Firstly — a quick reminder that we’re reaching the end of the month, which means getting your monthly reporting done.. Send us anything we’ve been asking for … by the 1st? 🙂
Second — Have you reported your Beneficial Ownership Information to FinCen yet? If not, and you own a business type that’s required to report this (verify that here), then it’s time to get on that. While you have until Dec 31st to submit this information, it would be easier to tackle it now.
If you’re not sure what (or if) you need to report anything, or you’re just overwhelmed looking at the FAQs page and trying to figure out how to take care of it, then you might need some advice.
That’s something the Daffin Financial LLC office can help you with. Just grab a time here: calendly.com/gmdaffin
I’m here to ensure my Minnesota clients know what’s required of them according to the law (especially new regulations like the BOI Reporting Requirement).
I’m also here to give you guidance on a variety of business-related things. That includes things like sales tax holidays. While these aren’t in every state, knowing how they work and what they mean for your business is just good preparation.
Some of the 2024 holidays are already behind us, but most are still ahead. So let’s get you proactively preparing for what they mean for your business’s sales and marketing plan.
The Nuances of Sales Tax Holidays For Minneapolis Business Owners
“The man who is prepared has his battle half fought.” – Henry Ford
Sales tax holidays have both advocates and opponents. While consumers and politicians often celebrate these holidays for the savings they offer, the implications for business owners, especially in terms of compliance and reporting, are considerably more complex.
Sales tax holidays are not as widespread as you might think. In 2023, only 18 states participated, ranging from a weekend to much longer periods, with Florida standing out for its extensive offerings, including a year-long tax exemption on certain appliances and a “Freedom Summer” for outdoor activities.
Impact on businesses
For businesses, these holidays present a double-edged sword. On one hand, they’re purported to drive increased foot traffic and sales. (But a 2015 study found that sales tax holidays generally boost short-term sales by only 1-3 percent.)
On the flip side, they introduce a layer of complexity in tax compliance and reporting. Retailers face additional complexities in implementing and recording tax-exempt transactions, adding costs and potential errors.
The financial implications of these holidays are significant, costing states and localities nearly 1.6B in lost revenue in 2023. This loss highlights the trade-off between stimulating consumer spending and funding essential public services.
Preparing as a business
For you as a business owner, compliance during these holidays requires preparation to ensure that your point-of-sale systems are updated to accurately reflect tax exemptions during the holiday periods. Then reporting sales tax during these periods must be handled with care to ensure that exemptions are properly accounted for and reported to tax authorities.
This is no small feat, especially for small businesses that may not have dedicated tax compliance teams.
This is where professional accounting services come into play. By leveraging expert support (smile), businesses can ensure that they remain compliant, while also taking full advantage of the opportunities these tax holidays provide.
I mentioned earlier the opportunities these holidays can offer for a sales boost, though the stats indicate you’ll have to be intentional about making more than a 1-3 percent gain. Some research shows that consumers may delay purchases outside the holiday period, so it seems they are paying some attention to the potential for savings.
Promoting the sales tax holidays on your own marketing channels is an obvious way to create buzz, as is offering your own additional promotions alongside. One additional idea you could implement would be to offer a donation to your favorite local charity based on a percentage of sales generated during the holiday. Turn that savings into goodwill among your customers and your community.
Sales tax holidays in 2024
As we look forward to the year ahead, here are the dates and specific exemptions in each state. Note that some dates and holidays are still TBD.
Here are the holidays for 2024.
Sales tax holidays do offer a unique opportunity for Minneapolis businesses to drive sales, but they also require careful planning and compliance efforts. Need help? My team is here with support and resources.
Preparing for the year ahead,
Grant Daffin