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Business supplies sales tax?

Discussion in 'Business Operations' started by Ramairfreak98ss, Aug 7, 2007.

  1. Ramairfreak98ss

    Ramairfreak98ss LawnSite Silver Member
    Posts: 2,210

    I know we all must pay the state sales tax for items purchased like trucks, lawn mowers, rakes, trailers, gas etc. But when I purchase say $100 of mulch, my suppliers still charge me $107.00 after the NJ 7% sales tax. Then that means when i charge the customer, the tax has already been paid, by myself or my company when it was first purchased. When i file my quarterly sales tax. If I purchased say $10,000 in supplies, thats $700 in sales tax that IVE ALREADY paid for in that quarter. If my total sales tax collected was say $1,000, i should owe still $300.00 correct?

    Problem Ive run into this time, ive spent a lot more on supplies alone this last few months than ive had income to show for. Say ive spent 20k in supplies and can only show 18k in income. Thats $1,260 collected sales tax, yet $1,400 sales tax paid for already in resalable supplies.

    I know others in retail market industries and small businesses and they have tax exempt "resale" license numbers so, when they buy supplies for resale, they dont have to pay sales tax on items they're reselling.

    Why dont lawn/landscape companies have these or are we eligable for these same documents? How do you work this part of your invoicing? Locally some of my customers know that they can run around the corner and buy a yard of mulch for $20.00. If the same customer has me deliver it, i would like to make a few dollars on that yard plus delivery and not have a bitching customer.

    5 yards costs $107.00
    If i sold it to the customer, id have to now sell it for $107.00 plus my markup, lets say $3 per yard so its $115.00 plus nj 7% tax is now $123.05 plus my delivery fee and tax on that too.

    You get the point, if this is how it really worked, why would people buy supplies from landscapers when they can usually find a local landscape or nursery center to them and only pay the sales tax ONCE? This would kill us on big items like Trees that are $500 and the customer knows the cost of the tree.

    It would be $500 plus my tax paid of 7%/$35.. Id have to bill out $535.00 plus tax before i break even. All ive done there was make the government 14% on an item i could have had the customer just go out and buy on their own.

    I got a tax notice back in the mail this month, stating i owe another 1k or more. When NJ tax is filed, the only option for anything of this nature is payments made. So i put in the amount of sales tax ive paid directly for supplies that were resold to end customers. That number is higher than my amount owed for this quarter. Now they want 1k+ and then interest all the way through September 14th!

    CLARK LAWN LawnSite Silver Member
    Posts: 2,526

    I dont know about in Jersy but in Ohio you must have a vendors lisence to be in business and with that lisence # you can get your tax exempt status for any you by for resale,i.e. mulch,topsoil, seed,salt.different places require different things.Some places just had a simple form to fill out and they keep it on file,Home Depot is a different story, must be done online and is a PITA.
  3. grandview (2006)

    grandview (2006) LawnSite Gold Member
    Posts: 3,466

    I have sales tax exempt forms on file at different nurseries so it's not that much of a problem.
  4. Ramairfreak98ss

    Ramairfreak98ss LawnSite Silver Member
    Posts: 2,210

    thanks guys, how did you get the nursery etc. type companies to honor this once correct forms were filled out? I deal with some big places, had to fill out lengthy forms, and they still charge me freking sales tax, they say, its that way for everyone in nj at least they know of. Sure bothers me when i pay out 4k in supplies and then have to pay sales tax only to resell it, thats why i "assumed" for a long time that theres no way your paying tax yourself, then collecting more 7% tax on that amount plus your labor and supplies markup. My large place in jersey told me you can only be exempt if your a retailer/resale ONLY, i guess like if my company resold dirt/mulch/trees etc but didnt offer a labor service? I sell more than i make in labor though :hammerhead: :confused:
  5. Ramairfreak98ss

    Ramairfreak98ss LawnSite Silver Member
    Posts: 2,210

  6. grandview (2006)

    grandview (2006) LawnSite Gold Member
    Posts: 3,466

    You are doing resale. If the nursery is selling to you at wholesale or regular price and you resell to your customer at a higher rate you should be exempt on your purchase but you must collect tax from your customer. Now if the nursery won't do it nothing you can do ,or talk to the manager or go somewhere else.
  7. newz7151

    newz7151 LawnSite Silver Member
    from Tejas
    Posts: 2,419

    BS. If the guy is turning in to them, a properly completed RESALE tax exemption form, they HAVE to honor/accept it. If they will not honor it, perhaps they are collecting sales tax but not actually sending it in to the state like they are supposed to.

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