Retail Workshop Learnings

[CactusWren]

This week I attended a Retail workshop by the Arizona Department of Revenue ($15). Some of the things I already knew, but I learned a few things I want to pass along. Obviously this is for Arizona and I am no CPA!

1. This might sound dumb to most, but I did not know that I should not be paying taxes to my suppliers as I re-sell the goods. A simple Arizona form 5000 does the job. You send it to your supplier and they know not to charge you. Wonder if it works if you go buy somehting at say Costco... Haven't tried yet. Needless to say this impacts the bottom line!

2. Learned that for e-commerce the average of local sales in which one needs to charge local tax is about 2%.

3. Learned about usage tax. If you decide to grab something from your inventory for a gift or for charity, you are responsible for paying the sales tax.

4. If you attend a trade show and sell goods there, you must get a local biz license and collect sales tax according to their rates.

Thought some might find this useful.

 

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[kurtyordy]

Re: Retai Workshop Learnings

1. This might sound dumb to most, but I did not know that I should not be paying taxes to my suppliers as I re-sell the goods. A simple Arizona form 5000 does the job. You send it to your supplier and they know not to charge you. Wonder if it works if you go buy somehting at say Costco... Haven't tried yet. Needless to say this impacts the bottom line!

I know both Sam's and Lowes offer tax free accounts, not sure on Costco

 

[randallg99]

This week I attended a Retail workshop by the Arizona Department of Revenue ($15). Some of the things I already knew, but I learned a few things I want to pass along. Obviously this is for Arizona and I am no CPA!

1. This might sound dumb to most, but I did not know that I should not be paying taxes to my suppliers as I re-sell the goods. A simple Arizona form 5000 does the job. You send it to your supplier and they know not to charge you. Wonder if it works if you go buy somehting at say Costco... Haven't tried yet. Needless to say this impacts the bottom line!

2. Learned that for e-commerce the average of local sales in which one needs to charge local tax is about 2%.

3. Learned about usage tax. If you decide to grab something from your inventory for a gift or for charity, you are responsible for paying the sales tax.

4. If you attend a trade show and sell goods there, you must get a local biz license and collect sales tax according to their rates.

Thought some might find this useful.

1. any merchandise you resell is not subject to sales tax.

2. this varies from state to state.

3. this also varies from state to state.

4. jurisdiction of the land always prevails.


you are very smart to get good information straight from the horse's mouth.

if you can stand one more piece of advice : hire a bookeeper (not a CPA) to set up the entity's biz licenses and sales tax certificates...(CPA should set up or consult on setting up the entity, though). this alone will probably save you a couple of headaches and probably countless hours. (CPA costs too much $ just to do simple BS work)

and since I assume you are seeking info for a retail biz, I will offer yet one more bit:take up other courses offered by the state in subjects areas such as HR, developing operations manuals and rules and regulations... many other topics may be of specific interest, but I have found that compliance issues are best learned from those who enforce them.

ok, here's one more thing: if you hire people get yourself some EPLI insurance. This insurance is relatively inexpensive and can truly save the business.... a few years back I was sued for six figures because one of my managers did not follow protocol and an employee was "wrongly" terminated ... the case was a bunch of horse shit, but nontheless a lot of sleepless nights followed and this insurance would have come in handy had I bought it.

good luck

 

[Eric]

1. This might sound dumb to most, but I did not know that I should not be paying taxes to my suppliers as I re-sell the goods. A simple Arizona form 5000 does the job. You send it to your supplier and they know not to charge you. Wonder if it works if you go buy somehting at say Costco... Haven't tried yet. Needless to say this impacts the bottom line!

Just switch your Costco account to a business account (no extra money) and whenever you make a purchase for your business, let the cashier know that its a resale order and they will not charge you tax.

 

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[CactusWren]

Randall and Eric,

Thanks for the info. speed +

I went on the gov't website and got my biz a license for $12. It was easy. Do not have plans for any trade shows for now. They are great to determine pricing, but that is about it...

Randall - What do you mean by sales tax certificate?

I'm off to a Quickbooks seminar today. I only know enough QB to get me into trouble. Had a bookkeeper set it up for me and I have already made several mistakes. I am hoping to learn how to correct them soon...

 

[White8]

I live in a state with no sales tax so I don't have much advice on sales tax but I will second the EPLI insurance and the bookkeeper. Be sure to use Quickbooks or your bookkeeper to generate monthly financial statements so you can easily measure performance each month and compare with the same month in previous years.

A couple of things to keep in mind when laying out your retail store:

1. When customers walk into your store they generally turn to the right.
2. Place your more expensive products at the front of the store with the lower priced items to the back. Customers will walk past the more expensive items in search of the lower priced items and will often pick the more expensive item because they either find it first or discover that it is much better than what they came in looking for.
3. The products you are trying to push should be at eye level on the shelf since that is where people look first.
4. Keep shelves fronted and neat. Unkept shelves look poor and send the wrong message.
5. Have a decent quantity of any item on the shelf. Most people won't take the last item on the shelf.
6. Change end caps regularly to highlight products. Some vendors will even pay to have their products on an end cap.

Employees:

1. Train employees to be knowledgeable on the products.
2. Train employees to help customers find what they are looking for, not just give the customer an isle number.
3. Develop systems to keep your employees honest.
1/3 are honest and wouldn't steal from an employer
1/3 would steal under certain circumstances
1/3 would flat out steal

 

[randallg99]

Randall and Eric,


Randall - What do you mean by sales tax certificate?

I'm off to a Quickbooks seminar today. I only know enough QB to get me into trouble. Had a bookkeeper set it up for me and I have already made several mistakes. I am hoping to learn how to correct them soon...

it's a resale certificate required by the state that closely resembles the fed id#... when buying from suppliers, they will ask for a copy of this certificate so that they don't charge you sales tax on the merchandise you will be selling.

hope the QB seminar did you some good. I use QB pro for my personal finances including some real estate investments and it produces some great reports.

 

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[CactusWren]

Just got my Transaction Privilege Tax license number fro the AZ Dept of Revenue. This was amazingly fast in less than a week from start to finish.