a little quiz...

[bobbygedd]

the sales tax rate here is 6%. so, heres the quiz: u r charging "mrs. smith" $25 per cut +tax and your price per cubic yard of mulch is $50+ tax. you cut mrs smith 4 times this month, and u put 4 yds of mulch in the beds. mrs smith refered u to her sister, and a friend, and u picked up a couple new customers. to show your gratitude for the referels, u tell mrs. smith u are only gonna bill her for 3 cuts, and 3 yds of mulch. the cutting came to $75, and the mulch came to $150. thats a total of $225. how much sales tax do u owe the state?

[1grnlwn]

None. Services are not taxed and materials to support that service not taxed either. IL. at least.

Mark

[bobbygedd]

in nj all goods and services are taxed

[bruces]

Tax is generally charged on the selling price. You are selling a dollar amount of services. The fact that you are effectively discounting your price means that the tax will be less for the same amount of services.

If you actually show the selling price at gross less the discount, then in some states you may be liable for tax on the amount before discount.

If you are just showing the reduced price, I think you would charge tax on whatever price you charge.

Disclaimer -- I am not familiar with laws in your state!

[cos]

You only tax for money rendered. PA: New lawn and sod installations are not taxable. If you are selling to a retailer, then it is not taxable. When someone asks about tax, (especially commercials) tell them that they are are selling your goods so it is taxable (they already know that). I had several phone calls inquiring about sales tax and then tell them I will send them a photo copy of the rules I follow. They always decline the offer.

[1MajorTom]

Well for the cutting I would say you owe the state $6.00.
You provided the service, just because you decided to give away part of the service doesn't mean the state still doesn't get their money.
Just like if you go to McDonalds and have a coupon for a free Big Mac. You still have to pay the tax on it.

[bobbygedd]

anyone else? i know the answer, it came right from the horses mouth(someone who does audits for the state) just wanna see how many of u know the answer

[kaufmaninc]

Originally posted by 1grnlwn
None. Services are not taxed and materials to support that service not taxed either. IL. at least.

Mark

Not yet....but hooooooooooold on. We've got a new Gov!!!!!!

Sounds like we're about to be hit with this! Addition sources of revenue for the state don't ya know.

[1grnlwn]

Yea, the guy that lost all the money raised all the license fees. Where did all that go?

[bruces]

Everyone needs to remember that an answer that is right in Missouri (or whatever state you work in) might not be right in another state.

Sales tax laws vary by state, labor is not taxable in Missouri, for example, but I know in many states it is.

Unless you are really knowledgable about other states the answers everyone are giving might be totally off for this case but right in the state you do business in.

[fblandscape]

My accountant told me that any services that you do on a regular basis are taxable. Cutting lawns, installing mulch, weeding gardens, fertilization, etc. However if you are doing a service which can only be performed once, or very close to once then it falls under something called Capital Improvement... and the customer is not taxed. So basically, an install... a removal... etc... are considered one time deals and are not subject to tax. That is just my understanding of it though. But then again if I ever get into trouble with the IRS I have a number to call :)

[DLCS]

Originally posted by fblandscape
My accountant told me that any services that you do on a regular basis are taxable. Cutting lawns, installing mulch, weeding gardens, fertilization, etc. However if you are doing a service which can only be performed once, or very close to once then it falls under something called Capital Improvement... and the customer is not taxed. So basically, an install... a removal... etc... are considered one time deals and are not subject to tax. That is just my understanding of it though. But then again if I ever get into trouble with the IRS I have a number to call :)


fblandscape,

What state are you in, doesn't say in your profile? What is taxed varies by state.

[rodfather]

18 bucks bobby

[bob]

I'm glad I live in Delaware, no sales tax!

[tiedeman]

same with Michigan, only taxes are on sales, not service

[Turfdude]

Bobby G.,

Heres some answers for you. You must first pay the tax on the mulch. If you label the job as install mulch, you tax the total job! If you break it down as $xx.xx for mulch and $yy.yy for labor, you tax labor only!
As for the discounts, you must pay the tax on the whole job if you show all 4 jobs on your invoice w/ a discount (-$25 for one mowing), however, if you only list 3 services and put N/c on the fourth, then you only submit on 3.
Its very similar to coupons. You must pay the tax on the coupon amount!!

Bob

P.S. Send me the prize!!!!!!!!!

[bobbygedd]

ok, heres the deal: my friend owns a bar, the fool puts next to the price list, "when ordering draft beer, every fifth one is free."ok, someone calls the state on him for something, as they r there investigating him, they see the sign. they tell him he must pay the sales tax for the last x amount of years for the beer he gave away. hes like huh? yup, they further explain to him that in business in this state, u can give away anything u want, but the sales tax must be paid on it. he explains that he cant possibly figure out how much beer was given away for that many years. the state says no problem, we will figure it out 4 u. they wacked him good. so, u can give away all the cutting u want, just send in the 6 %

[greenman]

Residential service cannot be taxed, but commercials can.(in AR) :confused: Of course, materials can be taxed. I use a hidden tax, because I pay taxes once a year (for now).

[Randy Scott]

Yeah, well then I suggest anything you give away be given away verbally.

[mike9497]

well my state taxes the hell out of me so everything i do labor wise i charge 6% tax and any mulch topsoil stone ect i sell i charge tax also.my town takes 3 to 600 a year in taxes from me for my biz and my state takes 2 5000 a year for taxes.non tax places like churches i charge tax i just go up in the price for labor ect.the state doesn't care that you did work for them and didn't charge tax.when i go down to the landscape supply yard they would laugh in my face if i gave them the churches ID number.they charge tax anyway.

[bobbygedd]

randy, shame on you! what are u insinuating? that we only obey laws that are "convenient?" i thought this sight preached being legitimate, legal, ethical, proffesional. im shocked

[Acorn]

Up here in New Brunswick Canada, we have to charge 15% on all goods and services:dizzy: