USA Sales tax mistake


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so here's my situation:
my husband's business is a service business. (not subject to sales tax)
he will charge a flat fee to do a job and collect that flat fee. if he gives an estimate of $1000, he collects $1000. end of story. there is not mention, calculation or collection of sales tax anywhere during the process.
his bookkeeper last year didn't understand that services are not subject to sales tax - so when she prepared invoices for the accountant (strictly for accounting purposes not for customers to receive or see) she would adjust the figures to back sales tax out of the total. for example instead of invoicing $1000 with no tax, she would invoice like $912 + tax = $1000 total.
The accountant did not catch this. (THAT'S ANOTHER ISSUE) and filed and paid the sales tax.
MY QUESTION IS THIS
how do i correct this and have the money refunded?
so far, i'm told by the state that i must refund money then request the refund. the problem is that the money was not collected to be refunded. so what do i do?
thanks in advance.
 
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kirby

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I followed you up until “told by the state that I must refund money”. Can you explain this in a different way because you already paid the state so what refund is the issue?
 

kirby

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Reading your post again, I think the state thinks that you charged your customers for the sales tax, which you did not do. So clarify this with state and ask State again how to claim a refund of the sales tax you paid in error to the state.
 
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sorry
the general process is that i would refund the sales tax collected from customers, provide the state proof that it was refunded, then request a refund from the state.
the issue i'm having is that it was not collected from customers. they didn't pay sales tax on the service that was provided.
the mistake was that the bookkeeper invoiced it incorrectly - adjusting the numbers to LOOK like we charged and collected sales tax.
the accountant - who should have known better - filed the return and sent the 'sales tax' to the state.
how do i correct the mistake and get a refund?
 
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kirby

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Hi
I had figured out what they meant a few minutes ago. So again, explain to state what happened and how to fix. Hopefully, you get a reasonable person on the phone who gets this and is willing to help your claim for refund. Get their name and mail a letter to confirm conversation to them sent certified (cause next time someone else will step in to your case). If person not reasonable, lay out the facts in a letter and send to them certified mail to get the ball rolling. Law is on your side but the ability of some people who are there to help us to be thickheaded never ceases to amaze me. There are just a few of these folks, but that's enough to ruin your day.
 

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