customers who dont pay sales tax?

Discussion in 'Lawn Mowing' started by Ramairfreak98ss, Jan 31, 2007.

  1. Ramairfreak98ss

    Ramairfreak98ss LawnSite Silver Member
    Posts: 2,210

    I seem to have run into all sorts of odd ball customers at the end of 2006. I have a couple people recently sent me checks in the mail for bills that DONT include the sales tax!

    My bills are CLEARLY written out, the subtotal, sales tax in Nj @ 7% and their grand total. Here is one from one customer i received today.

    Subtotal: $125.00
    Late FEE: $5.00 November 2nd 2006 Bill 30+ days past due
    7% NJ Tax $9.10
    Grand Total: $139.10

    Looks nicer on the bill. This guy was 2+ months late, i called him on the phone last week and he of course started to refuse to pay $5 for being late when he claimed this was the first bill sent to him. How am i to prove without $4 delivery confirmation through usps? :confused: This ahole, the work was done in August 2006! He should have a $5 charge for every month since.. Anyway today i get a check in the mail finally for $125.00 written out to my company.... So i wait 6 months for his payment, send 4 bills, letters and stamps etc and he doesnt pay the $5 charge OR the tax either? This is pissing me off to no end. Its my 2nd customer at the end of this year now that doesnt feel they should have to pay the sales tax:hammerhead:
  2. ChadA

    ChadA LawnSite Senior Member
    Posts: 521

    I never charge sales tax for this reason. I just add around 10% to my origonal price. I had the same problem last year.
  3. mattfromNY

    mattfromNY LawnSite Bronze Member
    Posts: 1,581

    I dont feel I should pay my sales tax, or property tax, or insurance, or anything else... but guess what? I HAVE to, so does he. If I was in this situation, I would pick up the phone and call him. If this didnt work, I would have to go legal on his azz. Seems petty for a few bucks, but if everyone keeps letting him get away with it, he'll do it again and again.
  4. mattfromNY

    mattfromNY LawnSite Bronze Member
    Posts: 1,581

    I just read ChadA's reply. I like that system, except for trying to keep it all straight when it comes accounting time!?!
  5. chuck bow

    chuck bow LawnSite Senior Member
    Posts: 701

    Is he From India or Pakastan ?
  6. ed2hess

    ed2hess LawnSite Fanatic
    Posts: 13,207

    Just send a letter to your state controller and copy the customer explaining that the customer refused to pay sales tax.
  7. Roger

    Roger LawnSite Fanatic
    Posts: 5,923

    I don't believe Chad's approach is valid in PA. I believe the specific amount of tax has to be itemized, shown to the customer.

    I know my accountant would never approve of that approach anyway. Your approach means the total collected is equal to the gross sales, so you are paying income tax on an inflated amount. Even if you have a few cases where the check comes without the tax included, I would think you are much better off with a reduced gross sales for income tax purposes, and adjust the service charges so that the total amount of the invoice equals the amount of the payment. I would think an audit of your records would raise great difficulty for you.
  8. Woody82986

    Woody82986 LawnSite Silver Member
    from DFW, TX
    Posts: 2,128

    Go knock on his door with all of the invoices, his check that you haven't cashed yet, the citation from the tax code that stipulates that he is liable for the sales tax and the phone number for the dumbest damn attorney in town for him if he doesn't pony up the dough.
  9. PLS-Tx

    PLS-Tx LawnSite Silver Member
    from Texas
    Posts: 2,385

    I like that, may try it, thanks.
  10. Team-Green L&L

    Team-Green L&L LawnSite Bronze Member
    Posts: 1,776

    Always ask if they are tax exempt. We have included that in our contracts because of that.

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