Comments on: Ask the taxgirl: Sales tax http://www.taxgirl.com/ask-the-taxgirl-sales-tax/ Paying taxes is painful... but reading about them shouldn't be. Sat, 07 Nov 2009 20:18:36 -0500 http://wordpress.org/?v=2.8.5 hourly 1 By: Hedy http://www.taxgirl.com/ask-the-taxgirl-sales-tax/comment-page-1/#comment-8730 Hedy Thu, 05 Feb 2009 21:52:53 +0000 http://www.taxgirl.com/?p=1853#comment-8730 Could you please answer the above question? Could you please answer the above question?

]]> By: Hedy http://www.taxgirl.com/ask-the-taxgirl-sales-tax/comment-page-1/#comment-8729 Hedy Thu, 05 Feb 2009 21:51:21 +0000 http://www.taxgirl.com/?p=1853#comment-8729 Hello, Our Ladies Aid Society has dinners 9 times a year. We charge $7 per meal. At the end of the day we multiply the number of meals served by $7 to get our total income and then multiply that sum by 6% to calculate the amount of Sales Tax owed. Is that the proper way to calculate the tax? Or should we multiply the $7 by 6% and then multiply the product by the number of meals served? It only makes a few cents difference, but what is the law? Thank you, Hedy Hello,
Our Ladies Aid Society has dinners 9 times a year. We charge $7 per meal. At the end of the day we multiply the number of meals served by $7 to get our total income and then multiply that sum by 6% to calculate the amount of Sales Tax owed. Is that the proper way to calculate the tax? Or should we multiply the $7 by 6% and then multiply the product by the number of meals
served? It only makes a few cents difference, but what is the law?
Thank you, Hedy

]]> By: Pmac http://www.taxgirl.com/ask-the-taxgirl-sales-tax/comment-page-1/#comment-7454 Pmac Mon, 17 Nov 2008 16:18:27 +0000 http://www.taxgirl.com/?p=1853#comment-7454 It shall be computed and collected on the basis of the total amount of taxable items in the transactions without regard to the value or price of the separate items making up the total amount of a single sales transaction. It seems to me that the above explains it. Add it up, total it, tax it. It shall be computed and collected on the basis of the total amount of taxable items in the transactions without regard to the value or price of the separate items making up the total amount of a single sales transaction.

It seems to me that the above explains it. Add it up, total it, tax it.

]]> By: Mary http://www.taxgirl.com/ask-the-taxgirl-sales-tax/comment-page-1/#comment-7448 Mary Mon, 17 Nov 2008 03:00:20 +0000 http://www.taxgirl.com/?p=1853#comment-7448 But the law doesn't really answer the question, because it doesn't exactly define what constitutes a single "sales transaction." Is one person standing in line at the register with a bunch of items to purchase necessarily making a "single sales transaction?" Maybe or maybe not. For example, I might be buying two of the same item, but one is for my own use and one is to be used by a club which will reimburse me, but for which I will need a separate receipt. Or maybe I'm buying five of the same item to give as gifts to my five grandchildren, but I need five separate receipts to enclose so they can each make a decision to exchange them if needed. But this does bring back memories for me. I went on a date with Harvard Law student in the mid-1970s, to a diner that had a lot of 99 cent specials for a complete dinner. I had just moved to Massachusetts and didn't realize there was no sales tax on meals under a dollar. But order something that cost a dollar or more, and the full 5% tax kicked in immediately. My date ordered a 99cent special, and I, unknowingly, ordered something I thought was in the same ballpark, since it was listed on the menu at $1.05. My date looked at me, aghast, since it was actually going to set him back $1.10 since it would trigger the dreaded sales tax. I quickly revised my order to something else that was 99 cents, and the date went on. I guess if we had been dining under the applicable rules in Pennsylvania, we should have asked for separate checks so that the total of each "single transaction" would be under 99 cents! But the law doesn’t really answer the question, because it doesn’t exactly define what constitutes a single “sales transaction.”

Is one person standing in line at the register with a bunch of items to purchase necessarily making a “single sales transaction?”

Maybe or maybe not.

For example, I might be buying two of the same item, but one is for my own use and one is to be used by a club which will reimburse me, but for which I will need a separate receipt. Or maybe I’m buying five of the same item to give as gifts to my five grandchildren, but I need five separate receipts to enclose so they can each make a decision to exchange them if needed.

But this does bring back memories for me. I went on a date with Harvard Law student in the mid-1970s, to a diner that had a lot of 99 cent specials for a complete dinner. I had just moved to Massachusetts and didn’t realize there was no sales tax on meals under a dollar. But order something that cost a dollar or more, and the full 5% tax kicked in immediately. My date ordered a 99cent special, and I, unknowingly, ordered something I thought was in the same ballpark, since it was listed on the menu at $1.05. My date looked at me, aghast, since it was actually going to set him back $1.10 since it would trigger the dreaded sales tax. I quickly revised my order to something else that was 99 cents, and the date went on.

I guess if we had been dining under the applicable rules in Pennsylvania, we should have asked for separate checks so that the total of each “single transaction” would be under 99 cents!

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