For owners in Frisco
The rate on a sale in Frisco is the state's share plus the city's share. No county or transit tax is added.
Ask about your rate.
A sale in Frisco has a sales tax rate of 8.25 percent. Of that, 6.25 percent goes to Texas and 2.0 percent goes to the City of Frisco. Collin County and Denton County don't add a sales tax of their own. Frisco isn't part of a transit authority, so there's no extra 1 percent transit tax on the receipt.
Many cities around Dallas do charge that 1 percent transit tax, so some owners expect it in Frisco too. If your register still adds it, your deposits won't match your sales tax report. Your customers also paid a tax you may not owe. We look for that problem in the month it happens, so it doesn't pile up until the end of the year.
The sales tax you collect isn't profit. It sits in your deposit, but it belongs to the state. Your sales tax report should come from your actual sales records. It shouldn't be a guess made the morning the report is due. If you only watch your bank balance, a few busy weeks can make it hard to see how much of that money is tax.
You run the register, and we keep track of how much of each deposit is tax. A bank balance can look better than the month really was. In your books, the sales tax you owe shows the state's share and the city's share, and nothing else.
If you sell in more than one city, we keep each city's rate on its own line. A delivery address can change the rate, even when your shop is in Frisco. Tell us how and where you sell, and we'll set it up that way. We won't blend the rates together just to make your deposits look even.
Your books also need to show the tax you owe going down when you pay it. If the whole deposit stays in sales, the month looks better than it was. Then the tax payment later looks like a surprise expense, when it's really the tax you collected going to the state.
Your total sales, the tax you collected and the deposits in your bank all tie to each other. If they don't, we keep the month open until they do.
If you refund sales tax to a customer, we record it as a tax refund. We don't hide it as a discount on sales. Your sales tax report and your books should show that refund the same way.
If you also deliver outside Frisco, your register might charge 8.25 percent on every ticket. The delivery address could have a different city rate, or the same one. We keep each rate in its own column for the month, and the deposit is the total of those columns.
Gift cards cause a lot of mix-ups. You get the money before the sale happens. Sales tax is usually due when the customer uses the card. If you record the whole gift card deposit as a taxed sale, you report the tax too early. Later, when the card is used, it looks like income with no cash behind it. We sort those sales out by date.
If a discount lowers the price, it lowers the sales tax too. Sometimes a discount comes off your income while the tax is still figured on the full price. Then your books show more tax owed than you really owe, and the customer's receipt won't match your books. We check the receipts, the deposits and the tax owed for the same week.
When your register report and your bank don't match, we don't assume the register is right. A batch can get counted twice, a voided sale may never have reached the bank, or a delivery app may have paid you a different amount. We write down the reason. We keep the month open until the reason is something you recognize.
Some register software comes with a transit tax already turned on, because it was set up for a city that has one. For a sale in Frisco, that tax shouldn't be there. Your customer paid it and it's in your deposit. Even so, your sales tax report shouldn't list a transit tax the city doesn't charge.
We split each deposit into the state's share, the city's share and anything extra the register added. The extra has to be refunded to customers or explained. We keep it out of your sales, so the month's numbers stay accurate.
Maybe you sell at a booth in another city one weekend and at your shop the rest of the month. Those days may have different rates. Write the booth's city on that day's batch. We won't assume the booth used your shop's rate just because the money landed in the same bank account.
Delivery app payouts need their own split too. The app may have already taken out its fee and some tax before the money reaches you. If you record the payout as the full sale, your sales look lower and the fee disappears. Before we close the month, we'll want the app's payout report next to the bank deposit for the same week.
If your register adds a tax the city doesn't charge, we'll find it when we close your month.
You will be talking to the Steven Palmieri practice.