state florist network

[zedright]

169% correct.
Even sometimes when Im wiring out an order over the phone and the person on the other end tries to charge me sales tax, I tell them to forget it and move on to someone else. My customer has already paid the tax, why take it out again?
Then there are some florist who want to use their card but will not give out the AVS information. Why bother risking a dubius transaction?

Kim, I'm not trying to pick on you as an individual, but your previous statements are a good reason why some of us take offense of the philosophy expressed on these boards.

To quote you, "if you start allowing discounts & tax exemptions, you are opening a can of worms. Best that other florists calling your shop with a CC, give the order just as a customer would with no special treatment."

The reason there is so much flack from posts like this is that many florists don't want to follow ANY rules other then the rules they make for themselves. First of all, the tax codes in Calif for florist to florist orders are no diffierent than YOUR tax code in New Mexico or in Illinois or Michigan or Florida or New Youk or Arizona or any the US states that have a sales tax. Each and every one of these states has a portion of their code dedicated to florist to florist sending of orders and in ALL cases, the SENDING florist is ALWAYS responsible for collection and payment of sales tax and NOT the receiving florist. You have either been misinformed or lied to if anyone has led you to believe differently. In fact your state tax code relieves you of sales tax responsibility once you realize you are dealing with another florist because this kind of transaction is NOT tax exempt!

As for the discount situation, I think that is up entirely to the receiving florist. What is so silly about this whole subject is if a florist calls another florist and gives them a six digit number identifing themselves as another florist <on your team> florists are willing to extend 27-28 percent discount with no questions asked and when another florists calls and gives you a 8 digit number <certificate of registration in Ill> florists are now talking about discounts, exemptions and overcharging cc to add sales tax. In fact many florists are now committing fraud by overcharging the CC. Can you imagine what would happen if the WS started allowing the receiving florists to automatically charge whatever they wanted to on incoming orders and the sending florist wouldn't find out about it until the statement arrived?

 

[FlowerDiva]

.....your previous statements are a good reason why some of us take offense of the philosophy expressed on these boards.

To quote you, "if you start allowing discounts & tax exemptions, you are opening a can of worms. Best that other florists calling your shop with a CC, give the order just as a customer would with no special treatment."

The reason there is so much flack from posts like this is that many florists don't want to follow ANY rules other then the rules they make for themselves.

As for the discount situation, I think that is up entirely to the receiving florist.

Okay cowboys. This is my last post defending myself on this subject.

Nobody should be offended by my statements. Come on! They are my opinions and my thoughts. I am not trying to rally anybody into my way of thinking or doing business.

Yes, I believe it is "opening a can of worms" if you start allowing discounts & tax exemtions to people you don't know. OG or florist. That priviledge is only for those florists whom we have known for years and can track a consistant order record with. They fill out the proper forms, we fill out ours, and an agreement is reached. Most shops who call us asking are usually a one time order. Where's the benefit? I despise the OG's and if they can't play by wire service rules, they're certainly not going to play by mine. So, they can call somebody else and give them the headache that is sure to follow.

Now, when a shop calls me asking for discounts & tax exemptions, I politely tell them that we do not offer that service to them. If they would like to give me a sealing price I can deduct my tax from that or I can let them know how much additional the tax will be so they can inform their customer & get back to me. Most florists will make their choice and place their order with us. A few don't, that's fine. When it comes to the OG's, I give them the same options, they usually get p!ssed off and hang up. That's definitely fine with me.

And, stop right there! NO I do not deduct my sales tax from a "Wire in" order. I play by Teleflora's rules. So don't mistake me for "one-of-those-shops".

As far as the Sales Tax issue, I will talk with my accountant, get the facts, and compose a new thread. But, keep in mind, with tax laws changing as often as they do, it's not worth the risk. Most IRS agents aren't familiar with florist to florist kind of stuff. Sh!t, it's hard enough to find an accountant and bookeeper who are! You should have seen the arguements between our accountant & the IRS guys during a random audit 10 -12 years ago! The auditors just didn't get the Wire Service junk. Was there profit, wasn't there? How come your taxing out, but not taxing in..... It went round & round for weeks! And, keep in mind that's when we were FTD, Teleflora, AFS, and Redbook! Now we're down to just one. Less confusion for us, our accountant, and the Tax man.

Look, no hurt feelings, you run your business your way, I'll run it mine. I certainly did not intend on offending anybody, and I sincerely apologize to those of you who took it that way. Y'all can be way too nit-picky sometimes, relax. Life's to short to get worked up over what somebody says or didn't say. I thought the purpose of this message board was to share ideas and experiences. But some of you prefer to miscontrue one's words in order to criticize. That disappoints me. I thought that I had found an outlet to share, but if I have to watch what I say, maybe this isn't the place for me.

Ciao! See ya on a different thread..... maybe. I'm tired of gettin' bashed on this one.

 

[CHR]

I thought the purpose of this message board was to share ideas and experiences.

It is. And sometimes ideas get challenged and the exchanges, if respectful and healthy, makes us all learn and grow. Questioning someone's statements aren't necessarily bashing or criticizing although al least one could better learn to curb the envy and bitterness.

Griff's points about florist to florist sales tax issues are correct. And you are correct as well in that auditors can make your life a living hell as you try to educate these taxpayer-funded employees as to their own darn rules.

Some florists have completely opted out of the WS system and believe everyone else should, too. They are making a stand and are frustrated that other florists won't follow suit. (I feel certain that if more did, the WS might pay more attention to what florists have to say.) I can understand their frustration but also see why numerous shop owners have expressed their beliefs in the benefits of being WS members.

Each florist must make the choices best for their own businesses. This board is a good tool to help us explore all the options and angles possible to make the most informed choices.

I'm glad you contributed to this thread.

 

[FlowerDiva]

Thank you Cathy!

I just got so frustrated yesterday and was tired of going round and round. I did feel the need to defend myself but had to put a stop to it. I couldn't explain it any more ways than I did. (Well, actually I probably could....) I just felt that this thread got out of control & would never end! Aaack!

I see everybody's point & everybody's reasoning. I just plain got tired of explaining mine.

I agree, the wire services are not for everybody. At times, I wish we didn't have to have one. But, until there's a crystal clear solution to the alternative, we will stay. And, until tax laws are cut and dry...... which will probably never be, we will stay doing what we know best to stay of the IRS' auditor's list.

Thanks again for jumping in!!! And, shedding light on the two sides of the arguement. I felt that there was no wrong answer, just different ways of looking at it.

 

[hcflorist]

First of all, the tax codes in Calif for florist to florist orders are no diffierent than YOUR tax code in New Mexico or in Illinois or Michigan or Florida or New Youk or Arizona or any the US states that have a sales tax. Each and every one of these states has a portion of their code dedicated to florist to florist sending of orders and in ALL cases, the SENDING florist is ALWAYS responsible for collection and payment of sales tax and NOT the receiving florist. You have either been misinformed or lied to if anyone has led you to believe differently. In fact your state tax code relieves you of sales tax responsibility once you realize you are dealing with another florist because this kind of transaction is NOT tax exempt!

With all due respect, our State Department of Revenue says differently. And since they call the shots in our state, and they have the power to cost us a lot of money if we don't play by THEIR rules, I think we'll continue to play by the rules as THEY have plainly laid them out for us to follow.

You're right with respect to florist orders given to us for which we are to receive payment from a third party wire service. You're WRONG (according to our local and state revenue offices) about orders placed directly by a florist with another florist. And they've got very good reasons for differentiating between the two which I totally agree with. After all, anybody who calls in can CLAIM to be a florist to get out of paying a little bit of sales tax. And many non-florists would do just that. We've certainly had non-florists try that over the years.

Our state requires us to have ON FILE a MERCHANT'S CERTIFICATE properly executed by any sending florist who wants to give us an order without being charged sales tax by us BEFORE the sale is consummated. In this state, if we don't obtain the Merchant's Certificate (or an exemption certificate for non-taxable entities) PRIOR TO THE SALE, somebody's legally responsible for paying our state sales tax on whatever is sold, regardless of who it's sold to. And since the state is going to require us pay the tax if we do NOT have the proper certificate (along with a big old penalty and interest charge), that's just the way we'll operate, thank you very much. If you can't give us a certificate . . . don't even ask cause tax will come out of and be reported and paid on the order one way or the other.

I'll agree that it's a hassle. That would be why we don't deal with tax on outgoings. We, in fact, TELL the filling shop that they're to charge the tax cause we're giving them the WHOLE SALE. That also might be why we've never had the problem calling orders out direct that some are having. Only thing we get out of it is our separately charged tax-exempt service charge for handling the placement.

Works for us. Not telling anybody else how to operate and I don't claim to be an expert on tax law. But I am pointing out that Griff, despite his research and efforts, is WRONG in his opinion about florist to florist direct order taxes in OUR state according to the people who make and enforce those laws in our state. Anybody contemplating florist to florist direct would do well to consult THEIR tax authority instead giving much credibility to what is said on the boards. After all, too many boardies have an "agenda" of one kind or another.

 

[Griff]

Tax laws

I think it is important to note that tax laws on the subject of florist to florist transfer of orders ARE clear. These rules or laws or tax codes, or however you want to refer to them, where put in place over 100 years ago by the founders of FTD. These laws were put on the books FOR the FLORISTS and to be used BY the FLORISTS so they could send orders to each other. They were written so that every state gets treated fairly and gets their fair share of taxes. Although the original codes where written for FTD florists, any WS that was created at a later date has been able to follow the same path for sending orders, yet these laws give no limitations. It does not matter whether you were a member of AFS, TF, Redbook, whomever and it doesn't matter if you are part of a membership of 30,000 or 20,000 or just 2. Any florist is allowed to send orders to any other florist as long as they follow one simple rule - the sending florist always collects and pays the local sales tax. It is also important to know that THIS rule or law will NEVER change, because if one state decided to change, every state would have to change and that's not going to happen. Every state gets treated fairly.

The simple reason that orders going out get charged sale tax is the sending florist is the only one to know what the local tax laws are. Yes, tax auditors can be a pain in the butt, but THEIR job is try and get as much tax paid as they can and our job as business people is to make sure we pay no more than our fair share. Knowing the law is how we make sure we are paying only what is owed. I too have gone through an audit and found that the tax people will always try to take advantage of the little businesses as it is easier to intimidate. However, knowing the difference between florist to florist business and tax exempt business and how you handle it within your own shop always stops them cold.

 

[BOSS]

With all due respect,

You're right with respect to florist orders given to us for which we are to receive payment from a third party wire service. You're WRONG (according to our local and state revenue offices) about orders placed directly by a florist with another florist. And they've got very good reasons for differentiating between the two which I totally agree with. After all, anybody who calls in can CLAIM to be a florist to get out of paying a little bit of sales tax.

Now were getting to a point that could be the whole problem...tax laws were written way back when, with the transfer of orders based on the 1910 beginnings of FTD...hence orders transmitted via a WS are covered in the tax laws...

Not being one to read tax law in my spare time, I don;t know if there is any difference made or implied between orders transmitted via WS and F2F...but I can see where the problem could arise...

 

[CHR]

I believe FTDA worked to get these tax laws in place, way-back-when.

The WS's are supposed to qualify their members and maintain reseller numbers so they provide a one-stop-shop for order exchange.

F2F orders are covered by state law but the onus will always be on the filling florist to prove that the sending florist was a legal business entity that qualified for the resale exemption. A state agency would be very unlikely to question transactions taking place through bonafide networks. Plus the networks should have the proper documentation for any member.

Any florist may be required to prove that an F2F order was transferred to them by another real florist and short of having a resale slip on file, if audited, the filling florist may still be held liable for the tax unless they can prove that the sending florist qualified for the exemption.

Yes, a shop could go back and request the documents, but what happens if the sender is out of business? After all, an audit can go back seven years.

Not saying this to stir the pot, but F2F outside of any network has its potential downside. For those that wish to be free of traditional WS's, IFA seems to provide the structure to pre-qualify florists and avoid potential tax problems.

Not sure if Canada has an equivalent group or similar issues.

 

[PhillyPhlorist]

I am by no means an expert on Tax law, but I do know that FTD & TEL have filed with EACH state paperwork allowing florists to transfer orders tax-free (as long as the tax is collected by the originating florist) via Interstate Commerce and the Clearinghouse. Now, I have NO idea if what Griff said is true to a florist to florist direct order. I know that a while ago, my accountant said that ANY tax-free transaction had to have paperwork behind it for audit reasons...FTD & TEL are done (as Griff said). But, my Church and Charity accounts each have a tax exempt form on file and marked TE (tax exempt) in the system. But what about these direct florist orders???

I see where it is double taxation, and what Griff says below SEEMS quite logical! However, to the PA & Philly tax-man, it may not be so cut and dry! (especially the Philly ones...tough cookies I tell you...)

We get so few direct orders, it is not worth the time right now to have our accountant dig through the tax law for the state of PA and the City of Philly. For now, we WILL charge you our state and city (1%) tax on direct orders. We have been audited a few times over the 97 years we've been in biz, and it is NOOO fun picnic. Unless we can find in writing SOMETHING about this in our state's tax law, we will treat any direct order as any retail customer.

What else is there to do???
Hmmm... Maybe this is someting SAF could get into...???

- Herb

 

[Frank]

FlowerDiva - You hang tough girl!

Thank you Cathy!

I just got so frustrated yesterday and was tired of going round and round. I did feel the need to defend myself but had to put a stop to it. I couldn't explain it any more ways than I did. (Well, actually I probably could....) I just felt that this thread got out of control & would never end! Aaack!

I see everybody's point & everybody's reasoning. I just plain got tired of explaining mine.

I agree, the wire services are not for everybody. At times, I wish we didn't have to have one. But, until there's a crystal clear solution to the alternative, we will stay. And, until tax laws are cut and dry...... which will probably never be, we will stay doing what we know best to stay of the IRS' auditor's list.

Thanks again for jumping in!!! And, shedding light on the two sides of the arguement. I felt that there was no wrong answer, just different ways of looking at it.

FlowerDiva, Do not let some of the more "aggressive posters" here cause you any disenchantment. Your postings are interesting and informative! I have been here since the creation of FlowerChat and have seen it all and let me tell you, one of the worst things to happen is that florists feel they do not want to share anymore because others have been too harshly critical, cynical, or terribly misinformed. Please continue to engage and participate! There are many who visit FlowerChat and do not post - though learn from those of us who do. We need each other! Our industry is under tremendous stress and this board is one venue for us to help each other deal with the challenges of today.

 

[Victoria]

Well said Frank.

V

 

[FlowerDiva]

Thanks Frank & Victoria! Your encouragement is greatly appreciated!!!

 

[Griff]

It gets worse, not better

First of all, any wired order is "pre-taxed", for lack of a better term, and orders from churches, schools, etc are tax exempt! Pre-taxed is just exactly that. The order was taxed at it's place of origin by the sending florist. Tax-exempt means that NO tax will ever be charged, collected or paid on that order. It is because of the NO TAX situation and and some orders being tax-exempt that florists have to keep file records on those specific orders. The state wants to know why no tax was collected. The proper tax exempt paperwork allows the state to verify why there was no tax collected. Any auditor will assume you know the difference until YOU prove them wrong!

Any order from another florist, is NOT tax exempt. The sending florist is responsible for charging the local customer the appropriate sales tax, collection of the tax and the payment of that tax. That's how it works when you are a part of "any association established for the purpose of deliverying flowers." It does not matter whether you are talking about FTD, TF, 1-800 or ANY INDEPENDENT FLORIST NETWORK. We will use the following North Carolina tax code for an example.

"Section 9-2 Florists Delivery Associations <North Carolina Sales Tax>
The tax due on tranasctions conducted through a florists' delivery association
shall be collected and remitted to the Department pursuant to the following:

1. On all orders accepted by a florist within North Carolina and relayed to another florist within or outside the North Carolina for delviery within or outside North Carolina, the florist initially accepting the order must collect and remit to the Department the 4% State tax on the total sales price. Service charges and relay charges to the customers in connection with such orders are exempt from tax provided the charges are separatedly stated in the vendor's records and on the invoice given to the customer at the time of the sale; otherwise, the total sum received from the customer who placed the order is subject to tax.

2. A North Carolina florist RECEIVING orders from other flroists within or outside North Carolina is not liable for any tax on the receipts which he derives from such transactions."

All states which charge local sales tax have a portion of their local tax code which states this so florists can send orders to other florists. Some florists will contend that the first paragraph which states "transactions conducted through a florists' delivery association" is the key and that is why only WS have the ability to do this type of transaction. WRONG! When these codes were written, only FTD exsisted. Today there are no associations <exception IFA> and this type of transaction isn't limited to just florists because grocery stores are sending orders to florists and non-florists <OG> are sending orders and all are covered under this umbrella. The truth of the matter is any time a florist contacts another florist to ask the receiving florist to fill and deliver an order, they have formed an association with the purpose to deliver flowers and it is covered under this tax code. If the receiving florist has any doubts, they should always include the sending florists tax certificate number and state of origin. I honestly do not see any advantage to FAXing copies of certificates because these certificates only apply to the state they were issued. Quite frankly, if you have the certificate number, the sending florists phone number, their cc number with address and zip code verification and cv number, you have more information on that independent florist then you have from people sending your orders through the WS system.

And one last thing. The certificate information that each florist has on file with the WS has nothing to do with tax exemption on allowing florists to send orders to other florists. I don't know where that idea came from, but it is pure poppy-cock. The WS have that information for the same reason the wholesalers have it - to keep track of you as a retailer. If the wire service sells you anything where tax will not be collected by you the florist, such as selection guides or ad literature, then they must charge you sales tax and they have to have those numbers on file just like the wholesaler.

I apologize for taking so much time on this subject, but felt it deserved the coverage based on the comments that were being posted. For people that still don't understand and want to charge sales tax, I can honestly say the independents like myself would rather have you tell us up front that you are going to charge sales tax and allow us to take our business else where as versus having you overcharge the CC.

 

[FlowerDiva]

California laws are different & it should be checked out by your accountant as to different states & their laws.

My accountant & I did some checking. We were wrong, we admit. Again, it is due to how confusing this business can be. We were both under the assumption that tax was to be collected from the point of delivery. Well, that's true. But, not for florists. Not California florists anyway.

See the new thread I posted that is copied word by word from Sales & Use Tax Regulations. Keep in mind...... this only California's Law. You must check out the law that applies to your specific state or country.

That doesn't mean I'm not going to back down from my previous statement regarding taking an credit card order from an OG. I'll give them a hard time, and make it as difficult as possible for them, I have no problem with doing that. But, if any of you legitimate florists would like to place an order with me, I will obey our tax law. But, no "steep" discounts, I can't afford that if you are only going to call us one time! lol ;-) But, if you mention you belong to FlowerChat, I will extend a courtesy discount to you.

 

[zedright]

Correct me if Im wrong, but I believe 'florists' are the only industry that have sales tax that is uniformly reciprocal in ALL states, dating back to 1910. Its not just CA, its the tax on the point of sale is the same in all states.

My accountant & I did some checking. We were wrong, we admit. Again, it is due to how confusing this business can be. We were both under the assumption that tax was to be collected from the point of delivery. Well, that's true. But, not for florists. Not California florists anyway.

See the new thread I posted that is copied word by word from Sales & Use Tax Regulations. Keep in mind...... this only California's Law. You must check out the law that applies to your specific state or country.

That doesn't mean I'm not going to back down from my previous statement regarding taking an credit card order from an OG. I'll give them a hard time, and make it as difficult as possible for them, I have no problem with doing that. But, if any of you legitimate florists would like to place an order with me, I will obey our tax law. But, no "steep" discounts, I can't afford that if you are only going to call us one time! lol ;-) But, if you mention you belong to FlowerChat, I will extend a courtesy discount to you.

 

[FlowerDiva]

Taxes are not my business, so I cannot & will not interpret this law. I still feel that it is best if everybody checks their laws in their owns states. It may be universal, but that is not for me to say.

 

[Blue Oyster Cult]

Ya know what Sher?

You recently mentioned that you were leaving the floral industry and going back to automotive parts sales.......I think that is what I remember you saying. Out of curiosity, does that industry offer discounts, no tax sales, etc. Just curious if the floral industry is the only one that has business to business requests like this. How are the sales in your new career going?
Seems like you are here now more than you were before.....interesting input you offer. Always like to hear a different opinion............

Sher, Family business is going strong it's just ME of the puzzle who left the daily operations to persue what the heck I went to College for on my parents money. I did my dues in my 'career' and left for a few years to help Mom out. No I'm not an Auto sales man...Electronic Technoligist living in an Automotive City with many opertunities.

I cannot leave here and not see what you FRIENDS are talking about...Different prespectives to say the least, it's kind of nice to look from the outside-in.

 

[bloomz]

:newbie Me I don't care, I live in Oregon.

 

[BOSS]

"Section 9-2 Florists Delivery Associations <North Carolina Sales Tax>
The tax due on tranasctions conducted through a florists' delivery association
shall be collected and remitted to the Department pursuant to the following:

Griff, playing "Devil's Advocate" here....does the woird "Association" have any bearing on this ruling? Ie: are florists that are NOT members of any "association" treated differently?

Oh, and no need to apologize for time and space spent on this one, as it seems to be a point needing much clarification within the industry...

 

[Griff]

The word "association"

To answer your question, Mark, "are florists that are NOT members of any "association" treated differently", the simple answer is NO!

Many have tried to interpret that single word, "association", as meaning that one must belong to an association or group before they can send orders and not be taxed. Because these rules or laws were created by the founders of FTD, they are referred as the rules for FLORISTS' DELIVERY ASSOCIATIONS. These laws DO NOT refer to wire services, but to associations which FTD was in the beginning. TF, AFS, Redbook and all the rest were never associations. Even FTD is no longer an association. An association is defined as any number of people of companies and are joined together in a common thought or cause or purpose. There is no legal number of people or companies required to form an association. It can be any number of 2 or more. At one time in the conception of any of any WS, there were only TWO members. A legal "association" is formed any time one florist contacts another florist for the purpose of having flowers delivered. In other words those two florists are meeting the legal intent of this law and should follow all the aspects of the respective state law concerning f2f orders.

As for Cathy who said, "f2f orders are covered by the state law, but the onus will always be on the filling florist to prove that the sending florist was a legal business entity", I strongly disagree. The second part of this law which states that the receiving florist is NOT responsible or liable for any tax on the receipts of those incoming orders and that clearly indicates there is no recourse by the state to that receiving florist. However, if you, as a florist take an order from an organization that claims to be tax exempt and you do not charge sales tax because that customer said they were tax exempt and you didn't do the proper paper work and it later proves they weren't tax exempt, the state has every right to make you, the florist pay the tax and penalty. That is the difference between "pre-taxed" wired orders and tax exempt orders. I'll say this again, by law, the receiving florist is never responsible for collection of tax on "pre-taxed" f2f orders whether they come through a ws or just two florists on a cc. These laws have nothing to do with being paid by a third party.

As for the contention that someone might call a florist and pretent to be a florist just to get a tax break, that's really Bogus. If we have this much trouble convincing other florists how this tax system works, what's the chances that the every day consumer can figure it out. And who else is better qualified to determine if the sender IS a florist other than another florist. The sending independent florist has to give you his or her certificate number and the average consumer is not going to have one as well as the name of their shop and their telephone number along with all the CC information. That's far more information than you get from any florist within the WS and you only get the 6 digit number to prove they are legitimate and we already know that number is no guarantee they ARE a florist. It is only up to the receiving florist to file those closed f2f orders as wired orders and NOT tax exempt orders.

Sorry again for taking so much time on this subject as I'm sure the Canadians probably all fell asleep during these discussions.