Taxes

[Green Acres]

I was wondering who added tax to the customers bill? For instance to you charge $30 or $30 plus tax? If you charge the tax how do you come up with the percentage? Thanks.

[BRL]

Each state has its own tax laws which specify what services get taxed and at what percentage. You may have to have a certificate or license from your state to collect their taxes for them. Talk to your accountant. Hopefully Scraper doesn't see this one & tear ya a new one ;)

[Scraper]

Don't get me started BRL :)

I will refrain from responding to these posts til after the Holidays.

Better yet...Green Acres...just pull a number out of that hat charge it and put the extra money in your pocket! No...just kidding. Listen to BRL and CALL YOUR ACCOUNTANT or STATE DEPARTMENT OF Taxation.

P.S. BRL...Hunter Mountain has over 20 trails open!!! Let's figure something out!

[mike]

Were I live tax is not added to labor work. Tax is added to material & supply. check with your CPA or advice from a lawyer friend.

[LoneStarLawn]

Taxes laws can differ form state to state. In Texas you have to charge taxes for service as well as materials, etc. The percentage itself depends on the county that you live in. Sales and Use Tax (as it is called here) varies from county to county. Do a search on the web to find the comptroller's office for you state. The information that we found for our state is listed on the internet.

[MOW ED]

In Wisconsin each county has its own tax rate and I am starting to put this tax on my new customers (.055%).

I have a pretty heavy tax burden as this state is one of the worst around for taxes. I use Quicken Home and Business as I am a relatively small company and this program has taxing provisions built into the invoices. No one complained yet and its a good way to give yourself a raise while blaming it on the government.

[BRL]

"its a good way to give yourself a raise while blaming it on the government."

Mowed,
Are you saying that you are going to collect the state's tax & then not turn it over to them? Breaking those laws will probably land you in jail + fines, as opposed to not collecting them, and getting just fines when you get audited. Probably shouldn't post that at a public forum, the authorities love getting easy written evidence of fraud & tax evasion from perps.

[MOW ED]

BRL,
Absolutely not! I pay all taxes collected. Let me clarify - if I have a customer that currently pays 30.00 per cut I will charge that customer 31.65 (1.65 or .055%)which is the states portion of the taxes. In essence I am making 1.65 because otherwise I have to subtract this amount from the 30.00. This works for the properties that can't justify a 5.00 per cut increase.
Of course the Federal tax and fica is taken out by my accountant when I pay my income taxes.
I have no secrets.

[TLS]

MOW ED,

You are not making any more money from the customer. Your just not lowering price so that it comes out to $30 with tax. State sales tax is added (6% here) to all mowings. If its a $30 lawn I add $1.80. This is giving me a 0 % raise. I would never back out the tax. A $30 lawn is a $30 lawn. Customers understand that its the Governer getting it and not me. Here in PA snowplowing isn't taxabe so I dont have to tax that.

[Greenkeepers]

GA-

I think the tax that you are talking about is sales tax. You will need to call your states treasurers office to see if you are required to collect sales tax. In OH we are.

You have to remember that sales taxes are not an expense, they are a liability. When you send an invoice it includes all the sales tax collected. Then you submit the monthly amount to your treasurer.

Hope this helps, email me if you have any more questions w/ taxes

[thelawnguy]

In CT one must collect 6 per cent sales tax on lawn services. But the contractor may, rather than account for tax separately, take total sales and divide by 1.06 to come up with a net sales figure, then figure tax due on that amount.

For a $30 lawn, rather than add $1.80 I charge the customer $32 so I actually made $30.19, $1.81 for the tax when I file my quarterly sales tax return.

[Chip]

Hey Tom the last time I checked if you file your sales tax on time here in Pa you will get to keep a percentage for your effort. I forget if it is 1 percent or 1/2 percent. It is for your collection expense.

[bob]

The state of Delaware, has no sales tax!

[TLS]

Chip,

It's 1%. This reward is just for fileing it ON TIME. I take advantage of this all the time. Sometimes its enough to take the family out to dinner.

[Acute Cut]

Way up here in Washington i have to add .078 for taxes. I have not had any customers complain yet. We all have taxes (up here) so why complain to the lawn guy.

[Scraper]

Yeah, in PA it is 1%, but it is 1% of the 6% you collected in sales taxes not 1% of the total taxable sales. So if you have $1000 in sales tax due you would get a whopping $10 for having to complete and mail the tax stub. Not much of an incentive although still needs to be done...

[jcoat]

Here in Oklahoma we do not charge sales tax on services, only if an item is in exchange (i.e. product). The only taxes will be state and federal income taxes. Of course, these vary from state to state.
Also, check your state's web sites or the Blue Pages of your phone book. OK has free tax commission workshops. At these shops they give you everything you need to establish your business AND the instructors give you their contact information just in case you have questions or clarifications. The class is only 1.5 hours in length.
Hopefully this helps...