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Dear Customers: PLEASE READ!
9 months ago
We received an important correction regarding how sales tax is collected in the State of Maine. In 2023 we had email correspondence with a tax professional indicating that digital sales of goods, like digital artwork, are subject to sales tax in the state of Maine. We understood this to mean we need to be charging sales tax on our projects to everyone.
We've done further research and called another tax professional in our state. He clarifies:
"Based on the phone conversation we had this morning, the artwork you are electronically sending to customers outside the state of Maine is not subject to Maine sales tax. Sales tax is a destination based tax and is based on where the customer takes possession of the goods. If the customer receives goods outside the state of Maine, then it is not considered a Maine sale."
He said the same during our phone call. I just asked him to email us the same for our records.
As a result, almost all of the sales tax we collected through 2024 will be refunded to our customers. This money has been sitting in it's own bank account and is ready to be returned to you.
Lofiflavors has kept detailed records of all of our transactions, including sales tax amounts. The only difficult part is that this will take time to send out all of the individual refunds. Because so many of our customers buy multiple things from us, Lofiflavors wants to refund people in large lump sums, rather than potentially 10 individual refunds per person in some cases. This process will take a bit of time due to the tedious nature of it. He currently estimates this process taking about a month and a half because we can only work on it during weekends (our days off). If we can determine a way to speed up this process, we will inform you all!
Moving foreword our projects will not be subject to sales tax (unless you live in the state of Maine, it seems!) We're very sorry for this confusion. Digital sales and sales tax has turned out to be a very difficult thing to fully unpackage and understand; we definitely thought we were being responsible and diligent with our business and making the right calls.
But there is good news! As a result of our sales not being applicable to sales tax, our commission prices will ultimately be cheaper to the customer, too.
We appreciate your patience as we work this out!
We've done further research and called another tax professional in our state. He clarifies:
"Based on the phone conversation we had this morning, the artwork you are electronically sending to customers outside the state of Maine is not subject to Maine sales tax. Sales tax is a destination based tax and is based on where the customer takes possession of the goods. If the customer receives goods outside the state of Maine, then it is not considered a Maine sale."
He said the same during our phone call. I just asked him to email us the same for our records.
As a result, almost all of the sales tax we collected through 2024 will be refunded to our customers. This money has been sitting in it's own bank account and is ready to be returned to you.
Lofiflavors has kept detailed records of all of our transactions, including sales tax amounts. The only difficult part is that this will take time to send out all of the individual refunds. Because so many of our customers buy multiple things from us, Lofiflavors wants to refund people in large lump sums, rather than potentially 10 individual refunds per person in some cases. This process will take a bit of time due to the tedious nature of it. He currently estimates this process taking about a month and a half because we can only work on it during weekends (our days off). If we can determine a way to speed up this process, we will inform you all!Moving foreword our projects will not be subject to sales tax (unless you live in the state of Maine, it seems!) We're very sorry for this confusion. Digital sales and sales tax has turned out to be a very difficult thing to fully unpackage and understand; we definitely thought we were being responsible and diligent with our business and making the right calls.
But there is good news! As a result of our sales not being applicable to sales tax, our commission prices will ultimately be cheaper to the customer, too.
We appreciate your patience as we work this out!
Hope that karma pays off for you.
I may have no other choice than to tip you again
if you're legally allowed to, please keep mine as a tip!!
Great job doing the diligence!
Also, because you are doing your work from home, make sure you add the percentage of the room used for doing work + renters or home insurance + power + internet and the percentage of cell service (if you use it for work) that you use and any equipment or supplies you bought for doing artistic ventures overall unless your standard deductions are higher than your itemized deductions.