Sales Tax

[ChrisYanik]

Just wondering how many of you collect sales tax from lawn care service.

Do you add the tax to the total price of the weekly mowing or do you collect it seperatly.

Seems to me it should be collected seperatly.

The reason I'm asking is because I've been operating under the table for the past three years and decided its better to work legally from now on. Just thought some people may get upset if I begin to charge Sales tax.

Ya I know...It's a dumb question, I was just wondering If any of you have had a similar situation?

[kutnkru]

if its 20 bucks
we add $1.60
and collect $21.60

Kris

[VLM]

In VA there is no sales tax on services (only on actual goods sold) so its not a problem for me. Are you sure there is a sales tax on services in your state?

[TJLC]

It may vary from state to state, but I have never heard of anyone charging tax on services.

[ChrisYanik]

Here in OHIO, there is a sales tax since I'm selling a service to people. Collecting sales tax on good sold is requires a standard venders license. Collecting sales tax on service's sold is also required here in OHIO and requires a service venders license.

If anyone else is from Ohio please correct me if I'm wrong. I'm fairly sure that this is the law set forth in Ohio though.

[Pauls Mowing]

I have to collect 4% state and the city tax from my customers. SD has always taxed services.

Paul

[kutnkru]

In New York when we buy products we are considered "tax exempt" if we will be charging the customers for those products.

If I buy mulches, fertilizers, etc. I dont pay the wholesaler tax on the product because the customer pays for the tax as part of the service.

If I am buying equipment, landscape fabrics, stakes for guying trees in a landscape installation then I pay the sales tax at the time of purchase because I dont bill these materials to our clients they are a cost associated with doing business.

Hope I havent corn-fused anyone.
Kris

[ChrisYanik]

Paul Stated The Following

Paul's Mowing I have to collect 4% state and the city tax from my customers. SD has always taxed services.

Paul



4% ON ALL SERVICES AND PRODUCTS SOLD!!!!!! ARE YOU SURE THAT'S RIGHT.

Here in Toledo Ohio the sales tax is 6.25%. And the cost of living is considered to by LOW in this town which means mowing prices are low and fertilization prices are around $25.00 for 4000 sq. ft.

[1MajorTom]

6% sales tax on services rendered here in PA.

If it's a $40.00 cut, with tax it is $42.40. We send in our sales tax quarterly.


We have had a few people in the past balk at the idea of paying the sales tax. (Their neighboorhood boy wouldn't charge them of course). Well I brought sales tax up before here on lawnsite, and someone suggested when telling your customers that there is sales tax added to bill, tell them
you do not charge sales tax, but instead you COLLECT it for the State of PA. Good idea there, and we now say that.


[Edited by 1MajorTom on 02-06-2001 at 05:18 PM]

[kutnkru]

Its all in the how you present it.

Thanks Jodi.
Kris

[morturf]

Chris,

Yes the 4% is right and get this.....NO INCOME TAX IN SOUTH DAKOTA!!!!!!!! But this is also the reason there is only one snowplow in the whole state and it is the big bright ball in the sky. Just kidding Paul....been a neighbor for years.....LOL

[bob]

No sales tax in Delaware. You pay $25 for something that costs $25!

[LoneStarLawn]

Texas does...You must add the state sales tax plus local sales tax...

[GREG R]

couple years back we ran into the same problem when going
to completly legal
just sent out a memo with the invoices that said
"tax man caught up with us starting ???? we will be
collecting 6% sale tax on all service preformed on
your property"

not one customer said anything and nobody canceled
and future estimates phrase "plus tax"

[thelawnguy]

The customers know its included in the total price and we round up to the nearest $. This way the only fraction of a $ I need to deal with is when I file my quarterly sales tax return (state lets you divide total receipts into the 6% tax rate after deductions-people collecting SS checks do not pay sales tax on lawn care here as long as they give you the proper paperwork CERT-121 in CT).

[bobbygedd]

i put on my contracts: 6% nj sales tax to be added to total bill, this is the law, and there will be no exceptions! and still, poeple get thier bill for $100+tax = $106, and they send me a check for $100. they expect me to dig the 6% out of my pocket. aint doin it. why should i have to feel like im a bad guy when i tell them the price is ...oh, and plus tax. they always say, i didnt pay sales tax with the other guy. guy i know was in bus a long time, never charged sales tax, state caught up with him and since his bookeeping was questionable, they just estimated it, he had to pay $20,000. my question is, if a cust refuses to pay sales tax, can i report THEM to the state?

[lsylvain]

As far as I know I am the only up and up lawn service in my area. so lots of my customers really don't understand why they have to pay sales tax on having their grass mowed etc. What I have found that works best for me is when i give them a price on a job I include the tax in the price.
So if a job comes to $25 it is really $23.58 plus tax. It avoids the problem of arguing with customers and it makes making change much easier.

[thelawnguy]

"my question is, if a cust refuses to pay sales tax, can i report THEM to the state?"

In CT there is a form the customer can sign and it will transfer the responsibility over to them. Rots of Ruck getting them to sign it though. It is ultimately the businessmans responsibility to collect and forward the tax.

In CT, sales tax on lawncare is relatively new (past 10 years or so) and the vast majority of contractors just figure the 6 per cent in with the bid. This way it eliminates the short pay that you experience.

[Fantasy Lawns]

no sales tax on services in fla .....on items we purchase (and taxed) we "wrap" this cost into the cost of the service or installation

[Ocutter]

You probably can turn them in. True story- Friend of a friend cut lawns for x yrs. Didnt collect tax. IRS audited him and said he had to pay tax + penalties or give up his cust. list so that they can go after the home owner for back taxes not paid for the service. He paid of course. Any service is taxable unless it is a capital improvement (landscaping, lighting, pools, additions on house, etc).

[LoneStarLawn]

Ocutter..sales tax is not a federal issue it is a state issue. Therefore it may be different state to state. The Texas regulations are listed on our website on the FAQs page.

[Edited by LoneStarLawn on 02-08-2001 at 07:25 PM]

[Ocutter]

Just telling an anecdote and what happens in NJ, that's all.

[bilchak]

Does anyone use the fact they have to charge sales tax as a selling point?

Say.......Listen, I'm the only professional guy in town, I'm
incorporated, insured, etc. I have to charge you this sales tax.

How about homeowners using it as a right off. If they pay the local high schooler 20 bucks and receive no receipt/invoice, etc. can they legally write it off on
their taxes? I would say, with my business you can legally claim this, you'll have receipts.....thus we need to charge sales tax.

It all comes down to Professionalism in my book, thus
you must charge sales tax in OHIO.

John

[plow kid]

We chatted for about a hour last fall.

In Toledo you have to charge the tax, 6.25% on goods sold ie. mulch , bushes,..exc. i don`t know about services.

[bilchak]

Plow Kid,

You should be charging 6.25% on your service as well.

John

[thelawnguy]

You should make it clear to the customer-you do not charge sales tax. The state or county is who charges the sales tax, and they require you to collect the tax.

Thats all you are. The tax collector not the one levying the tax. Dont be the bad guy, put the onus where it belongs.

[BobR]

NY State requires you to collect state & local taxes on services provided..
taxes are included in the monthly billing statments sent to my customers..
I do not have a resellers tax exemption YET so when I purchase any products to be used on the customers property I list them seperatly on the monthly statment as tax already paid.. Not as confusing as it sounds.. Customer is happy not to be paying double tax on products.

Bob

[Scape Sculptor]

In Ohio services is Taxiable. 5.75 her in Akron. It is only $25.00 for the Service Venders Lisc. Go to this link it will tell you most of what you need to know, plus the application form is there also.
Dan


http://www.state.oh.us/tax/global_forms