Do you have to charge sales tax on tuition? Unfortunately, the answer isn’t always clear-cut. A brief run through of the basics however, can equip you to quickly find the answer and avoid legal issues.

(Disclaimer: the following is for information purposes only and is not intended to replace or serve as certified legal or financial advice. Please contact your local state to understand the laws of your state.)

Sales tax on dance tuition:

Let’s start off with the good news and remove any fear that you may have; No feds are going to enforce a sales tax on your studio operations. Whew! You may however, have to consider your state and local taxes. In some cases, the complexity of what is taxable can FEEL overwhelming.

In a handful of states, dance studios are considered places of recreation and entertainment, and not educational institutions, which means studio owners are required to collect tax on tuition. Many studio owners are UNEDUCATED on state and local taxes and therefore, often fearful they may be doing something wrong and won’t know it until it’s too late. This is easily AVOIDABLE. Stay proactive by talking with your accountant or bookkeeper about your tax obligations.

Sales tax on goods sold

You may not be classified as a retail shop, but chances are you SELL merchandise of some kind. Whether you stock dancewear, or simply sell costumes for recital season, you need to be prepared to charge sales tax if your state requires it. Another question easily answered by your qualified CPA.

Look for a simple way

While you should never be tax illiterate as a business owner, finding a simple and efficient way to ensure you are legal and up-to-date can be a time and worry saver. When you allow a team of professionals like ours at dancebookkeeping.co assist you, you can relax knowing that your POS is set up and running properly, collecting sales tax when necessary. We can even FILE your sales tax as well. You’ll never be late, and you will always know how much and on what you owe.