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Taxes

Sales Tax vs. Income Tax

Becoming a Paparazzi Consultant opens new realms of possibility: instant cash profit, lifelong friendships, and the chance to make a difference in the lives of your customers and team members. 

But becoming a business owner can also take you into unfamiliar territory. 

​One of the most commonly misunderstood and dreaded realities of operating a small business is the matter of taxes.

 
We wanted to take the opportunity to share the distinct differences between income taxes and sales taxes and what they mean to you as a Consultant

Income Taxes

P&P 4.2 - Income Taxes: ​"As an independent contractor, Independent Consultants will receive an IRS Form 1099 (Non-Employee Compensation) earnings statement if they are a U.S. resident that has earnings of over $600 or more through the Compensation Plan paid from Paparazzi in the previous calendar year.
​
The Independent Consultant is solely responsible for paying local, state, and federal taxes on any income generated as an Independent Consultant.

A copy of all IRS Form 1099s that are generated as a result of the criteria above will be remitted and sent to the United States Internal Revenue Service for the applicable tax year.

If at any point the Federal Tax Information (name, SSN, EIN, etc.) provided by the Independent Consultant is wrong or contains an error, Paparazzi may hold all future earnings until the error is rectified within Paparazzi’s records and the correction is remitted to the IRS; in these circumstances, pending the severity of error, the Consultant may be subject to be liable for any fines incurred by excessive errors submitted to the IRS."


​Some business owners opt to pay these quarterly instead of annually.

​Your tax adviser can help you determine the best way to remit your income taxes properly. 


They issue 1099s in January, if you are to get one from Paparazzi.

Sales Taxes

P&P 8.3 - Sales Tax: ​"In states where the Paparazzi products are subject to sales tax, the Consultant is charged for the sales tax at the full Retail Sales amount at the time of the wholesale purchase of inventory.

This is intended to ensure that each state tax agency is made whole on any potential sales from the transactions of that wholesale product.

Paparazzi collects these taxes at the time of wholesale inventory purchase and remits it to the state on behalf of the retail sale that the Consultant may now have.

The sales tax is charged at the local level of the location where the order is shipped.

​Paparazzi also collects retail sales tax (based on shipping location) from customers that order online from the Paparazzi website.

This also allows the Paparazzi Consultant the option of charging their local taxes on their Customer transactions and recuperate that cost, or absorbing it into their business structure; 
while at the same time not bringing any uncovered sales tax liability on Paparazzi or the Consultant.

Paparazzi is required to remit sales tax this way."
In other words:
  • When ordering from Paparazzi, we pay sales tax on the retail value (i.e. $5 per piece of jewelry).  For example, if you buy 5 pieces of jewelry, at our wholesale cost of $2.75, totaling $13.75, you will be charged sales tax on the retail value of $25.00.
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​We will be continuously adding to this website. Please feel free to copy and share anything we have on here!​

Important Note
: We have done our best to be in accordance with the policies and procedures. 
However, if you find that something is incorrect, please email us, so we can fix it.  

Please do your own due diligence and research for questions you might have or contact Paparazzi directly for clarification.
  • Home
  • About Us
  • Training
    • Selling >
      • Step-By-Step Selling Success
      • Selling Online >
        • Social Media
        • Invoicing
        • Shipping
      • Selling In Person >
        • Home Parties
        • Events
        • Display Ideas
    • Recruiting >
      • Step-By-Step Recruiting Success >
        • Welcome
        • Step #1 - Find
        • Step #2 - Invite
        • Step #3 - Present
        • Step #4 - Follow Up
        • Step #5 - Become
        • Step #6 - Get Started Right
        • Step #7 - Now What?
      • Recruiting Tips From Elite Leaders
      • Telling Your Story
    • Team Building >
      • Step-By-Step Selling Success Email Campaign
      • Step-By-Step Recruiting Success Email Campaign
      • Opportunity Presentation
      • Team Building Tips From Elite Leaders
      • Team Challenge Ideas
  • Paparazzi Info
    • Contact Info >
      • Social Media
    • Resources >
      • Starter Kits
      • Policies & Procedures
      • Compensation Plan
      • Back Office
      • Taxes
      • Logos
      • Income Disclosure
    • Recognition Programs >
      • Rank Recognition
      • Life of the Party
      • Crown Club
      • Bling Boss Award
    • Events >
      • Convention
      • Empower Me Pink
      • Passport Vacation
      • Leadership Summit
  • FAQ