So this is one of those videos. I don’t know, well, I’m going to tell you the origin story of it.
But it’s one of those videos I don’t think I should have to do, but honestly, the more I talk about it, the more I talked to auto shop owners, the more important I think this is.
So recently, we had a collaboration session with myself, and a couple of other shop owners, business owners that come from the automotive industry. And they were all technicians. I was the only one in the group that had not been a technician. And we get into the sales tax discussion about all their horror stories.
So one thing I’m going to tell you is you’re typically and more likely to get audited by your local and county sales tax companies or businesses than you are by the IRS.
The IRS just doesn’t have enough people to go through and audit all of those little people. But your town, city, and state people do. And they will shut you down in a hurry.
And I’ve got a horror story from them, everybody else does. But during this discussion, the technicians that were business owners were like, “Hey, we didn’t know we had to pay sales tax.” I’m like, “How do you not know “that you have to pay sales tax? “Everybody has to pay sales tax.”
You have to collect it and you have to turn it over to the people that you’re collecting it for.
So the thing I want you to remember is sales tax doesn’t belong to you. It’s a flow through the business. You pick it up, you collect it, and then you send it on its way.
So if you’re just commingling all that sales tax money in the rest of your accounts, guess what? You’re going to spend it.
And at the end of the month, or quarter, whatever when you need to spend it, oh, I’m sorry, when you need to pass it on, you’re not going to have it.
Why is that? It’s because you’re not separating it out. At the end of every week, if you’re following my Auto Shop Profits and Cashflow program, you should be taking that money.
And you should look at your point of sale system. And it’ll tell you exactly how much sales tax you’ve collected.
And before you do anything else, you need to take that money, zip it up over to your holding account, and leave it there. That money is not yours. It doesn’t belong to you. Stop spending it, right? Pass it on.
This is one of the top 3 things I see that shop owners get in trouble with. It’s because they’re taking the sales tax money. They’re collecting sales tax money and they’re not passing it on to where it needs to go. Sales tax money is not yours. It doesn’t belong to you.
Guys, make sure you don’t fall into that trap because you can get in a lot of trouble really, really quick. Have a great day, everybody.