At What Point Should I Collect Sales Tax When I Allow My Customers To Pay Installments?

Good question and the answer is . . . . . at the time of the transaction.

For example, you did a repair but you’re allowing them to pay in installments – tax is due the signing day of the contract or the day of the verbal agreement. You sell retail and allow your customers layaway options – tax is due the time the items are put on layaway.

And it’s the FULL tax that is due upfront, even if you haven’t collected all the money from your customer.

So if you have a $100 service in a 6% county and you allowed your customers to pay the balance in $25 installments, sales tax in the amount of $6 is due the day the contract is signed, not when the service is paid in full.

This tricks a lot of people up because they always question ‘how am I to pay taxes on funds I haven’t received?’ Good question, but that’s not given any consideration when it comes to the law. You can read the upfront sales tax requirement clear as day here under 12A-1.056(1)(a), F.A.C.

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