Bookkeeper Vs. Accountant

In the last couple of months I have been helping out a Flooring Wholesale company get their company on track. They have had many run ins with bookkeepers stating they were QuickBook experts, many Accountants telling them they were a CPA just to find out they weren't and this has just been in the last 6 months alone, so you could only imagine the chaos in their record keeping.

With that said, they had many of these so called "CPAs" tell them incorrect information when it comes to sales tax. One Accountant told them to be sales tax exempt, the other told them they didnt have to pay sales tax, while others just didn't know what to do with their sales tax. Furthermore, their new so called "Accountant" stated again they need to be sales tax exempt. As I discussed the formalities of how inaccurate he was, he debated with me. Here I am a Bookkeeper, former Regional Financial Analyst and Regional Accountant... going toe to toe with an incorrect Accountant who will not stand corrected.

As I evaluated & researched the knowledge of many in the Flooring Sales & Installation industry, I have come to the conclusion there is a lot of confusion regarding sales tax in this industry so I wanted to advise those Florida businesses that fall in this catergory of the rules:

In any Flooring Cash & Carry sale (these are the sales with no installation services provided by the retailer), the customer is to pay the sales tax at the given rate of Florida plus the county rate (or discretionary rate) here in Martin & St. Lucie county the total sales tax would be 6.5%. If the total sale comes to $5,000 or less you would charge the full 6.5% sales tax figure, however if the sales is over $5,000 you would only charge the Florida Sales tax rate of 6% and a flat $25.00 instead of the 0.5% for the county/discretionary sales.

Example 1: Your purchased 500 sqft of laminate at $4.29. The total sale would be $2,145 so the sales tax that would be charged would be $2,145 * 6.5% = $139.43

Example 2: If you purchased 1,500 sqft of laminate at $4.29. The total sale would be $6,435 so you would charge the customer 6% = $386.10 and $25 (instead of the 0.5%), the total sales tax would = $411.

If this company were to do what they call a Furnish & Install contract, which is selling the product and installing it, there would be no sales tax charged to the customer or from my discussion with the FDOR auditor, no sales tax owed to the FDOR on that sale because you are providing a home improvement service. This is and only if a company is doing what they call lump sum billing, which is basically figuring in the sales tax, price of material, freight and labor into one lump sum figure.
The retailer would pay taxes to the suppliers however, nothing is owed to the IRS.

If you do not do lump sum billing then retailer must pay sales tax on materials to both the suppliers and the FDOR.

Also, another issue found is if an Accountant or other Accounting Professional states you should become sales tax exempt, this is the incorrect terminology. What they are trying to convey is to get a Resale Certificate, however in the Flooring industry mentioned this is a bookkeeping/accounting nightmare as now you must pay use tax, which is the tax used on the exact total of materials used.

Please see FDOR publications:
Sales Tax Filing Instructions: http://dor.myflorida.com/dor/forms/2009/dr15ezcsn.pdf

Discretionary Information:
http://dor.myflorida.com/dor/forms/2009/dr15ezcsn.pdf

Flooring dealers:
http://dor.myflorida.com/dor/tips/tip03a01-03.html