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a little quiz...

Discussion in 'Lawn Mowing' started by bobbygedd, Jan 18, 2003.

  1. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    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?
  2. 1grnlwn

    1grnlwn LawnSite Bronze Member
    Posts: 1,261

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

  3. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    in nj all goods and services are taxed
  4. bruces

    bruces LawnSite Senior Member
    Posts: 648

    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!
  5. cos

    cos LawnSite Addict
    Posts: 1,253

    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.
  6. 1MajorTom

    1MajorTom Senior Moderator
    Posts: 6,074

    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.
  7. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    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
  8. kaufmaninc

    kaufmaninc LawnSite Member
    Posts: 168

    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.
  9. 1grnlwn

    1grnlwn LawnSite Bronze Member
    Posts: 1,261

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

    bruces LawnSite Senior Member
    Posts: 648

    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.

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