Retail Sales Taxes
Last night on local news there was an investigative report that probed how sales taxes are collected and paid to the State by retailers across Texas. Their take was that the State was losing 90 million dollars a year because of the State law that allows those that collect sales tax to keep one half of one percent of the money collected. The rationale for that law is to compensate the businesses for their extra accounting costs and for the time it takes to file the proper forms and pay the State. Filing use to be done the old fashioned way when the law was made. We had to fill out paper forms, write a check and mail it in. It is all done online for the past couple of years.
My nursery will collect about $190,000 this year in sales taxes. Over a years time that would allow me to keep about $950. That is certainly fair compensation for filing 12 times. It takes me about 10 minutes, once a month. That is not my only cost to collect this tax. Since most of my sales are bought with credit cards the fees to collect these taxes are rather high. I would estimate my credit card fees on the collected sales taxes for the State to be around $3,600 per year.
The TV news report barely mentioned credit card fees but did not explain to consumers that a retailer, like myself, can lose a substantial amount of money just by collecting the States sales taxes. The report implied that the retailers enjoyed a windfall by collecting sales taxes. This is certainly not true when the credit card cost is factored in. I guess that bit of information would have ruined their report and the premise that businesses were taking advantage of the State. Maybe the opposite is true.
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