Collecting taxes can be a challenge for restaurant operators, but technology can help make it easier. That was the message from a free webinar titled “How two restaurant owners solved their sales tax dilemmas” sponsored by DAVO by Avalara and hosted by Fastcasual.com. The webinar speakers were David Joseph, co-founder of DAVO and a former restaurateur and Saay Patel, owner of Maplewood Burgers in Louisiana.
Joseph said collecting sales tax was the “bane of his existence” as the owner of a farm-to-table restaurant in the 1980s. Automation of sales tax has made dealing with tax collection easier.
“What I’ve also learned is that mismanagement of sales tax is really painful for a business and can have long-term consequences and be detrimental to a business. It is actually one of the leading contributors to new business failures – failing to understand and manage sales tax,” Joseph said.
As a merchant, the state requires you to:
- Collect sales tax at the correct rate.
- Hold it harmless and secure, meaning you won’t use the money to run your business.
- Complete at tax return and remit sales tax to the state when due.
- Be personally liable for mistakes or late payments.
We live in a digital age, so why are we still managing sales tax manually when it is prone to human error?
The first thing you have to do is get the sales tax rates correct, Joseph said. “When it comes to getting tax rates correct, I discourage you from Googling or doing a web search,” Joseph cautioned. Most online sales tax rates are for retail sales.
To learn more tax tips, click here to view the webinar.