Attention to detail is critical when dealing with sales and use taxes, as personal liability can result even when conducting business as a corporation or limited liability company. The sales tax is an additional cost tacked on to purchases of tangible personal property and certain services. The use tax, however, is a compensatory tax paid directly by the purchaser when the seller doesn’t collect the sales tax.
Unfortunately, sales and use tax complexities are compounded in the construction industry. Sales of real estate typically are not subject to tax, but contractors are subject to tax on their purchases of tangible personal property that are subsequently incorporated into real estate improvements. Therefore, barring any special exemptions, both general contractors and subcontractors must pay taxes on the majority of their purchases.
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Published August 18th, 2010 at 8:35 am in Risk Management, State & Local Tax Planning, Strategic Planning with no comments
Tagged with sales and use tax
For decades, small business owners, accountants, and others have argued the need for different accounting standards to be used by smaller, privately held companies as a replacement for the complex and burdensome standards issued by the Financial Accounting Standards Board (FASB). Opponents, on the other hand, have argued for only one set of accounting standards, pleading that multiple accounting standards could only lead to confusion and a lack of credibility for issuers of financial statements prepared under “lesser” standards.
Compelling arguments can be made by both camps, but the practical portion of the argument has, in recent years, tilted in favor of some version of “Little GAAP.” The continued proliferation of complex and controversial standards, some of which are costly and difficult to apply, has lead the American Institute of Certified Accountants (AICPA) and the FASB to increase their efforts regarding this difficult issue.
Two years ago, FASB established the Private Company Financial Reporting Committee (PCFRC) to address standards for private companies. The PCFRC recently issued a significant statement suggesting that the International Financial Reporting Standards for Small and Medium-Sized Entities (IFRS for SMEs) represent an “attractive alternative for U.S. private companies.”
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Published August 13th, 2010 at 7:46 am in Business Valuations, Mergers & Acquisitions, Rental Property Management, Risk Management, Strategic Planning with 2 comments
Tagged with GAAP, IFRS
