Paying ecommerce sales taxes

We previously covered collecting sales taxes, and why that is tricky and may get trickier. This time, let us talk a little about paying them.

I'm going to start by saying something so shocking that you will not believe it.

In my career, in all the numerous times I have had to call various tax code enforcers, officers, bureaucrats or tax help line people; I have had a very pleasant experience.

Shocking I know. But it's the truth. Even when I was in the wrong, they were very nice. I'm going to share with you something my very excellent economics teacher once told me, "They don't really want your property, story or anything else. They just want the money. You can always work out a deal." I never hesitate to call the experts.



I'll say that being pleasant will always get you more. These guys deal with colossal jerks all day long, being yet another in the string doesn't make you stand out or make them want to stay on the phone. Even the guys from the "I'll be the biggest jerk in history so I get my way" school of thought are rank amateurs. I did phone support, trust me the people that were nice always got more out of me. My personal taxes once filed with me listed as serving in a war zone, I had to call the IRS. Sure I had to talk to three people and it was a little frustrating, but when each person realized the issue was faulty tax software they did everything they could to get it straightened out. When they got to the end of what they could do they personally handed me off to the next person in the chain instead of dumping me into a queue. Yes, you will find someone that is so worn down by that job that they just want to get rid of you as quickly as possible. Kill those people with kindness.

I bring all this up to prepare you. If you are going it alone, you will need to call these people and talk to them. Ask if they have a department that handles new businesses, ask if they have some information they can send to you. I know, you're on the Internet, everything is out there and you think you'll find what you need.

No you won't. You'll find about 70% of the info you need. Sooner or later you will need to make that call. You'll be glad you did. Heck while you are at it, ask if they know about any programs the state has to help out new online businesses.

When you get it all done and you know what to charge, what to charge it on and who to charge it to, you need to keep that money back to mail in. The history of business is littered with the corpses of small businesses that found that pile of money owed the taxman too tempting to stay out of. After all, you'll put it back when times get better, right?

Save yourself the headache, shoot that pile to the state as you go. Don and I worked for a place in the 1990's that decided to go with the pay-it-back-later decision. The owner spent 8 years behind bars when it caught up with him. Suddenly that pile of money owed the taxman doesn't shine so brightly does it?

My advice, interview a couple of accountants and find someone that will be willing to bring you under their wing. Unless you are an accountant, let pro handle the books. Because you will have the task of doing everything else to make your business succeed, having this task off your back is the way to go. Keep the checkbook under your control, but let them worry about balancing the sheets.

That image in your head of the boss sitting at the kitchen table or desk in the middle of the night, stacks of receipts a foot thick and trying to make sense of it all, that's Hollywood. Most businesses don't get to that point before an accountant has to come in. At that point, it is probably a full time job for the owner. An accountant could come into the office once or twice a week to get everything into order in about 1/10 the time you would. Accountants have more tools at their disposal to make things work out. Sure, you'll get griped at once in a while because a receipt is missing or you used too much petty cash but that is your clue that you shouldn't do your own books.

Almost any accountant will be skilled, educated, licensed and just plain better at the numbers than you are. Get a person that has been around the block a few times, they will be able to recognize problems and opportunities in plenty of time.

I'll finish with repeating the advice I always give when it comes to taxes. Contact your state and local tax authorities. They have departments that filled with people that want nothing more than to make sure you start on the right track. You're paying for those people anyway, you might as well use them.