I have a question for you.  I practice in a state where mMassage therapy is now a sales taxed service.  Who is responsible for collecting and paying the state sales tax? To my reasoning, it is the wellness center or spa, not the therapist "hired" as an "independent contractor".  I work at a number of businesses as an independent contractor.  Only one has insisted that I pay the sales tax.  I would very much appreciate it if you could clear this up for me.

Thanks for your note. Let me first state that I am not a tax expert and you should check with your local and or state sales tax departments for official information. But as to the tax, in my opinion whoever collects the tax from the client should be paying the tax into the state. So if the practice/spa collects the tax up front when the client pays them for the service, then they are responsible for it. If you are in fact the one collecting the money and tax from the client when they pay for the service, then you would be responsible. If you both collect payment (they handle the credit cards and you handle the cash) then I think you are both responsible. Does that make sense?

 

In effect neither of you is paying the tax...the clients are. You are just passing the money along from the clients to the state. If you are not doing things this way, you probably need to adjust your bookkeeping system and fees to add on or include sales tax. I would check with your local sales tax office to make sure you are also properly set up to be filing and so forth.

Do you have questions about your business structure, marketing, or general operations? If so, send them to me at Felicia@spalutions.com. I'll publish your question and my response in my blog along with whatever contact information you feel comfortable with me sharing (name, business name, city/state and/or website address or I can post it under as pseudonym if you'd rather remain anonymous). Then you can get a little PR for your business and others can benefit from our exchange. Thanks!