Is my price to low???

Discussion in 'Landscape Architecture and Design' started by southtx, Nov 22, 2007.

  1. KeystoneLawn&Landscaping

    KeystoneLawn&Landscaping LawnSite Senior Member
    Posts: 774

    As for charging sales tax more than once, I believe that its not illegal as long as you remit the tax to the state. A good example here in PA is the sale of a car. If I bought a car last week and paid sales tax on it, then decided to sell it this week, the purchaser would pay sales tax again to the state based on that sales price. One thing for sure, every state is different. Also, you often get differing info from officials in the same state.
     
  2. LawnVet

    LawnVet LawnSite Member
    from SE MI
    Posts: 220

    Keystone-
    I hear what you're saying about the differences in states. That may be the case here. I just know what I was told by the MI Dept of Treausry tax officals. I have their card just in case someone tries stiking it to me. Matter of fact she even told me that with providing the installation of the product and not carrying any inventory I was better off without the sales tax license and canceled my account for me.
    The way the end-user was explained to me is that the product, once installed, will stay owned by the customer. If I was to sell a retaining wall block to a customer without installing it I would have to 1. not pay the tax first 2. have a sales tax license 3. charge the customer sales tax and 4. remit the taxed amount to the state. About paying tax then charging tax, even if you remit it to the state, I would definately check with your state officials on that one. As it was explained to me the actual charging of tax is strictly regulated. A car is different in that you intend to use the product. If you buy cars and sell them a week later often enough the state will start questioning why you aren't performing this as a dealer and will start sniffing around your books...whether you are paying taxes or not. A dealer does not pay tax on the car when they buy it. That is my point. Yet you can take a $5 (tax paid at supplier) retaining wall block and charge the customer $500 for it if you want to...yet if you add a 6% sales tax to that same block you sold for $10 ($10.60) you will get told by the state that you are illegally charging sales tax because the item has already been taxed. This is the exact question I posed to the tax lady and that was her response. Surprised the heck out of me. I had a lot to learn my first year in business...still do!
     
  3. LawnVet

    LawnVet LawnSite Member
    from SE MI
    Posts: 220

    The way the end-user was explained to me is that the product, once installed, will stay owned by the customer.

    What I meant by that is the product is attached to real estate, or "real property" and becomes a fixed object. This distinguishes it from other tangable property like cars.

    hope that clears it up.
     

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