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Sales tax

Discussion in 'The Business of Clowning' started by Sweet Mimi the Clown, Sep 1, 2012.

  1. Things differ from state to state, but I would like to hear whether clowns are required to charge sales tax when doing a child's party. I am especially interested in Iowa.
     
  2. tim

    tim Have red nose, will travel

    Since you are selling a "service" rather than a "product", usually if there is a tax to be paid it will be a "services" rather than a "sales" tax.
     
  3. Special K'z

    Special K'z Well-Known Member

    Here is the link to the taxable services in Iowa. I could not find anything remotely related to entertainment listed. Except maybe 'wrecking' services. I can really tear up a town I tell you what. Anyway, Tim you may get charged for your 'dating' services though. http://itrl.idr.iowa.gov/mx/hm.asp?id=837&t=htmltoc#point
    Sara K.
     
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  4. tim

    tim Have red nose, will travel

    I may have to stop giving the birthday moms my number.
     
  5. Thanks Special K. You found the list of taxable services, and I found a list of non-taxable services. Neither one seems to consider entertainment of clowns. Now all I have to do is convince my accountant.
     
  6. Special K'z

    Special K'z Well-Known Member

    Did the non-taxable services list have entertainment listed at all. Like comedians, or magicians, etc. I would think if it listed comedians or stage actors or such that would be enough similar to allow the comparison.
    Sara K.
     
  7. I must have been mistaken and read the "taxable" list. I have done some further research and found that Iowa is one of the states where things are presumed non-taxable unless specifically mentioned as taxable.Hawaii, New Mexico, South Dakota and West Virginia use the reverse and consider all services taxable unless specified non-taxable. If I understood correctly I believe you have been doing things exactly right. I will pass this along to the accountant and chamber of commerce. This mountain has turned into a molehill. :)
     
    Last edited: Sep 3, 2012
  8. Special K'z

    Special K'z Well-Known Member

    Well that is good to know cause I've been thinking of doing some business in South Dakota. Thanks for the info.
    Sara K.
     
  9. Toby KID

    Toby KID New Member

    Of this thread, what scares me is you are paying an accountant that isn't familiar with entertainment accounting/tax rules? Then you are doing his research. You would be advised to do a lot more research or find an accountant that is willing got work for what you are paying him/her for. I will tell you from my work with accountants, very few will offer you the legal deductions you are eligible for. Simply because they don't know what your are eligible to take. The brain of the accountant will try to categorize you like other business and you shouldn't be. IF, IF, IF you look at the tax code you will find it is legal to deduct cigarets under your entertainment business. If you accountant cant figure that out, go to a different accountant.
     
  10. Special K'z

    Special K'z Well-Known Member

    Oh Shoot! I knew there was a reason I shouldn't a switched to chew! How bout my huntin dog and rifle. Think I could deduct them too?
    S.K.
     
  11. You're absolutely right, Toby. I'm researching the topic because I anticipate I will need to present the right information to the accountant at tax time to alleviate fears on his/her part. I do find accountants, in general, are over cautious about allowing deductions. Since my taxes are fairly complicated and my clown business is just moving from hobby to business it is not part of the firms expertise. They probably don't have many clients working in that field. Thanks for taking the time to reply and give "food for thought." You have plenty of entertainment experience and good advice.

    I realize I am mixing two topics here. I will be doing my own bookkeeping and need to know about charging services/sales tax. I do not plan to pay an accountant to keep the books since I am only starting a small birthday party business.
     
    Last edited: Sep 4, 2012
  12. Toby KID

    Toby KID New Member

    Lou Jacobs did
     
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  13. tim

    tim Have red nose, will travel

    Now, if you're going to perform lap dances, there could be some trouble with the state's department of revenue:

    http://my.earthlink.net/article/top?guid=20120905/c8464990-47f8-4914-9b9d-572cceac9fd7

     
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