Taxation details critical for business students

(Northeast State professor Dr. Gary Grau welcomes workforce professionals, small business owners, and entrepreneurial thinkers from around the region to meet and interact with his business students during the semester.)

Death and taxes.  While both are inevitable, business owners should not have to fret over taxes when they have the right information.

Charles Archer, a tax auditor with the Tennessee Department of Revenue, visited Dr. Garry Grau’s business management classes during the current academic year to talk taxes and answer questions from students/budding entrepreneurs.

Archer fielded questions about subjects ranging from 501© non-profit organizations to interstate commerce regarding tax levies from state to state. He talked about sales and use tax, the primary revenue generating source for the state.

Students take note of tax issues business owners face.
Students take note of tax issues business owners face.

“When an entity has ‘nexus’ – or a physical connection with our state – that entity is subject to our state tax laws,” Archer explained.

The state’s sales tax rate covers retail items purchased in the state.  The use tax is applied to “tangible personal property” purchased from outside the state and imported into Tennessee for use or consumption.

Grau frequently welcomes professionals from sectors of business and regulation into his classes to engage business students with real-world scenarios.

“Connecting students with the business world means bringing business world professionals into the classroom,” said Grau.  “The students’ experience must include encounters with the people they will interact with as professionals and business people.”

Charles Archer explains a few intricacies of the state tax system.
Charles Archer explains a few intricacies of the state tax system.

Cities and counties may impose a local option sales tax rate of up to 2.75 percent.  These municipal governments report the local option tax collections to the state.  Archer explained the state used a complex formula to return those local option sales tax revenues to the municipalities for use in their public administration.

The department of Revenue hosts free tax information workshops to assist small business owners encountering business-related taxes for the first time.  The department’s Johnson City regional office hosts informational workshops each quarter.  These workshop discussions can focus on business tax, sales and use tax, unemployment tax and tax enforcement procedures.  Archer noted business owners could find their best answers through the website.

“I don’t think anyone goes into a business blind today,” said Archer.  “Our department works with every small business to spell out their responsibilities for reporting taxes.”

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