When I opened my first restaurant, a wise friend said to me “It’s not how much you make, it’s how much you keep. If it doesn’t contribute to your bottom line, you have two choices: ditch it or do it as efficiently as possible."
Sales tax falls into the “do it as efficiently as possible” bucket. Mismanagement of sales tax can be disastrous to your bottom line.
Our CEO, Pete Murray, was recently interviewed on the Grow Maine Show. The interview podcast is up online.
In this interview Pete covers a lot. Here are just a few things he talks to Marty about on the show...
This chart shows brick-and-mortar merchants’ daily sales revenue since early March and then a rolling 7-day average of those sales. The high point of the red line was on March 5th, 2020 while the low point of the red line occurred on March 31st, 2020. At that point, sales revenue had crashed by over 58% in just a few weeks. Now it’s down by 26% and steadily improving to a busy Memorial Day weekend.
As a restaurant owner during COVID-19, you are probably relying heavily on 3rd party apps (3PAs) such as Grubhub, DoorDash, and Uber Eats. With delivery likely being the vast bulk or possibly only revenue stream available to you, it’s vitally important that you understand who is responsible for collecting and remitting sales tax through these 3rd party orders.
In these unprecedented times, it’s a real possibility that many small-to-medium-sized businesses will, despite every effort, be forced to close their business and declare bankruptcy. If these businesses had used the sales tax collected prior to closing their doors to sustain their business for a time, what will happen to that debt?