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Ellen
Ellen, Tax Attorney
Category: Tax
Satisfied Customers: 36714
Experience:  25 years of experience helping people like you.
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I am a golf professional in illinois and have a contract with

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I am a golf professional in illinois and have a contract with a golf course to operate the course and to own and operate the pro shop retail sales, which I have a registered Retailers Certificate Number with the state of Illinois. I am payed a salary, recieving a W2, and receive a 1099 form for the sales in the pro shop that I own and purchase all of the merchandise for. I currently pay the sales tax for the merchandise sales, but my GM and board pres are worried about the clubs liablities for the sales tax. They want to see my sales tax reports for the past 3 years. Do they have to worry about their liabilies with my sales tax and can they force me to show them my books?
Submitted: 5 years ago.
Category: Tax
Expert:  Ellen replied 5 years ago.
Welcome!

I am an attorney with 25+ years of legal experience and am working diligently on your answer while I await your response.

Please tell me:
Since you are the owner of the golf shop, who is giving you the 1099?
Does your contract state that you will provide the club with copies of the sales tax reports?


Thanks!
Customer: replied 5 years ago.
The golf course owners association, because the pro shop collects the moneys for both Greens Fees, Carts and my pro shop sales including the sales tax on my merchadise which is included in the 1099. My contract does not state that I provide copies of the sales tax reports.
Expert:  Ellen replied 5 years ago.
You do not need to provide copies of the sales tax reports since your contract does not require that you do so. However that said, the Golf Course Owners Association could be held liable for unpaid sales tax since their entity is collecting the sales tax and delivering it to you for reporting and payment
Customer: replied 5 years ago.
Could I have them pay the sales tax and eliminate all of their worries and how would that work if I have a separate sales tax certification number from theirs. Does it matter that the pro shop sales are under my business name.
Expert:  Ellen replied 5 years ago.
Yes you could have them pay the sales tax under their own sales tax certification number. You would then close your sales tax certification number. It is confusing that the partnership sales are under your name - you could change this to be under the club's name
Customer: replied 5 years ago.
The expense and sales for pro shop merchandise are not a partnership, they are my own exclusively. The Greens Fees and Cart Fees are theirs. We just do one deposit because we share the credit card machine.
Expert:  Ellen replied 5 years ago.
Consider not sharing the credit card machine and separating the 2 businesses. The IRS may consider your activities to indicate a partnership even though neither of you intended to form a partnership
Customer: replied 5 years ago.
So the problem is the 1099 that they issue to me makes them possibly liable?
Expert:  Ellen replied 5 years ago.
yes that is correct
Customer: replied 5 years ago.
Can they pay me my portion of the deposit including the sales tax and not give me a 1099?
Expert:  Ellen replied 5 years ago.
It is not wrong to do that however from a legal standpoint you are opening yourself up to a claim that you are partners.
Customer: replied 5 years ago.
Does it change anything that I lease the area for the pro shop from them?
Expert:  Ellen replied 5 years ago.
no it does not change my answer as I understood that to be true initially --

I believe that I have answered your original question -- "Do they have to worry about their liabilies with my sales tax and can they force me to show them my books? "

My answer was -- "You do not need to provide copies of the sales tax reports since your contract does not require that you do so. However that said, the Golf Course Owners Association could be held liable for unpaid sales tax since their entity is collecting the sales tax and delivering it to you for reporting and payment"


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