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DesRochers Backyard Pools and Spas has had two sales tax audits in the last 17 years. One of the biggest hurdles when starting a sales tax audit is how time-consuming it can be. Not only is there a lot to prepare, but the process of having auditors at your location can also take up a lot of time. If all your financial records, including bank statements, are in order and your invoices and sales records are accurate, the audit will progress smoothly, and you will need to answer fewer questions.
DesRochers Backyard Pools and Spas has three retail locations with three different tax rates as well as a service department and a construction department. After the first audit, we separated our retail and service departments from the construction department for accounting purposes. We file a separate sales tax report for our retail and service departments making sure we pay the correct sales tax for each location, and then we file another use tax report for our construction department. This ensures all the correct sales tax or use tax is being paid for each department.
We use Evosus for our accounting software and can assign the proper sales tax to the department or products sold. After our second sales tax audit, we started keeping copies of all receipts that are not associated with products sold like purchases made at Amazon or Home Depot to show we paid sales tax when the item was bought. If we did not pay sales tax at the time of purchase, then we pick it up on our sales tax report and pay it when we file the report.
DesRochers Backyard Pools and Spas
Shorewood, Willmington and Morris, Illinois
Having multiple locations in different municipalities requires us to publish financial reporting by store. In our case, we have six locations, all with different sales tax percentages. Our POS system automatically calculates the correct sales tax in each store location, so it’s really not that complicated. At the end of every month, we report our sales by location with the itemized sales tax we have collected to our bookkeeper. In turn, the sales tax is then paid through an online payment system with the State Board of Equalization.
The first two months of the quarter are paid as estimates with a final statement of full accounting for the third and final payment for the fourth quarter. It is important to stay on top of this as the dollars can add up quickly. I have been audited, and my certified public accountant represented us, so it was pretty painless.
Jeff Claypool opened his first retail store with his dad in 1981, when the two began a pool supply, service and repair shop. By 1982, they had added their first portable spas, and with the addition of the Hot Spring brand soon launched into the spa business full time. Tens of thousands of spa sales later, the company is thriving in the Southern California market. Claypool’s sons, Garett and Spencer, joined the business after they graduated college in 2014. Claypool claims he never intended to bring his boys into the business, but their instinct, enthusiasm and ambition made them a perfect fit. Between his sons and their sister, Ricci (not in the business) and soon-to-be six grandchildren, Claypool and Karyn, his wife and business partner, never have a dull moment.
Founder and President
6 locations in Los Angeles and Ventura Co.
I learned at a conference last November that there are over 12,000 tax codes in the U.S., and they change frequently. The sales taxes in the U.S. are far more complex than here in Canada.
In Quebec, it’s very simple. We charge the federal sales tax, GST at 5%, and provincial sales tax, QST at 9.975%, giving a total of 14.975% sales tax. That’s it.
If you’re buying a product in Quebec, this is the tax you pay even if you’re not a resident. The only time we do not charge these taxes is for some with Indian status. To be eligible for this, they must have their Indian status card from the Canadian government and live on a reservation.
Saint-Eustache, Quebec, Canada