You might know about some of the income tax advantages of getting married. However, have you considered how state sales tax laws may impact your wedding?
You might not, at least until you receive an itemized list with vendors containing this added expense. Learning about sales tax laws before your big day is a good idea.
Sales tax law is complicated, even if you specialize in such work as an accountant. Every state has different rules. Unless you’re in one of the five states that don’t have a sales tax and use enterprises based in-state, you will encounter this itemized charge on your vendor’s bill.
States cannot require out-of-state businesses to comply with their laws. However, what makes the matter even more confusing is that enterprises selling products in multiple states or online may have nexus, meaning they’re nevertheless required to collect this fee. For example, your wedding is in Washington, but you hire an Oregon photographer. You might get sticker shock when you get their bill if you thought you were exempt.
Furthermore, some states apply sales tax to select professional services, not only goods, while others do not. Check with your vendors if you have concerns about how this will impact your total budget.
Sales tax will appear on your itemized bill from your vendors. You don’t have to do anything special except pay what you owe.
What about receiving high-ticket items? For example, a well-meaning relative purchases you and your beloved a new car for your wedding day. Could you get hit with the sales tax bill?
In general, your relative will pay this fee when they purchase the vehicle, and many states have exemptions from sales tax for gifts to family members. However, you’ll still need to check with your local DMV to be sure — you’ll need to register the vehicle in your name, anyway.
If your state taxes services, this fee will appear on your itemized bill. However, two tax tricks may help you save money on your year-end filings.
One is through the state sales tax deduction. Those who itemize can claim up to $10,000, $5,000 if married filing separately.
Another is through charitable deduction for your church or nonprofit venue. In general, you can’t deduct wedding fees. However, if you offer to pay your church a bit more to waive the usual price, you can claim the cost as a charitable deduction on your income taxes.
State sales tax laws can impact how much you pay for your big day. However, a bit of savvy can save you cash. Follow these tips to stay within budget.