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Contractor/Wholesale accounts at suppliers?

Discussion in 'Landscape Architecture and Design' started by KurtisInIowa, Apr 26, 2005.

  1. KurtisInIowa

    KurtisInIowa LawnSite Member
    Posts: 60

    Hi folks,
    I have just started up my biz (4th week) and I'm happy to say I'm so busy I haven't had time to get anything set up properly for the biz 'image'. Beyond getting the trucks painted with my logo, getting my software set up, biz cards/forms, etc. I am wondering about setting up contractor accounts at my suppliers. I gave a hardscape supplier my biz card the other day when purchasing rock and thought i'd get a wholesale rate...but later i noticed the tax on it. What normally happens here? Don't you guys get it tax free and at a cheaper price? Then, you have to add sales tax when you sell it to the customer, right?
  2. Edgewater

    Edgewater LawnSite Senior Member
    Posts: 457

    Up here, we get retail price, less 25% then add tax. Sell at full retail plus tax. you make 25% and at the end of the month, add up all of the sales tax you collect (from customers) and subtract all that you have paid out on expenses and send the difference to the gov't.
  3. DLCS

    DLCS LawnSite Platinum Member
    Posts: 4,378

    You have tp present this supplier with a copy of your tax exempt form from the state. You can't just walk in and show a business card and not pay sales tax.
  4. YardPro

    YardPro LawnSite Gold Member
    Posts: 3,563

    we get 30%-40% off and pay our distributer the tax.. that way we don't have to deal with it..
  5. SCL

    SCL LawnSite Senior Member
    Posts: 543

    You have to apply to the state for a sales tax number to get tax exempt status, they then give you the certificate that you have to present. But, just because you pay tax doesn't mean you can't buy wholesale. Tax numbers in Il require that you file the sales tax once a month, lots of paperwork.
  6. NickN

    NickN LawnSite Bronze Member
    from Alabama
    Posts: 1,010

    To buy wholesale,you have to have a retail sales tax id.You buy wholesale,sell retail,collecting sales tax(which will be a combination percentage according to your state and city).Then,before the 20th of every month(may vary state to state) you send in the sales tax you collected.In Alabama,the 20th is the deadline.If sent in before the 20th,you get a discount,which means some of the sales tax goes back to you.Of course,then that is considered income and your taxed on that also.
  7. KurtisInIowa

    KurtisInIowa LawnSite Member
    Posts: 60

    Ok cool. DLCS, I should have clarified a little more. I asked the clerk about getting a contractor rate, and how do I do that? He said 'Ah, just give me your biz card'. I was thinking they'd ask for a tax id #, or EIN, and as a Sole Proprietor I was going to use my Soc. Sec. #.
    So, it sounds like I need to get a retail tax permit from the state and use that # eh? Or like YardPro says, I think I'd prefer to get a wholesale rate, and pay the tax to the supplier. But then I'd still have to collect tax on any markup I added wouldn't I, so is that really saving any headaches? So far, I've just bid the jobs based on my time/skills/equipment needed, etc. plus materials at whatever their retail cost is, but I know there should be a profit component on materials.


  8. YardPro

    YardPro LawnSite Gold Member
    Posts: 3,563

    you do not have to pay sales tax if the items are sold in a job and not itemized.

    you can mark them up for your estimaating, but when sold as a job, there is no problem.

    in NC there is no tax on labor or service, so we sell as a job....
  9. earthtool

    earthtool LawnSite Member
    Posts: 115

    Some suppliers you have to pre qualify in terms of sales #'s in a calendar year before they will qualify you as a "real" contractor... ex: $2000.00 per year before discount applies.
  10. KurtisInIowa

    KurtisInIowa LawnSite Member
    Posts: 60

    Ok, I'll start checking things out. Thanks for the help folks.

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