OK … as we already know nearly every government budget is facing serious deficit levels. The state is facing at a four billion dollar budget deficit (count the zero’s: 4,000,000,000) on the new budget year that begins on July the first. New governor Tom Corbett is “reviewing all expenditures in the $28 billion budget” and looking for expense cuts.
If this was your personal household budget and you were looking for ways to balance your budget, what would you do? Take a hard look at how you spend? You would cut back on the non-essentials. You might decide to eliminate cable TV or turn you heat back to 60 degrees in the winter. But what if you took all the cuts you could and then you remembered, “Oh, yeah … there are people who owe me money!”
Would you then take a more aggressive posture and collect what is owed to you from them? You might!
It is curious that there are instances of “money owed” to the state when persons who go into business choose to not follow state laws that require licensing. For example, have you ever noticed that some merchants charge sales tax and some don’t. Wouldn’t you think the state of Pennsylvania might want to have conversations with those businesses which do not charge and remit money in accordance with the Sales and Use Tax codes?
According to the Pennsylvania Department of Revenue Website, “The sales and use tax is imposed on the retail sale, consumption, rental or use of tangible personal property in Pennsylvania. The tax is also imposed on certain services relating to such property and on the charge for specific business services. Major items exempt from the tax include food (not ready-to-eat); candy and gum; most clothing; textbooks; computer services; pharmaceutical drugs; sales for resale; and residential heating fuels such as oil, electricity, gas, coal and firewood.”
The law stipulates that the sales tax license must be displayed in a prominent location in the establishment. “The same law that imposes Pennsylvania sales, use and related taxes on certain transactions also requires vendors to maintain appropriate tax records. Specifically, a vendor is required to maintain records that support the information reported by the taxpayer on all tax returns. These records must distinguish between taxable and non-taxable transactions as well as document the proper charging, collection and remitting of tax money to the Department.”
In case you are considering starting a business, here is a link to a helpful guide about Sales and Use Tax: PA Sales and Use Tax Guide rev-585.
Increasingly enterprises are springing up and not charging sales tax as prescribed by law. Happily, most businesses are law-abiding businesses that do apply and remit the applicable tax. We think that the honorable businesses do comply with the state law and they are very willing to compete on a level playing field. After all, if they charge and remit sales tax, isn’t it reasonable to assume that competitors selling the same items charge and remit sales tax, too? Our favorite places do it right. We think that all retail establishments serving food should charge and remit sales tax on the specified products, too.
Fair is fair …