MK and Sales Tax

Have a question about sales tax? Whether charging sales tax on retail is ok even if you discount? Google “sales tax + your state”. I did TEXAS and got this informative site. Try it for yourself! My advice to you: This is YOUR business. Do not trust anyone’s opinion. Go by your state laws and use MK Legal’s help if needed. YOU are liable for errors so make it your business to properly charge your clients.

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4 Comments

Filed under Helpful Articles, Money Management

4 responses to “MK and Sales Tax

  1. Another thought… since we pay MK corporate up front for sales tax, I think we legally can write off sales tax lost (like on hostess credits) on our tax returns. Not sure though. I will try to call legal soon to find out more.

  2. anonymous

    MK Rules, There’s a fantastic document on InTouch called “Tax Essentials” and it gets updated yearly. You can find it under Learn MK.

    The only thing I would add to your post is that that MK Legal can’t really give you specific tax advice to your personal situation. The best thing any of us can do is to work with a tax professional in our own states (and I’m not talking about HR Block or any of the other churn & burn tax places). Ideally our tax professionals should be familar with direct sales. I can’t tell you how much time I spent with my accountant educating her on MK at the beginning. Each year, I take her the Tax Essentials from MK (it’s about 60 pages, but worth it).

    My advice is to find someone who charges a flat rate and does not charge for consultations. My CPA charges me $250 and it’s worth every penny knowing that she and I have a long-term relationship, that she’ll work with me if I get auditted (knock on wood that I won’t), she fully understands my situation, and takes the time necessary to make sure that no stone is left unturned.

    In talking to my accountant about Sales Tax and getting my own tax id #, what she told me was that in my state (IL), because I don’t have a “history” built up with the state, I would have to pay sales tax MONTHLY and then once I had a history (that is up to my state to let me know when I’ve got sufficient history), they would contact me and let me know if I could pay less often (maybe quarterly), as often (continue paying monthly), or more often (weekly).

    For me, this is too much paperwork. As is submitting the paperwork to MK to get a “refund” on the tax paid. So I will continue to take it as a write off each year.

    Of course, the less we discount and just give away products, the less this becomes an issue.

  3. I have a few suggestions about taxes
    #1 I would recommend using some sort of software to track your sales and hostess gifts. The program I use is pinkoffice and it will total up non-recovered taxes at the end of every year (or quarter, whatever you need). Go to pinkoffice.com and start your 30 day trial (I get a bonus if you put referred by elysa)
    #2 get an accountant to do your taxes. I am getting a large tax refund this year because my accountant knows a lot about MK and all the different write-offs.
    #3 I am not sure how to do this yet but I have read that there is a form on Intouch to claim non-recovered taxes and they will refund you – I am going to check into this and try to do this every quarter, maybe every month

    @mkrules: since you are in the Dallas area I can give you the info on my accountant if you are interested, she is great

  4. I would LOVE that for next year!

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