The city extended the due date for payment of certain taxes by about a month. Most businesses, mine included, combine tax collected with regular revenues and then remit the collected sales taxes to the appropriate entity on the due date. Instead of treating the money as a pass through and put into a separate account, which requires additional bookkeeping steps, business lump them all into one account and then remit collected taxes out of that account.
Unfortunately, businesses then forget that is not their money but was collected as a use tax, spend it and then have to worry about coming up with the money by the due date. Unusually, the business just pulls the owed taxes out of general revenue but now there is a situation where a lot of businesses, especially restaurants, collected taxes the first half of the month, used that money, and then had much lower revenues coming in for the past two weeks, while expenses such as rent and payroll still need paying. hence the push back of the date with the hope that businesses will, once they reopen, generate enough revenue to pay the tax collected.
Unfortunately, businesses then forget that is not their money but was collected as a use tax, spend it and then have to worry about coming up with the money by the due date. Unusually, the business just pulls the owed taxes out of general revenue but now there is a situation where a lot of businesses, especially restaurants, collected taxes the first half of the month, used that money, and then had much lower revenues coming in for the past two weeks, while expenses such as rent and payroll still need paying. hence the push back of the date with the hope that businesses will, once they reopen, generate enough revenue to pay the tax collected.
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