How do you all handle the sales tax issue? n I just jgot licensed by the city yesterday, and they require me to pay 2% sales tax on any cake I sell within the city limits and the state has a 6.1% tax.

Do you pass the tax onto the customer or include it in the price when you quote the customer? Example would be. . . I normally sell a basic 1/2 sheet cake for $40. The tax on that would be $3.24. So do I tell the customer that the price is $43.24 or do I subtract the tax from the $40 price I normally charge?

I hope that I am making sense here. I am excited and nervous all at the same time. Being legal means sooo much more paperwork, but thankfully, I am able to sell cakes out of my home without interference from the health department. One less thing to have to deal with.

I usually say it's _____dollars plus tax which comes to _____ in total. That way they know the base price of the item. You are not actually charging tax, you are collecting tax that you will have to give to the IRS on quarterly.

HTH
-Rezzy

pass it on to the customer...when u go to the store to make a purchase the company doesnt eat the cost of the taxes, they pass it on to the consumer...if you are working as a business, then you should do the same

there's no reason thay your business should eat the cost of consumer taxes

Like the others said, pass it on to the consumer. That's what businesses do. One note of caution, though...if you collect it (and since you're legal now, you HAVE to), be sure you pay it to the government. If you take it from your customer and don't pass it on to the IRS or your state revenue dept, you could go to jail and/or pay huge fines. Now might be a good time to consider an accountant if you're uncomfortable with all the financial legalties you have as a business.

Thanks for the input.