Sales and Use Tax – Robbing Paul to Pay Peter Franchot

On the 19th of every month I receive a reminder that the Maryland Sales and Use Tax is due to the Comptroller’s Office on the 20th.  This is the sales tax that Buzzy’s Country Store collects on items sold in the previous month.  

The online form used to file these taxes is shown below.  Note that the Line 4 sales tax rate for non-alcohol purchases is 6%, while Line 11 alcohol purchases are assessed at 9%.  Since approximately 75% of all sales in Buzzy’s are for alcohol, obviously Line 11 will be the bigger entry of the two.

After I complete and file the form online, the Comptroller’s Office will then debit the amount due from my Buzzy checking account on the 20th of each month.  Even for a small operation like Buzzy’s, it still adds up to a four figure hit each month on the 20th as that 9% tax on alcohol sales adds up fast.  

When conversations involve what bars and restaurants charge for a beer, it can be a little misleading based on whether or not sales tax is included.  In Buzzy’s for instance, say a beer costs $2.25 with that total including approximately 20 cents sales tax that gets sent to the Governor.  On the other hand, a restaurant menu that shows their beer costing say $3 doesn’t include the 9% that they are going to tack on when they tabulate and give you your bill.  

Maryland’s Sales and Use Form has gotten even more complicated of late because the previous legislature added new sales taxes on items such as Digital Products, Electronic Smoking devices (ESD’s) and Vaping Liquids.  Fortunately for me, I only have to worry about Lines 3, 4 and 11, so completing the form doesn’t take me too long.  Making sure I have the four figures in the checking account to cover the debit is another matter.
How about another Midnight Oil tune?  It has nothing to do with sales tax other than I just liked the refrain “Save your Peter and save your Paul, don’t put me up on your bedroom wall.”  What’s the old saying about when you rob Peter to pay Paul you end up with a sore Peter? 

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