Deposit tax?

It depends on the state. In my state, taxes aren't charged on services.

So far, all of my deposits have been half the total amount of what the vendor will charge. So taxes were included in the deposit.

View Quoted Comment My package is $1900 with a $500 deposit. The deposit invoice shows $533 because of tax. I asked if $533 would come off of my balance and she said no...only $500 would come off because she has to pay taxes on everything she brings in

View Quoted Comment Sounds like she’s taxing in an odd way, so normally people would say their price would be $1900 + tax. So when you would make the deposit it would take $500 out of the total. However, it sounds like she is saying her total is $1900 and not counting the tax even though every time you make a payment you pay tax towards that payment.

I've never heard of a deposit tax. Did you pay with a credit card? Maybe she is actually charging you a processing fee and calling it something else?

I've never heard of a deposit being taxed unless you're using a card or something. But even then, it seems odd

If the service itself is taxed, then she's just taxing your deposit separately from the remainder of your bill. It really doesn't matter because you'll pay the same taxes either way.

So say your total bill is $1000 and the service tax in the state is 6%. You'd pay $1060 total.

If you have to pay a 50% deposit, and she's charging you $500 plus 6% tax then you are paying $530. When you pay the remainder, you'll pay the other $530.

If she didn't tax your deposit you'd pay $500 now and $560 later, because the tax is on the overall bill. It doesn't really matter whether you pay $500 and then $560 or two payments of $530, the end is the same.

It may be different than what you are used to but as long as the total ends up being what was expected and you are evenly taxed on your overall bill then its fine.

From an accountant's point of view, it makes sense. It is a little weird, I agree because most people don't do that (which the only vendor of mine charging any tax is my caterer). If she is self-employed (which most photographers are), she is supposed to pay employer and employee taxes on any income she gets. She may do it this way for everyone because some people pay deposits in a different year than they pay the remaining balance, but she would still get taxed on whatever she received regardless of when services are fulfilled.