1. What is the Purchase Deposit Sales Tax (PD Tax)? The PD Tax is a new line item that will appear on auction invoices starting January 31, 2025. It applies to the Purchase Deposit amount and is calculated based on the address of the facility.
2. Why is the PD Tax being added? The Purchase Deposit represents services rendered to the facility by StorageTreasures, and in certain states, these services are taxable. Adding the PD Tax ensures compliance with state tax laws.
3. How will the PD Tax be calculated? The tax will be automatically calculated using a tax compliance service, based on the sales tax rate where your storage facility is located.
4. How will this affect buyers? Buyers will pay the PD Tax along with the Purchase Deposit directly to StorageTreasures after the auction concludes. Both amounts will then be deducted from the total the buyer owes at the facility.
5. Which states require the PD Tax? Currently, 17 states mandate sales tax on the Purchase Deposit. If your facility is not in one of these states, the invoice will reflect no tax due at this time. This might change in the future, without notice.
6. Will this change how much buyers pay at my facility? Yes, the PD Tax will also be deducted (together with the Purchase Deposit) from the total amount the buyer owes at the facility. You may need to adjust your internal processes or accounting systems to reflect this deduction.
7. Do I need to update my Property Management Software (PMS)? Depending on your system, you may need to update PMS settings to accommodate the PD Tax deduction. We recommend consulting your software provider or tax professional for guidance.
8. How does this change impact reconciliation? If the PD Tax isn’t properly accounted for, there may be discrepancies in the amounts collected at your facility. Updating your processes will help prevent reconciliation issues.
9. What if I don’t want to update my internal processes? If you prefer not to make these adjustments, StorageTreasures offers alternative solutions, including moving to a monthly subscription model. Contact us to learn more.
10. How can I prepare for this change?
- Review your internal processes and PMS settings to ensure they reflect the PD Tax deduction.
- Consult with your accounting or tax professional to ensure compliance and smooth reconciliation.
- Reach out to your Business Development Manager (BDM) or Account Manager for additional guidance.