Not all businesses have employees, but that aside, they account for the income paid to the employees and the taxes withheld. That is the "transaction" on which the tax is based.
Businesses already record each transaction at the time of sale.
At the retail level, if their books are that detailed. But not in the service sector.
Businesses need answer only one question to determine the tax due: How much was sold to consumers?
OK. And how do you answer that? If I spend one hour more of my time (God help me I'll be a robot punching a clock) with client A than I did with client B, for the vary same service, must I collect additional taxes from client A for the service required? Don't tell me I set the rate on my gut feelings. I could do that now. But I couldn't with a sales tax. I'll get stuck for cheating on taxes.
What do I do with the little old lady that's hard of hearing and needs two additional days of work over the average? You'd think I couldn't bill for that. You'd think I wouldn't. But what kind of lawsuit and legal problems would I open myself to if I charged her more for the service? Or if I didn't? Some things don't reduce to dollars and cents that easily.
Here is where that's specified in the bill:
`Any person liable to remit taxes pursuant to this subtitle shall keep records (including a record of all section 510 receipts provided, complete records of intermediate and export sales, including purchaser's intermediate and export sales certificates and tax number and the net of tax amount of purchase) sufficient to determine the amounts reported, collected, and remitted for a period of 6 years after the latter of the filing of the report for which the records formed the basis or when the report was due to be filed. Any purchaser who purchased taxable property or services but did not pay tax by reason of asserting an intermediate and export sales exemption shall keep records sufficient to determine whether said exemption was valid for a period of 7 years after the purchase of taxable property or services. `SEC. 510. TAX TO BE SEPARATELY STATED AND CHARGED. `(a) In General- For each purchase of taxable property or services for which a tax is imposed by section 101, the seller shall charge the tax imposed by section 101 separately from the purchase. For purchase of taxable property or services for which a tax is imposed by section 101, the seller shall provide to the purchaser a receipt for each transaction that includes-- `(1) the property or services price exclusive of tax; `(2) the amount of tax paid; `(3) the property or service price inclusive of tax; `(4) the tax rate (the amount of tax paid (per paragraph (2)) divided by the property or service price inclusive of tax (per paragraph (3)); `(5) the date that the good or service was sold; `(6) the name of the vendor; and `(7) the vendor registration number. ""SEC. 509. RECORDS.
In addition, once a month you would prepare a specified two line report and send it and the taxes collected to the state tax administration. You would be well-paid for doing this collecting and forwarding and the money is paid by your buyer, not you. Under the present system any form filling out, etc. you do is an unfunded mandate by the government (you do it at your expense). With the FairTax there is no unfunded mandate.