Illinois Photographers - Question for you!

I have talked with WHCC and the fine folks there told me that I can leave my current account as personal and create a new account as business.

The "business" account would be tax exempt while the "personal" account is not tax exempt. So when I order prints for my own use they will charge me the 6.25% sales tax and when I order prints to resell to customers (through my new business account # with WHCC) they don't charge me sales tax.

That will make things a lot easier!

why don't you just call your local IRS?

Borna C wrote in post #9443030
why don't you just call your local IRS?

A. The person you speak to will undoubtedly know nothing about the photographer's 10% rule. It's a special rule worked out as a "deal."
B. Nothing they say is authoritative anyway--and they will tell you that.

A. tell them to find someone who knows a thing or two about his job
B. well, internet boards aren't really the golden standard for tax law either

Borna C wrote in post #9448260
A. tell them to find someone who knows a thing or two about his job
B. well, internet boards aren't really the golden standard for tax law either

If you take a look at my two points above, B always takes precendence: Whether you get someone who knows about it or not, whatever they tell you over the phone is not authoritative. They will tell you that on the phone, and the auditor will tell you that when he's sitting in your office.

One of the links I provided is a written state letter on the policy. The other document was by one of the people involved in creating the law. That's as good as it gets as far as information goes.

The next step would be to take those documents to a lawyer for a third opinion. But going to the state isn't going to produce anything better.

of course not, as far as the legal side goes. but my treasury department (who we pay taxes to, we don't have an agency like IRS) has toll-free phones where you can get down and dirty practical advice according to the law mentioned above. so instead of reading 10 paragraphs of the law, you get something like "you need to put this and that on your invoice, and you calculate it like this". I supposed that they have something like that in the big country as well

Borna C wrote in post #9448653
of course not, as far as the legal side goes. but my treasury department (who we pay taxes to, we don't have an agency like IRS) has toll-free phones where you can get down and dirty practical advice according to the law mentioned above. so instead of reading 10 paragraphs of the law, you get something like "you need to put this and that on your invoice, and you calculate it like this". I supposed that they have something like that in the big country as well

Not really, especially not for state tax laws (which are not the jurisdiction of the federal IRS). That's why there are so many paid tax attorneys and certified public accountants around.

RDKirk wrote in post #9448995
Not really, especially not for state tax laws (which are not the jurisdiction of the federal IRS). That's why there are so many paid tax attorneys and certified public accountants around.

well that's just plain dumb. sorry for my missed advice than. our government wants to motivate people to pay taxes and show real values on invoices, and the first step toward that is to inform people what taxes they should actually pay.

also, there is a supreme court decision that arguments that you can not be legally charged for breaking the laws that you weren't properly informed of by the government. that is also part of the reason they have such hot-lines, brochures etc.

Well, in the US of A, the tax court is a completely different animal from regular courts. Even if you can prove that you were following the instructions of a government tax official, you will still face the same penalties as someone who was intentionally trying to evade taxes.

RDKirk wrote in post #9454117
Well, in the US of A, the tax court is a completely different animal from regular courts. Even if you can prove that you were following the instructions of a government tax official, you will still face the same penalties as someone who was intentionally trying to evade taxes.

on the flip side, our guys have a higher interest in informing you since the value added tax is 23%, profit tax 40%, and government takes between 45 and 60 per cent of your salary (for pension, social transfers, health insurance). thats without mentioning special taxes on everything from gas and tobacco to cars and road tolls

for that kind of money, they might as well inform you

Another question.....

I also do sell prints on my smugmug site (customer orders prints, pays online, and they receive the prints....I never see the prints). Since I have a pro account I can specify the Illinois tax rate. However, using the 10% rule in which the sales tax is 0.75% (see above), I cannot enter an amount lower than 1%. I contacted smugmug and they said pretty much you cannot go below 1%. The only option I have is to charge 1% sales tax which opens up a new can of worms because I would be overcharging customers on the sales tax.

Should I just leave it at zero? Any suggestions?

Maddog12 wrote in post #10197098
Another question.....

I also do sell prints on my smugmug site (customer orders prints, pays online, and they receive the prints....I never see the prints). Since I have a pro account I can specify the Illinois tax rate. However, using the 10% rule in which the sales tax is 0.75% (see above), I cannot enter an amount lower than 1%. I contacted smugmug and they said pretty much you cannot go below 1%. The only option I have is to charge 1% sales tax which opens up a new can of worms because I would be overcharging customers on the sales tax.

Should I just leave it at zero? Any suggestions?

Maybe you could adjust your prices to include the tax and set the tax in the system at zero. Just be sure to add a line telling customers that the price includes tax.

RDKirk wrote in post #10197214
Maybe you could adjust your prices to include the tax and set the tax in the system at zero. Just be sure to add a line telling customers that the price includes tax.

That is what I have done as a temporary fix.