The sheer number of taxes companies must pay surprises many new business owners. They can be assessed for unemployment, Social Security and a variety of excise taxes, to mention a few. The latter affects businesses dealing with everything from sports wagering and gasoline to indoor tanning and tire sales. They are imposed by some states as well as the federal government.
Whether you’re a new business owner or plan to start a company, you need to understand excise taxes.
On the federal level, you’re probably familiar with excise taxes on tobacco and alcohol, but they are also imposed on a variety of products and services. Although these taxes are normally priced into what consumers pay, businesses need to break their sales down to report and pay excise taxes quarterly.
Use Form 720, the Quarterly Federal Excise Tax Return, to determine your tax liability. If you need help either with filing or establishing recordkeeping to keep track, work with your tax professional who is experienced in this area.
Remember that business owners are consumers, too. In addition to paying these stealth taxes built into the pricing, consumers may also have to pay state excise taxes directly on purchases of vehicles, real estate and more.READ MORE