Take a Penny, Get an Audit: Confusion Over One-Cent Sales Tax Leads to Trouble
- Posted on August 1, 2011 at 1:10pm by
Becket Adams
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Small business owners in North Carolina don’t need a reminder of the inefficiencies of the Department of Revenue–but they are getting one anyway.
According to a recent story from newsobserver.com, “Small-business owners didn’t know a temporary one-cent sales tax hike had expired on July 1, when the state budget came into effect.”
Beth Stevenson, a spokeswoman for the Department of Revenue, claims that the businesses were informed in numerous ways, including four notices on its website and over 40,000 email messages, along with alerts on new tax forms.
These efforts “should have covered everyone,” said Stevenson. Revenue also claims that it sent information to trade organizations such as the N.C. Retail Merchants Association to share with its members.
However, several business owners claim that it was only through the local news, word of mouth and accounting firms that they learned of the change. They maintain that the website postings, emails and tax forms were either insufficient or non-existent.
“They have my email address, but I didn’t get anything,” said Jim Ward, owner of Just For You card and gift shop in Goldsboro. He is frustrated that his business may now face severe financial consequences from the IRS because his store failed to make the appropriate changes.
According to newsobserver.com, “Carol Anderson owns Vaguely Reminiscent, a women’s boutique in downtown Durham. She acknowledged that the sales-and-use tax forms she fills out each month indicated the tax rate would become 6.75 percent July 1. But Anderson said that’s because the temporary tax was supposed to sunset. Knowing that the legislature was debating the issue, she said she expected to hear definitely from Revenue about what to do.”
“I told my employees, ‘We’re going to keep doing it until we get a notification,’” Anderson said. “We never did.”
Anderson learned the tax rate change was official from a neighboring business, who heard about it from a customer. She’s now charging the correct tax.
The non-communication has resulted in two major problems for business owners in North Carolina. First, many customers who knew of the impending change in the state’s sales tax and are now complaining that stores were purposely pocketing the extra cent. This has caused several stores to go into full damage control mode (which can be costly and time consuming).
Secondly, and perhaps even more problematic than angry customers, businesses that didn’t switch over on time may face an audit from the IRS.
And all this for a one-cent change in sales tax.
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blazingaway
Posted on August 2, 2011 at 4:08pmWhat the hell, Customers are complaining. With all the discounts they get. So change the receipt, add a “F”ing penny(ies) for what was mistakenly put on the tax and add it to the cost of the item. If the customer wants to return it then take it back or give them the few pennies they want. WHAT A waste of time and money, where is everyone’s humanity? Damn people are stepping on a quarter to pickup a penny. Oh, I forgot these are government people who we pay for, employ and need more of to protect us from us …. BUT aren’t they also just us? Who are the dumb bunnies. I’m going to find a job with the government because all the rest of you are too stupid to vote to get ride of them … you want safety in life and not freedom
Report Post »froggy22
Posted on August 2, 2011 at 3:17pmThe sales tax decrease in NC is for one PERCENT. Not a cent (penny) but PERCENT. And, businesses that did not make the change did not do their due diligence. I work in accounting in NC for a business and we made the change correctly and on time. I have ample other grievances for the way this state is being run but in this particular case, the liability did not lie with the state.
Report Post »drphil69
Posted on August 2, 2011 at 1:57pmChange the rules then screw the business owners. We are headed for a meltdown. WHY WOULD ANYONE START A BUSINESS HERE?!?
BE PREPARED.
Report Post »clingingtogodandguns
Posted on August 2, 2011 at 6:20amFirst divide them with race bating,then class warfare{rich against poor for you in Rio Lindo}.Get them to hate big business and love gov’t.Now hate the little business too.Just take the .1$ and donate it to a charity or church.That ought to piss off the left.
Report Post »On a separate topic the debt thing is, if they don‘t get it worked out the welfare is the last to be paid that’s why the left it going crazy.All their voters won’t get paid.
cableguy03
Posted on August 2, 2011 at 5:05amWhen the left want’s something they go on strike to get it. How about a TAX payer strike. All tax payers stay home from work. No work No TAXES owed. Time to starve the PIG.
Report Post »DaBig2na
Posted on August 2, 2011 at 4:43amAs an NC resident I am sure all businesses knew of the one cent tax decrease. It have been a topic of debate for the last 6 months. There are some stores that took several days to adjust their tax rate. The tax decrease was for only non food small ticket items. Cars, boats etc go under a different rate.
Secondly the IRS would not be likely to audit a business for having an incorrect tax rate. However the NC Dept of Revenue would. I seriously doubt that they would immediately audit since it has only been in place since July 1.
The caveat in all this was when the sales tax rate went down 1 cent the gas tax went up i think 3 to 4 cents.
Report Post »froggy22
Posted on August 3, 2011 at 8:19amSales tax went down 1 PERCENT and the gas tax increased 2.5 cents per gallon.
Report Post »Eyeball
Posted on August 2, 2011 at 2:29amGovernment at it’s best again.
Report Post »confederacyofdunces
Posted on August 2, 2011 at 12:44amIt is typical that NC’s govt would mishandle the simplest things. Ive seen some pretty dopey laws in the last 7 years here in NC. Our governor is a lamebrain and the assembly until recently was controlled by a pack of moronic democrats. I don’t understand how the conservative and christian people of NC would vote for closet progressives called democrats. Does it stem from old sentiments stemming from the civil war.I can only hope for change, real conservatives in office.
Report Post »Brewskie
Posted on August 1, 2011 at 10:54pmHow many times have you read of a “temporary” tax actually being temporary?
I‘m 54 and I can’t think of another time when a tax was sunsetted.
It made such news here in NC that I can’t see how any business can claim ignorance.
Report Post »CatherineAnn
Posted on August 1, 2011 at 10:13pmIn Michigan we have an unclaimed property law. Being a very small business I never heard of it until recently but if you don’t report to the state that you do not have any unclaimed property in your possession it is a big fine and a possible 10 year audit. When I found out I was just amazed and of course I filed all the forms just to let Michigan know that I did not have any unclaimed hats or left behind items from customer or unpaid employee checks that they never picked up. OH PLEASE! Don’t they have anything better to do? Just had to share.
Report Post »Steel Awesome
Posted on August 1, 2011 at 10:28pmIn answer to your question: No.
Report Post »jrcherron
Posted on August 1, 2011 at 9:59pmOk, lets do the math. If these small businesses had 1000 transactions a month (which is a lot of transactions a month for a small business) that would add $10.00 a month. $2.50 a week. That’s $0.3571 a day. These small businesses really pocketed some change. I will personally pay off this debt of $10.00 to the IRS, and save the taxpayers some change themselves. Btw, how much do IRS agents get payed an hour?
Report Post »Pelling1020
Posted on August 1, 2011 at 9:03pmThe Tar Heel State, where is Michael Jordan? He could solve this snafu!
Report Post »Gypsy123
Posted on August 1, 2011 at 8:39pmI agree with Reinhart start your underground NC needs to get with other states to sue the Federal government for not protecting borders.
Report Post »Smokey_Bojangles
Posted on August 1, 2011 at 8:34pmBreak Us Bev Perdue won’t let it laps long.
Report Post »wisehiney
Posted on August 1, 2011 at 8:12pmI really miss the great Jesse Helms.
Report Post »johnlee
Posted on August 1, 2011 at 11:40pmHey HEY! I’m Black and I miss him too. Did some work on one of his election.
Report Post »Relic242
Posted on August 1, 2011 at 8:05pmDo we really have to submit to this petty garbage? Misshell obamas monthly french fry budget amounts to more money that is at steak here. The IRS Cartel needs to focus on sensibility, not bully, extortion strong arm loan shark tactics.
Report Post »UlyssesP
Posted on August 1, 2011 at 7:50pm“complaining that stores were purposely pocketing the extra cent. ”
Report Post »This was part of the NC govt plan. Get consumers angry at “greedy” small businesses.
rienheart
Posted on August 1, 2011 at 7:09pmBest thing to do is Close all Businesses and declare NO MORE BUSINESS IN NORTH CAROLINA. NO MORE TAXES FROM NORTH CAROLINA, NO MORE JOBS IN NORTH CAROLINA. Give the Government what they want and then some. Barter under the table. Become an Underground economy. Then Secede. Let the Feds invade.
Report Post »Yes, I know it’s crazy, but is it any crazier than our out of control Government suing States for Passing laws to protect themselves from invasion from Mexico? Crazier than Government Gun running to Criminals in Mexico and other countries? Crazier than Government making Americans Buy Health Insurance against their will? Crazier than Government taking over family farms? Crazier than deleting the 2nd Amendment from the Constitution and confiscating private ownership of guns from Law abiding citizens? Crazier than our Government actively Destroying the American Economy. Crazier than our Government actively trying to gut our Military and Leave America Defensless? Crazier than Our Government starting another war and denying that it is a War? What is Crazier????
Tyson
Posted on August 2, 2011 at 1:21pmBeen waiting for a state to have the fortitude to leave the union.
Report Post »alienguns
Posted on August 1, 2011 at 6:39pmI own several small businesses and collect sales tax for the State, so I am basically an un-paid employee of the state….I do their work for them and they allow me to exist……..Kind of like being an indentured servant without any benefits of an indentured servant!!
Report Post »mt7558
Posted on August 2, 2011 at 12:56pmAbove all and foremost a business owner is an uncompensated local, state and federal employee. You must under penalty of law collect and remit all sales, use and employee withholding taxes or face criminal prosecution. Not what I really thought I would have to deal with when I had my business. From now on I work for others, let them have the headache. Sorry.
Report Post »Wolf
Posted on August 1, 2011 at 5:16pmGovernment miscommunication at its best. If it comes over the electronic transom, it’s junk mail. I want hard copy in my hands when it comes to laws, especially those concerning money. To claim the news/information was posted on-line and in Email is bogus, period. If mail comes and hits my spam box, it’s all deleted immediately, not wasting time sifting thru hundreds of spam to find one little POS from a fed agency claiming I have to charge more in taxes.
Report Post »Hard copy or it isn’t confirmed. Period.
TheLeftMadeMeRight
Posted on August 1, 2011 at 5:10pm“businesses were informed in numerous ways, including four notices on its website and over 40,000 email messages, along with alerts on new tax forms.”
I am a small business owner that collects and pays sales tax to the state. They have my contact information, address (home & biz), email, fax, phone numbers, etc. and they have No Excuse. They sure as heck have no problem finding me when their tax is due. Render to Cesar that which is his…
Report Post »loriann12
Posted on August 1, 2011 at 5:42pmThis is their way of trying to put small business out of business.
Report Post »right-wing-waco
Posted on August 1, 2011 at 4:41pmFacism at work.
Report Post »fliteking
Posted on August 1, 2011 at 5:26pmb-i-n-g-o .
Report Post »captaincameron
Posted on August 1, 2011 at 4:31pmIt sucks to say, but it‘s the business owner’s responsibility to make certain that they adhere to state, local, and federal taxes and regulations.
Report Post »I think a full IRS audit and fines is ridiculous, though.
13th Imam
Posted on August 1, 2011 at 4:55pmAlot like the ole speed traps that suthern sherrifs used to set up with tree blocked speed limit signs. Many a Yankee was snared by the 45 MPH to 20MPH ( blocked by a tree) ruse. F/N Lawyers
Report Post »TheBMT
Posted on August 1, 2011 at 6:27pmBut when they change so often, and so many, its quite hard to keep up with them all.
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