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MnLefty
02-18-2011, 05:16 PM
This is a question for those whose customers pay tax on mowing/landscape services...

Do you quote the job with a pre-tax price, or tax included?

Say if it's a $40 mowing, do you quote $40 plus tax, or do you figure in the tax and give them a price of $42.xx or whatever it might be including tax?

Do you think it matters at all to the customer?

Do you think your bookkeeping/accounting would be easier one way or the other?

Jimslawncareservice
02-18-2011, 05:21 PM
what i found out when i started is that customers dont like to 40 per plus 2.80 for tax. I just say 43 a cut. lets say i take in 10k in a month. roughly 700 goes in a seperat account. at the end of the year i pay what i need to in.

chavezw16
02-18-2011, 05:44 PM
most of my customers dont mind paying the tax. although some of my elderly customers i include tthe tax to make it simpler for them, especially the ones that pay cash. accounting is pretty simple both ways

Lefet
02-18-2011, 05:49 PM
I just quote "That will be xxx dollars plus tax".

MnLefty
02-18-2011, 06:17 PM
I just quote "That will be xxx dollars plus tax".

That's how I've been doing it as well, just saying xx plus tax, without giving the actual tax figure. I've been kicking around the idea of a "we pay the tax" pre-pay/early signup discount on services excluding mowing. Since the quoted price on my contracts doesn't show tax, if I chose an arbitrary % discount I would have to show a regular price and a pre-pay price. If I made the discount the tax amount they could just pay the amount quoted. Saves a little hassle on the forms.

That got me thinking about if I should be quoting all prices including tax... On one hand I think some customers end up surprised when they look at a quote for say $200 monthly, then the invoice comes with the tax and it's now almost $215. On the other hand some customers may not pay close enough attention to a "tax included" quote and think my $215 that includes tax is $15 bucks higher than a $200 + tax quote... they'll just notice the lower number.

Lefet
02-18-2011, 06:25 PM
That's how I've been doing it as well, just saying xx plus tax, without giving the actual tax figure. I've been kicking around the idea of a "we pay the tax" pre-pay/early signup discount on services excluding mowing. Since the quoted price on my contracts doesn't show tax, if I chose an arbitrary % discount I would have to show a regular price and a pre-pay price. If I made the discount the tax amount they could just pay the amount quoted. Saves a little hassle on the forms.

That got me thinking about if I should be quoting all prices including tax... On one hand I think some customers end up surprised when they look at a quote for say $200 monthly, then the invoice comes with the tax and it's now almost $215. On the other hand some customers may not pay close enough attention to a "tax included" quote and think my $215 that includes tax is $15 bucks higher than a $200 + tax quote... they'll just notice the lower number.



I would be careful with the "prepay we pay" thing. Just give a discount and adjust the bill accordingly. We've never had a problem yet, but I'm always careful to ensure they hear the "PLUS TAX" part. This is Jersey, practically breathing is taxable, and they want it all.
I can't always quote totals with tax. Sometimes I have to get back to the office to actually sit down and figure it out. But I always leave myself a cushion when estimating. And if it's a large job, I get them to sign the estimate sheet, which states, "Estimate, bill to include XX% NJ sales tax".

WheatBookkeeping
04-14-2011, 04:31 PM
Guys, remember to have your bookkeeper credit the tax that you collect to the Sales Tax Payable account. Then your sales revenue will be correct and the tax you collect will not be considered part of your income base.

If your customers span across multiple taxing jurisdictions, make sure your bookkeeper knows where the work was accomplished.

Golfpro21
04-14-2011, 06:00 PM
up here....everything we quote is pre-tax price......invoice will reflecta 13% HST

Roger
04-14-2011, 09:39 PM
I think my state (PA) requires a separate line item on the invoice for Sales Tax. Using the "tax included" quote would not be valid. You could split it out on the Invoice, but the cost of services would be some odd number as well.

We all pay odd amounts for products and/or services when the Sales Tax is added to the costs. Why should my Invoice for lawn services be any different?

Cost + Sales Tax = Amount Due

TSB group
04-15-2011, 09:01 PM
I also tell people I do not charge tax, I just collect it. Do they fight over paying sales tax at most stores? If its a $40 mow, the bill is for $42.40 here in PA.

Lefet
04-15-2011, 09:04 PM
I also tell people I do not charge tax, I just collect it. Do they fight over paying sales tax at most stores? If its a $40 mow, the bill is for $42.40 here in PA.


I like that, think I'm going to have to use it! :clapping:

klogan011
04-17-2011, 09:17 PM
Why are you guys charging sales tax to mow grass? Labor is not a taxable item (REFERRING TO THE SALES ASPECT). Maybe its different in different states but I don't think so.

Roger
04-17-2011, 09:23 PM
Sales Tax laws vary from state to state (even county to county in my area). If you have a question on what service is taxable, then check with your state Department of Revenue. In my state, most lawn service tasks are taxable, but others are not (e.g. landscape install vs. landscape maintenance).

None of us charge Sales Tax, rather we are merely collecting it on behalf of the state. It is a non-compensated task the state requires. The revenues are collected, and remitted to the state Dept of Revenue, dollar for dollar. Failure to comply is punishable by penalty and interest.

Lefet
04-17-2011, 09:24 PM
"The tax on repair and maintenance services has not changed. The Sales and Use Tax Act imposes
tax on charges for maintaining, serving, and repairing real property. The following are examples
of taxable repair and maintenance services performed by landscapers: mowing lawns, reseeding
lawns, tree maintenance, weed/insect control, fertilizing, soil aeration, and mulching. "


Taken from:

Informational Guide
Landscaping Services and New Jersey
Sales Tax
Prepared by the
New Jersey Department of Agriculture
In Cooperation with & Approved by:
New Jersey Department of the Treasury
Division of Taxation
With Assistance from
New Jersey Nursery and Landscape Association

http://www.state.nj.us/agriculture/pdf/InfoGuideLandscapingServices.pdf