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magazine | Jul 20, 2022 |
Getting sales tax right is boring. Getting it wrong can be a disaster

Accounting is the boring part of interior design. Sales tax is the boring part of accounting. But designers take it lightly at their peril.

Late last year, Lisa Gilmore was confronted with the one word no designer wants to hear: audit. Gilmore’s St. Petersburg, Florida–based firm had been flagged by the state’s department of revenue for a thorough look at its books. Though the very term will send shivers down the back of any small business owner (accountants, only half-joking, call it “the A word”), Gilmore was surprisingly calm.

For one, it was a sales tax audit, not income tax. It’s far easier to demonstrate that you collected and passed on the required 6 percent on the sale of a sofa than it is to prove that a cocktail with dinner was a business expense. But more important, Gilmore knew her books were solid. “I was not worried because our bookkeeping is so buttoned up,” she says. “I was like, Nothing to hide here, let’s go!”

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