Collecting sales tax question?

Discussion in 'Business Operations' started by JayD, Mar 24, 2011.

  1. JayD

    JayD LawnSite Silver Member
    Posts: 2,060

    For those of you who collect sales tax from your customers, how does it work? Meaning, say you do lawn apps, do you just tax the product used or product and labor used? I saw a bill from one of these companies and they tax for the whole thing even the $3.00 fuel surcharge they are tacking on. Can this be OK? I always thought you could only tax product or service but not both at the same time.....Am I wrong?
    I don't see how they can tax fuel surcharge?

    What do you think?
     
  2. tax is charged on the whole amount in lawn apps.
     
  3. Kelly's Landscaping

    Kelly's Landscaping LawnSite Platinum Member
    Posts: 4,278

    I think that would depend on the state I know CT you pay 6% sales tax on services and goods. We get sales and use permits that allow us to buy items whole sale with the idea being we will collect the taxes when I resell the product to my customer. In other words they knew it wouldn't be right to collect the sales tax twice on the same item. But what ever my final bill is to my customer add 6% then when the month ends I have 30 days to file and give the state its money. Typically 1500-2000 dollars each month.
     




  4. read this, it pretty well sums it up.

    http://www.iplla.com/Default.aspx?pageId=870954&mode=PostView&bmi=540448
     
  5. SHPSLLC

    SHPSLLC LawnSite Member
    Posts: 42

    Do you find it easier to add tax to the price of say a mowing job, (for example a 30.00 lawn would be charged at 31.80) or to just take it out of the 30.00 you would collect for the lawn? Im starting out mowing on my own for the first time this year and i wasnt sure how most people add tax to the bills.
     
  6. JayD

    JayD LawnSite Silver Member
    Posts: 2,060

    Hey thanks JB, that does sum it up for the mowing.....I don't do apps, and do very little mulch, not enough that matters anyway. I used to think that the stores where you buy you food from could only charge sales tax on the their main thing (food) and not on like shoe laces, toys and such. Maybe that has changed.

    But still, I don't think they should be charging sales tax on the $3.00 fuel surcharge do you? I'm not getting that gas.....
     
  7. Roger

    Roger LawnSite Fanatic
    Posts: 5,917

    The rules regarding sales tax are unique to each state. If you have a license to collect sales tax, then you have a copy of the rules that apply. Blanket statements that transcend state lines are dangerous and can be misleading.

    SHP... Again, you need to check your state's rules. I suspect that most states require the tax as an itemized entry on your invoice. If you charge $30.00, and then choose to take out the sales tax, you are not providing the itemized entry. You can charge $30.00, and add $1.80 as a separate entry -- this may be how your state requires the invoice, or sales receipt, is to be prepared.

    State by state ... Use the rules for YOUR state.
     
  8. CLARK LAWN

    CLARK LAWN LawnSite Silver Member
    Posts: 2,526

    if you do " just tke it out of the total" be careful for 2 reasons, 1 like said above it may be required to be listed a separate line item and 2 if the tax rate changes then you can loose more money. our rate has gone from 6% a few years ago to 6.75% now. not much but it can add up quickly.
     
  9. Kelly's Landscaping

    Kelly's Landscaping LawnSite Platinum Member
    Posts: 4,278

    No you make the price and add the tax as an after thought like your 31.80 example. Now sometimes in a rare case the client may tell you what they want a job to cost including the tax and if you agree to it you end up with the even number but your price ends up with some odd ball figure. Worse still it sometimes ends in a half a cent so you got alternate the price a penny every other week. Total headache if you can avoid this do it.
     
  10. SHPSLLC

    SHPSLLC LawnSite Member
    Posts: 42

    Thats what i was thinking, it seems much easier to keep track of the sales tax when it is listed seperately. Well thanks for the info, that is what i will do.
     

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