The power of our community has benefited our Sales Tax implementation again. Since beginning this project, we have had help from dozens of our customers who have helped provide clarification to how their local sales tax laws apply to races and nonprofits. This has happened again in Wyoming.
Kevin Harris, our CFOO and “taxman”, received an email with an attached letter of clarification from the State of Wyoming. The statutes say “admissions to athletic and recreational events” are taxable, which is why our tax advisors said race registration fees were taxable. However, the letter clarified that races were excluded. In their code, if something is not specifically enumerated then it is not taxable. They also included a copy of our increasingly famous Taxability Matrix.
We have updated our database and system to reflect this change this morning. Good news for runners in Wyoming!
How are you accounting for the tax collected OR are you refunding it back to each participant?
To expand a bit on the last reply… The situation happens when we learn that a sales tax is not due on something we had been advised where it was due. In this case, we had been advised by our lawyers and the Avalara tax software that tax was due (as would a lay reading of their tax law would suggest). One of the great things about the RunSignup community is that it is large and we operate in an open manner. So one of our customers was able to get in touch with someone at the state who was able to make a ruling that race registration fees were not due. Unfortunately, there is no good way to get the money back from the state. And there is no good way to instruct Avalara tax software to reverse it. And there is no good way to show this on race transaction reports. So we are following the general guideline of state tax law, which says tax that is collected must be paid to the state.
How do you plan on accounting for tax collected that will not need to be remitted to the State? This has come up within our implementation. Thanks for the info!
If you collect sales tax, then you are required to pay it to the state or local taxing authority. So int eh case of Wyoming, the sales tax we collected is paid to the state. There is no good way to recover this, which is kind of a limitation of Avalara and kind of the local taxing authorities. Plus it would be very confusing. Good question!