Michelle Lynne 0:02
Welcome to design for the creative mind, a podcast for interior designers and creative entrepreneurs to run their business with purpose, efficiency and passion. Because, well, every design is different, the process should remain the same. Prepare yourself for some good conversations with amazing guests, a dash of Jesus and a touch of the woowoo and probably a swear word or two. If you're ready to stop trading your time for money and enjoy your interior design business. You are in the right place. I'm your host, Michelle Lynn.
Michelle Lynne 0:44
Hello, hello. Hello. Hello, everybody. Welcome back to the podcast. The design for the creative mind business podcast. This is for interior designers and creatives talking about the business side of it. So I'm happy you're here today. I'm excited to introduce Amy. Amy, I've already lost your last name. It's all good. It's Monroe. Thank you. Yeah, so super simple. I'm looking at my notes from like, I've got aimy aimy aimy aimy aimy aimy Monroe. So I met Amy at the design biz retreat. So if you guys are familiar with Rick compos, he's the host of the design biz Survival Guide. He has a podcast of his own. He and I are sweet, sweet friends. And Amy was one of his guests at his retreat. So Amy is an expert in all things that sales and use tax. Yes, she's been in the space for like 20 years, you wouldn't know it because she looks like she's maybe 30. She mostly worked in public accounting, private industry software development. She's been a small business owner. And she currently works for a boutique firm based in Los Angeles in San Diego. She runs the consulting arm of the practice. So in addition to all of this, Amy has been married to her husband, Brian, I'm married to Brian also. almost 20 years, she has two teenage boys and loves we're living where other people vacation. She's in Pacific Beach, California. A little jealous there. So Amy, welcome. Thank you so much.
Amy 2:11
Thanks for having me. I'm so excited.
Michelle Lynne 2:13
Oh my gosh, yes. And y'all when I met Amy, she just has this passion for helping other people's other people's ever helping others. She's not passionate, so much about sales tax is what you described, if I recall correctly, but you're passionate about helping people and sales tax is your level of excellence, your expertise. It's the career I
Amy 2:36
fell into when I was 22 years old. There you guys
Michelle Lynne 2:41
just carried you through. So it really piqued my interest when I heard you speaking one because you have such an amazing personality that I wasn't falling asleep talking about financials. Thank you, I'll take that as high praise, very much high praise. And actually in a previous life, I don't know if I shared this with you in a previous life. I used to play accounting and financial professionals on a contract or project basis. Oh, nice. So yeah, like CPAs, and the tax professionals and like CFOs, and stuff like that. And so I can truly say that finding a financial professional with a personality such as yours is a is a rare, rare mix so much.
Amy 3:21
And I appreciate that. Yeah, and you know, sales tax, I think I've never met a single person in my industry that chose it on purpose. And so sometimes I think we benefit a little bit from and I know I have red hair, but like being kind of the redheaded stepchild of the tax world, right. Like, it's super nice. There are maybe 5000 people in the country who
Michelle Lynne 3:39
do what I do. Yeah,
Amy 3:41
we are a special breed. You
Michelle Lynne 3:43
are a special breed. And just because I have, you know, reddish hair as well. I say that Red's not a color. It's an attitude. Oh, for sure. So in regards to the sales and use tax when when I first heard you speak and you broke it down, so let's say easily per se, it was easy for me to understand it. I have just finished I think it was two years ago. It was before I switched over to my my now bookkeeping company. But I had gone through a sales tax audit. Because my bookkeeper screwed things. My previous bookkeeper screwed things up. So sure. Why is sales tax so complicated for interior designers? Because, like, I don't know what I don't know, but I do know that screwed it up because interior design is so different from so many other industries. Yeah, and I will totally cut
Amy 4:33
your former bookkeeper, you know, like give her some him or her some grace because it's a it is complicated. And the reason for interior designers specifically that it gets complicated is because you're offering a combination of goods and services. And so if you think about this sort of old foundation of sales tax and you think about kind of Main Street USA brick and mortar, you know, you walk into your local hardware store and you buy a wrench right like it It's pretty clear and obvious who the buyer is, who the seller is, what you're buying, how much you paid for it and where that transaction took place. And so that's, that's how the rules were made. Right. So a lot of a lot of the current sales tax rules are sort of bends and can portions and tweaks of, of the old way. And and that's, you know, that's not pretty, but creating new legislation is hard. And so they, they, it's easier for, for the government to tweak what exists and create something new. And so when you start talking about, you know, providing services on top of the sale of goods, and you know, different locations, depending on your job site, and all these different things, it does start to kind of get complex.
Michelle Lynne 5:42
So, you just touched on something. So I'm in Texas, they have I have a job in New Mexico. Yes, actually, we do have one right there in Albuquerque right now,
Amy 5:53
we have to adjust our sales tax to accommodate for New Mexico, because that's where the goods are being delivered. Yeah. And that's where the Yeah, and that's where the service is being provided, especially if you go on site. And then that added layer of complexity, right, though, I mean, you're not going to New Mexico necessarily to do the design work, you're gonna do that in your office in Texas. And so you can start to have this argument about, Well, where did the service actually take place? And so I think, you know, keeping it as simplified as possible, and auditors know, you're not going to get it perfect. And to that end, you know, in prep for this, I was reading about an audit appeal in the interior design space. And, and the auditor got it wrong, right. So just because an auditor says, Hey, you screwed it up, don't believe them. That's, that's what people like me are for. Because I can step in and go, you're wrong. But yeah, so there is definitely this split between Well, I did all the design work and whatnot. And I talked to my client on the phone, and I did that for my office in Texas. But then if you do fly to New Mexico, and you're there, when stuffs being delivered, when you're installing draperies, you know that that kind of thing, or if you're shopping locally with that client, then yes, some of that service is provided in New Mexico, and you have to pay attention to
Michelle Lynne 7:04
that. So explain to our audience, is that what you do? So if I were to appeal the audits, or whatever their findings were? Yep. Is that where I would call you in and say, Amy help? Yeah, absolutely. So
Amy 7:21
in in my world, there, you will find practitioners that kind of do everything kind of soup to nuts, right? Like from the actual filing of the returns and whatnot. I'm not that girl. I am more of the sort of the creative type that the deadlines and that kind of bit are not my strength. However, if you do get audited, or if you do have a question of, hey, I got this invoice from my vendor, and I don't think I should be paying tax can you help? That's when you call somebody like me. That's my, that's my area of expertise and where I spend the bulk of my time. So
Michelle Lynne 7:52
if you're in California, and I need your help, could you help me if I had questions like the the nationwide?
Amy 8:00
Yes, I work in all states. And it's a little bit different from state income tax, right? Because sales tax is so transaction focused, it would be really difficult to be a practitioner that only focuses on one state, by virtue of the fact that I live in Southern California and I have always practiced in Southern California, that's probably where I spend the most time are my clients, though, I mean, they range from, you know, small companies like yours to conglomerates that sell software around the world. So I focus on all industries and operate in all states.
Michelle Lynne 8:37
That's good to know. That's really good to know. Let me interrupt myself to take a quick moment to thank that enough insurance agency for sponsoring this episode of the design for the creative mind podcast. Their support and understanding of the interior design, decorating and home staging industries is unrivaled. Satin off understands what our businesses do, and they provide insurance that lets me sleep at night. Yep, this is the firm that I use. And they will do the same for your sleep habits. And your business too. They're more than an insurance agency. They're an extension of my business. They take care of the worry, because they are the experts, which allows me and my team breathing room to do what we do best designed beautiful spaces. You can find their contact information below in the show notes. Give them a call today. So what are the key things that a business owner like myself? Are the designers that are listening? What do they need to know? What do we need to know about sales tax? Like I don't know what I don't know. Yeah.
Amy 9:39
And so I think the first thing I would tell you is, don't be afraid of asking the state right now. We talked about at the retreat in Palm Springs. If you just call the state right to get an answer to a question and you can't build they'll tell you straight up like you cannot rely on advice given over the phone. However, Texas in person Killer a since that's where you operate, the Texas comptroller's website is actually one of the best in the country. And if you got a question, they've got a great search engine, you can pop that in there get really solid answers and guidance. And they've been good from the get go. Like even in the early stages of online searchability for tax law and whatnot, they used to call it this star or something. Anyway, the name of it has changed over time. But the Texas Comptroller website is actually incredibly good. And there they are one of they tax more things than most states, but they're also super friendly. And super helpful. Interesting.
Michelle Lynne 10:35
Interesting, interesting, because I've been on that website quite a few times, I don't know what to compare it to. So it's nice to hear that is one of the better ones. Yeah,
Amy 10:43
and California is great, too, you run into some states that are not helpful at all, like I'm defending an audit in Arkansas right now. And not only will the state not help me, but the state legitimately will not help the auditors like we cannot go to the, you know, to the Department of Revenue and get a straight answer on something. It's, it's such a controversial process. It's anyway, but Texas is great. So as far as you know, I don't know what I don't know. Most states have guidebooks that are written for the industry, Texas doesn't really have one for interior design, but it's not as hard as you think it is. And if you just kind of break things down to their fundamental building blocks, if you just kind of focus on one little bit at a time, instead of trying to take the whole thing all at once. I think as soon as you hear the word tax people kind of start to freak out a little bit, especially creatives. Yeah, yeah. And then I mean, the biggest thing about sales tax, at the end of the day, even though you're the one responsible for collecting it from your clients, it should not be an out of pocket expense to you, right? If you're doing it, if you're doing it well, then yes, there is a small cost to comply. But at the end of the day, you're basically just an agent on behalf of the tax authority, you're taking the tax dollars from the consumer, your client, and passing that along to the state. So hopefully, it doesn't impact your bottom line. Right?
Michelle Lynne 12:07
That is key. It's basically a pass through. It's a wash. Yeah. Now, I think where we got a little bit sticky. And something I learned not well enough to teach it because I'm going to ask you the question is, is tax applied sales tax applied, when the goods hit the dock of the receiver, or when the goods are delivered to the client? So the receiving warehouse? We take possession of it? Or when we drop it off at the client's house? So does it vary by state? It Well,
Amy 12:43
if not as much varies by state, and I don't want to get into the weeds too much. But sometimes how your contract is written can drive that. And what we talked about is when does title transfer, and who bears the risk of loss? There we go. Okay. Yeah, that's really what it comes down to. And to keep it simple, when, when title transfers to your client to your customer, that's basically when sales tax is triggered. Gotcha. And then that's super helpful. Yeah. Okay, so yeah, that is just 30,000 foot view.
Michelle Lynne 13:20
If you guys get twisted into something, that's when you can call Amy. So, in regards to business owners, designers, what are some of the biggest or most common mistakes that you see?
Amy 13:38
So in general, like, irrespective of industry, so taking us outside of the interior design world and just talking about businesses in general, not separately accounting for things like taxes, not managing your cash flow, and collecting tax and then not remitting it to the tax authority is the number one biggest nono. But as a small business owner, especially when you're first starting out, it can be so tempting, right? You issue that invoice. It's $10,000 plus 10%. Tax, you need that, you know, extra 1000 bucks to cover your bills, you're thinking, Oh, well, the taxes aren't due to the end of the quarter. I'll worry about that later. The quarter comes you've got this tax bill and you're like crap, I don't have $1,000 So that's probably you know, as a small business owner and sort of managing your finances. That's one of the biggest pitfalls.
Michelle Lynne 14:27
Yes, that gives me flashbacks to when I was starting my business. It was the it was totally the cash flow. Yeah. Yeah. So separately.
Amy 14:35
And honestly kind of like they teach you you know, when you're younger, and they're like, you know, take take your savings out of your paycheck like don't even like have your employer like direct deposit that savings into your savings account so that you never see it, you're not the one responsible for transferring it. Honestly, I highly recommend having a completely separate or at least a sub bank account for taxes. And similar to if you're, you know, in business for yourself, you're going to set aside a percentage of your was income for income taxes for quarterly and annual payments anyway, right? Do the same thing with sales tax, just set it aside don't even know like, don't even know that it's there.
Michelle Lynne 15:07
Yes, I think that was a big deal. I created what I called a prepaid account. And now I'm digging more into profit. First, we had Suzanne Moringa. On here, my gosh, recently, talking about profit first, and what a different mentality that is to just have different buckets for your different. Yeah, buckets of income. And it's not income, but it's still passes through your
Amy 15:32
bank account. Yeah. And then bringing it back to interior design, which obviously is what we're here to talk about, I'd say the biggest sort of complexity for you guys, no matter what state you're in, is the bundling of your services and offerings into like a flat fee.
Michelle Lynne 15:50
Yeah, we talked about that a little bit when we were in Palm Springs. Can you elaborate on that a bit? Because that's my big push is a flat fee. Design fee. Yeah. So
Amy 16:00
I mean, when it's just design fees, you're fine, right? Like interior design services in Texas aren't taxable. Like, and honestly, with the exception of like seven states, I think interior design services are not taxable on their face. It's when you start combining your labor charges, your service charges, your creativity and whatnot. When it's inextricably attached to tangible personal property, which is things you can touch the infield right. So like that bookcase behind you, right? So if you are helping your clients select that bookcase, right? So sometimes, although Texas is more friendly than California, but depending on how you bill for procuring that piece of furniture can make that procurement piece of your service, either taxable or
Michelle Lynne 16:47
not. Interesting. Yeah,
Amy 16:49
so the compounds are always taxable, right? The furniture is always taxable. But then how you bill your client for it will determine whether or not your procurement on their behalf of that item, whether or not that is a taxable service. And that's where things get the messiest for y'all. That would get hairy. Yeah, probably I'm an installation to, you know, hanging grapes at your clients, sites that kind of deal that can, depending, again, depending on the state, and then depending on how you bill for it, sometimes that's taxable or not.
Michelle Lynne 17:23
And then, if I recall correctly, one of the things that I took away from your presentation at the design biz retreat, which by the way, y'all I follow Rick compass at the design biz Survival Guide. I know he's gonna have another retreat next year, and he's just a really, really good wealth of information.
Amy 17:44
Yeah. Just the vibe of the retreat was amazing. Yeah, that's, yeah, he's,
Michelle Lynne 17:50
it's a class app. So one of the things I remember taking away is I think you said, Don't when you have your installers, they should be billing the client directly, so that it doesn't come through your anytime
Amy 18:02
you can sub that out and have your sub bill your client directly. You're better off from a sales tax management point of view, for sure. Okay, and why is that? Because it makes it their problem.
Michelle Lynne 18:14
Okay, good. Yes.
Amy 18:18
I mean, I hate to say it that way, but it's the truth. So as
Michelle Lynne 18:21
small business owners, especially if we're a solopreneur, I mean, there's so much to manage anyway, if you can just hand it off, it doesn't make it any more or less difficult for your client, it's not necessarily going to be a value add as a service provider. Right? You just have your work room or your art installer or whatever, build them directly.
Amy 18:42
Yeah, that's always I love that.
Michelle Lynne 18:48
Y'all, this podcast episode was made possible in part by foyer, a lightning fast interior design software that creates photorealistic renderings. I'm not kidding, you can barely tell that it's not a real room. So why leave your beautiful designs up to the imagination of your client, when you can show them what their space is going to look like. You will sign more clients and get more approvals with the software. It's powered by artificial intelligence, and a whole vouch for its ease, because if I can do it, anybody can. Because y'all know that my design team are the ones who do all the work, find them in the show notes. So sales and use tax, we could probably spend another hour talking about just all the nuances, but I think what I want to leave our audience with is that there are individuals like Amy out there if you guys get stuck or need some help. I'm gonna have Amy's information in the I'll have you mentioned it and then we'll have it in the notes, the show notes as well. But that's what I really want to leave the audience with. I didn't know people like you existed. I just thought it was either my bookkeeper or my tax professional but I You know that sales and use tax is different than my income tax. So having somebody like Amy available just knowing she's there if you come across a sticky situation, there's there's an advocate for you. So yeah, that's that's just such a such a relief. Yeah. Okay. So now, y'all know I'd love to talk about all things business. But I also like to have a little bit of fun. Amy, I'm not sure if you're familiar with this. Our next segment is a rapid fire q&a. Nothing's off the table. Okay, just for fun so that the audience can get to know you a little bit better. Me too. Because I always love talking to my peeps. All right, so we're going to softball start easy left or right handed. Oh,
Amy 20:49
I am almost 100% ambi. But
Michelle Lynne 20:50
right hands on it should? Yeah, really? Yeah. That's amazing. Yeah. Okay. favorite ice cream flavor. Oh.
Amy 21:01
Sounds so terrible to say.
Michelle Lynne 21:02
You know, at home. I
Amy 21:03
eat a lot of Neapolitan. But really I love vanilla. Because it's like the possibilities are endless of what you can do with it next, right? Oh,
Michelle Lynne 21:09
dreaming about the options. Yeah, but but
Amy 21:15
butter pecan?
Michelle Lynne 21:17
I think that was everybody's favorite.
Amy 21:20
Yeah. The salty and the crunchy and the sweet like it's kind of got all the goodness in it. Right. And the
Michelle Lynne 21:26
texture. Yeah, absolutely. Dream travel destination. Whole.
Amy 21:32
Anything with like, warm, clear blue tropical waters. Yeah, that doesn't suck. Coffee or tea. Coffee. Any belly button or outie belly button. prior to giving birth to my second child, it was any good. I had a navel ring and the whole deal when he totally destroyed it. But that's okay. I love him anyway.
Michelle Lynne 21:56
Chocolate chip or oatmeal cookies?
Amy 21:58
Oh, um,
Michelle Lynne 22:00
you know, oatmeal. Yeah. Good oatmeal. Cookie dough. Yeah. Do you have a consistent morning routine?
Amy 22:09
Oh, I want to say yes. But no.
Michelle Lynne 22:15
We never would have known. Otherwise. Who's your favorite superhero? Um, I don't.
Amy 22:23
Wow, I'll that's a terrible Deadpool.
Michelle Lynne 22:30
I never saw that one. But I heard
Amy 22:31
that was terrible. That's an awful. No, I mean, I you know, I love a bit like Wonder Woman. Of course. Who doesn't know.
Michelle Lynne 22:39
I'd love to see Deadpool though, because there was so much talk about it. And
Amy 22:43
honestly, though, I'm not sure if it's dead puller. Ryan Reynolds. Let's be
Michelle Lynne 22:47
real. Fair enough. Fair enough. He's just so funny. Yeah, the eyeballs. No, and
Amy 22:55
if you Oh, well, the name is escaping me. He's got he's got a new movie out right now. There's basically if you have teenagers who do any level of gaming and you understand that world at all, it is ABS it's called free guy. It is hysterical. I've seen it twice. Anyway, but I do love Ryan Reynolds. Sorry. I love my husband with you. But I love Ryan Reynolds.
Michelle Lynne 23:16
Everybody should have that. Have that. That one? Yeah. What did you want to be when you were growing up? An architect? Interesting. Yeah.
Amy 23:25
And before that a fighter pilot. Oh, fun. Yeah, see that? Yeah. And then I was in junior ROTC in high school for a hot minute discovered. I can't take orders and so the whole fighter pilot thing went out the door
Michelle Lynne 23:41
that's true. Awesome. What is your favorite form of ice of ice cream? What is your favorite form of exercise? Oh,
Amy 23:50
I love lifting heavy shit.
Michelle Lynne 23:53
No joke. Me too.
Amy 23:54
Yeah, give me a good deadlift on any day.
Michelle Lynne 23:56
That's hilarious. I have a T shirt. It says I just want to love Jesus drink coffee and lift heavy things.
Amy 24:02
Yes. 100% Yeah, I love lifting. You know, there's I don't know if it's a woman thing or what? But like, nothing makes me feel stronger than just lifting really heavy stuff.
Michelle Lynne 24:16
I have a three year old daughter that now counts. Is that There
Amy 24:19
you go. Yeah, no, I was so like, the first day I like dead lifted my own bodyweight. I was like, you know, and I've exceeded that now. But ya know, it's there's something so empowering about it. Amazing.
Michelle Lynne 24:31
I totally agree. I love hearing that. All right. Um, if you could have dinner here's the last one. Well, no. introvert or extrovert? Oh, hi,
Amy 24:39
II off the charts. That doesn't surprise me.
Michelle Lynne 24:44
Yeah, yeah. Well, yes, I think so. Just with your energy, but I'm a very big introvert. So it's also it's hard to judge when it's a small crowd. Yeah, that's
Amy 24:55
for sure I have. So my husband calls them my cocoon days. I have about three two days a month. It's usually kind of cyclical if we're honest, but like we're I don't want to be around anybody, like including him or my kids like me a blanket a cup of tea, even though I'm coffee, not tea and my cat and a good book like that's, like the only interaction I want for like three days a month. But other than that I'm off the charts extroverted.
Michelle Lynne 25:18
Well, there you go. It's just really feeling you. Yeah. All right. So if you could have dinner with anybody, dead or alive, who's the one person you would invite to dinner?
Amy 25:29
On Athan in? Oh,
Michelle Lynne 25:31
the author. Yeah. Why? I'm not familiar. Gosh,
Amy 25:39
that woman embodied and understood. Feminism, and female just empowerment and strength. Before those words even existed. Interesting. She just blows my mind. blows my mind. I
Michelle Lynne 25:58
will totally have to dig into that a little bit more. I didn't know how to pronounce her name. And I might have gotten it wrong. I'm sorry. But she
Amy 26:06
just blows my mind. Yeah. Perfect. I'm
Michelle Lynne 26:10
writing this down. Good to know. Thank you so much, Amy. Thanks for being here today. Like, yeah, thanks for having so appreciate it. And I know our audience has loved everything you've shared, because this is such a unique and very specific little niche of business. It is
Amy 26:27
and I hope that it's helpful. I try really hard in conversations like this to not get too lost in the weeds. That it's I'm such a tax nerd. And I've been like living and breathing this for over 20 years. And so sometimes it's hard for me to to keep it high level enough, you know, but my goal is to make you feel better about it not make you panic. So, so I hope that we've accomplished a little bit of that today. But anytime any of your people have questions, feel free to just drop me a DM or hit me up an email or whatever.
Michelle Lynne 26:54
Well, speaking of which, how can they find you?
Amy 26:57
Yeah, so I have social media, but not necessarily for like my sales tax business. You can find me on Instagram. I am Amy Monroe. And you can always DM me there and then you can find me for business purposes. My email is my first name Amy at sitar Inc, and you can put it in the show notes. So Tara is the firm that I work with primarily. So how to spell sitar s a t tar.com. Yet Yep. Just like it sounds. Yeah. And you know, first of all, is always free. And I'm happy to help.
Michelle Lynne 27:31
That is awesome. And like I said, if I had even known people like you existed years ago, that whole process would have just been nice to know that somebody else had my back. Thankfully, I got a really good auditor for Texas. So I will make sure that that information are as listed into the show notes. And for those of you who can benefit from even more resources surrounding the business of running your interior design business, join the growing community on Facebook and my Facebook's private group. And yeah, I know it's Facebook, but it's a really cool group. It's called the interior designers business Launchpad. You know, I get people saying I'm not on Facebook, Michelle, just like create a ninja profile and come on in because I train once a week, just a quick 1015 minutes. And the community itself is amazing. And it's all centered around business. So come join us there. And finally, don't forget to leave a review anywhere you're catching this podcast. It really does help keep us relevant, and I really appreciate it. So Amy Monroe, thank you so much for being here.
Amy 28:30
Thanks, Michelle. I really had a great time. I appreciate it.
Michelle Lynne 28:35
Hey, y'all, if you love the show and find it useful, I would really appreciate it if you would share with your friends and followers. And if you like what you're hearing, want to put a face with the name and get even more business advice. Then join me in my Facebook group. The interior designers business Launchpad. Yeah, I know it's Facebook, but just come on in for the training and then leave without scrolling your feet. It's fine. I promise you'll enjoy it. And finally, I hear it's good for business to get ratings on your podcast. So please drop yours on whatever platform you use to listen to this. We're all about community over competition. So let's work on elevating our industry, one designer at a time. See you next time.
Transcribed by https://otter.ai
