Friday, April 06, 2007

Banks Owe Sales and Use Tax

Banks often get caught for SUT in a couple of areas:

1. The first is the obvious failure to pay their use taxes. Since they often don't file SUT returns, they don't realize they have this liability. This same problem exists for other organizations, particularly professional services firms, that don't sell taxable stuff or services (or don't realize they're making taxable sales).

2. Banks often sell stuff, which is taxable. A few things that come to mind include: checks, credit card swiping machines, rental of safe deposit boxes (taxable in some states), deposit bags, software, meeting room rental (taxable in some states), numismatic items, etc.

I call this gotcha the "non-core sales" problem. Companies that don't make taxable sales in their normal activities might still be exposed in other areas.


Sales Tax Guy

No comments: