplification...it was the loss of revenues and the ever impending Mass Trasit problems in major cities in Texas that prompted this change.

CJ

[haraki74]

You think the state would have notified those that collect taxes that this changed. Did anyone get a notice?

[CobyPhoto]

They notified everyone...you should have gotten a flyer that informed you of these changes. If you didn't, make sure they are sending information to the correct address.

CJ

P.S. I received one a week or so ago.

[Gateruner]

I got a flyer in the mail a couple of days ago that stated this.

[R & J Photography]

we received our flyer a few days ago...

[LadyShutterBug]

i got the flyer as well.


so quick question. my "business location" is in unincorporated harris county- i am not in a "city" or town. we do not receive service from our local MTA in this area.

do i still just collect the 6.25?

[Gateruner]

Logic says that would be the case Kasey. However, the taxing jurisdictions dont always folllow logic. My thoughts lean toward charging the full amount regardless and just paying it. It is a pass through cost anyway so why take the chance on having an audit and they decide you owe the extra tax when you never collected it. Most people are accustumed to paying 8.25 anyway so it really shouldnt be a big issue.

[LoungeLizard]

No flyer here...

[LoungeLizard]

No flyer here...

Kasey, I'm in unincorporated Harris County also but subject to MTA taxes. If you've filed before, you should see what rates/taxing authorities you were subject to as it was included in the forms sent to you.

[CobyPhoto]

Originally Posted by LadyShutterBug

i got the flyer as well.
so quick question. my "business location" is in unincorporated harris county- i am not in a "city" or town. we do not receive service from our local MTA in this area.
do i still just collect the 6.25?

According to a search, you are located within Webster City Limits (Address listed on website) and SHOULD be collecting the 2% City Sales Tax Required. (Thou I think there is something wrong with the address, as I don't think you live where the mapping software is placing you!)

You need to make sure you are not within the City limits of any incorporated town, (i.e. Webster) in order to NOT collect the 2% city tax.

Tax Rate Search

The Maxium allowed by law, is 2% above the State Sales Tax rate, or 8.25%. Therefore, the collection policy change should not have affected you; you should have and should be collecting 8.25% Sales/Use Tax. With the change however, you will be collecting the MTA/ATD/CTA Taxes in place of that. (As Jesus stated.) As with many government agencies, they base the rates initially off of the information you supply...if that information is wrong, the problem is yours! They will come back and collect those unpaid taxes once they discover the mistake.

CJ

[suzyjazz]

A friend that I did a photo shoot for earlier this year asked me to reduce the sales tax since I was mailing her prints to her home (outside of MTA). I did so, but with this law, people can't save money that way anymore. It's just easier to charge the whole thing.

I didn't receive a notice, either. Then again I didn't even get my forms last year. I moved, but they would have been forwarded (we got all the rest of our mail....)

[klynam]

Ok - here's the question. I use an out-of-state online service for gallery hosting, order processing, and fulfillment. People purchase my photos online, and pay the online company, but receive their photos here in Texas. Currently I charge no tax as this is technically an out of state purchase. Does that change under this new law?