Great article from on Business IT:
Great article from on Business IT:
Sorry this took so long to post! Last week was a blur of jet lag and my 4 year old repeating “Momma, lookit me! Momma, watch me!” over and over.
Oh Melbourne; I’ve never fallen in love with a city like I did with you. Not to take away my experiences in Sydney and Adelaide, but the CITY itself? I adored it.
As with our previous groups, the attendees in Melbourne were a joy. A little chattier than Sydney, not as raucous as Adelaide, but just as wonderful a group as both.
We had the first 2 Certified ProAdvisors at training in Melbourne: Diane Lucas and Lauretta Finis. It was great to hear their feedback on what they loved about the product vs what needed some work (much of it centered around fine tuning GST, and we made sure to let the product development team at Intuit know).
Diane helped with the presentation by doing the GST portion and offering many helpful hints in dealing with reporting and lodgment of the BAS; and Lauretta yet again came to my rescue by helping me with the GST vs Sales Tax post I did before leaving Oz. (Thanks also to Diane for the assist on that one!)
There also seemed to be different types of questions than the other cities. Sydney seemed to ask more about how the product worked, while Adelaide was just ecstatic to see a brand new online offering (as I mentioned before, most of them had never seen the product at all), and Melbourne seemed to have the most experience with it and offered many suggestions on what they would like to see – in regards to new features and improvements to existing functionality.
I feel like I’m beating a dead horse here, but the recurring theme of the trip was so wonderfully prevalent again – the similarities were more than the differences.
I had a chance to be interviewed by the lovely Sholto MacPherson of Box Free IT, and am currently in the process of working on some training videos and blog posts for William Maher of Business IT. So exciting!
One last quick comment – we had our CLOSEST game of QBO “Jeopardy” in Melbourne. One of the days it came down the very last question. Such a blast!!!
The other day I posted a comparison about Australian payroll, and I thought another good topic would be Australian GST and US Sales Tax and how they fit in to what has become the theme of this trip – that we’re the same but different.
Australian GST (Goods and Services Tax) is a broad-based tax on most goods and services that are consumed or sold in Australia. The rate is 10% on most items, but there are a few other rates; without getting too into detail, these are dependent upon the industry involved. This value added tax is federally mandated – there is no state or local GST in Australia.
In the US, we have our many varieties of Sales Tax – no federally mandated system – each state has the right to either require a Sales Tax on goods and/or services or delegate authority to local governments to require one or more Sales Tax on designated items.
Both GST and Sales Tax may have exceptions, and these exceptions may apply to the entity buying (both include various not for profit entities such as schools or churches) products or services, as well as items (such as food or services, like childcare).
I’m going to speak in detail about Michigan Sales Tax, because that’s where I live and happens to be the sales tax with which I’m most familiar. We don’t have local sales taxes, just a state wide 6% sales tax on most retail products, but not services.
When it comes to registering for either, the requirements are a bit different as well. In Australia, businesses must register for GST if there is a turnover or revenue of $75,000 or $150,000 for not for profits. In the States, each Sales Tax agency has different requirements – for instance, in Michigan, if you’re selling any taxable product, you need to register and pay.
The payment schedule differs slightly – most businesses are required to pay quarterly, but if the revenue (or tax liability owed if in Michigan) reaches a specific level, the requirement is moved to monthly. In Michigan, if the liability is $750 or lower, annual reporting & payment is all that is required. In Australia, the payment must be made monthly if the turnover is over $2 million, but the ATO (Australian Tax Office) may also require others to report monthly, and some business may elect to do so for cash flow purposes.
If the business GST turnover is less than $20 million and the ATO has not informed them that they must report GST monthly, they report and pay GST quarterly.
If you report and pay quarterly, you have three reporting options:
Option 1 work out, report and pay GST quarterly –
Option 2 work out, report and pay GST quarterly and provide further information annually in an annual GST information report
Option 3 pay a GST installment amount quarterly and report annually in an annual GST return.
You can only choose option 3 if you meet some eligibility criteria
Diane explains due dates:
“Payments for monthly lodgements is always by the 21st of the following month. Quarterly payments are due by the 28th of the month following If lodging a paper lodgement. An extra 14 days is available for lodgement and payment if the client has an ATO portal sign in. Tax and BAS agent* have an extra 14 days on top of this again.”
Lauretta also added that the December quarterly (Q2 in Australia) isn’t due until February due the Christmas/Boxing day holidays. Now THAT is nice, I don’t any sales tax agency that allows for that in the US!
The last thing I want to mention is the source documents related to GST are important to BAS Agents. Lauretta explains that they are required to “sight the source document to process the correct amount of GST i.e. most insurance’s – registrations – some bank fees – are not the full 10% GST amount as there may be Stamp Duty and this does not attract GST – so to ascertain what is the correct GST amount we do need to sight the documents.”
Diane stated that relevant source documents must be kept for 7 years in a format that can be reviewed.
In the US, we are required to have a PTIN to be able to submit payroll payments and reports for our clients, but currently in the state of Michigan, there is no requirement for bookkeepers to be able to schedule Sales Tax payments on behalf of their client, and while we all inherently review documentation related to sales tax, there are no sight requirements for source documents.
I think the US is quite a bit more complicated because each state can have a tax, or allow each local government to have a sales tax – for instance, Arizona calls it a Transaction Privilege Tax (TPT) and may not collect a tax on behalf of every city, so these “non-program” cities may be able to collect their own rates, and each one can differ and are payable to the city directly. I love the idea of using a program like Avalara.com to help my clients manage doing business in multiple states.
At the end of it all, as with payroll, I think the similarities are more important to point out; it’s just the small details where we differ.
*BAS agents are registered with the ATO as someone that has a license to give businesses advice about obligations, may prepare and lodge (file) forms and may submit payments on behalf of their clients. Diane mentioned that BAS agent requirements are a minimum Certificate IV in Financial Services (Bookkeeping or Accounting) and 1400 hours experience over a four year period. There are strict guidelines for BAS Agents as well, set out by the Tax Practitioners board, and each must be registered to provide BAS Services.
Thanks so much to Lauretta for helping me with this blog. I couldn’t have done it without her answering what surely seemed like thousands of questions!
The game gets competitive, and it was my favorite part of every day. Great way to end, with everyone laughing & trying to win.
The first two Certified QuickBooks ProAdvisors in Australia, Diane Lucas & Lauretta Finis
Day 3 in Melbourne