Sales Tax Question

Discussion in 'Lawn Mowing' started by FLD350, Jan 31, 2012.

  1. FLD350

    FLD350 LawnSite Member
    from CT
    Posts: 25

    I have to start charging my customers sales tax for the services I offer. This means I will calculate in an extra 6.35% to the total cost of certain services that I already offer to my clients including lawn cuts.

    I am afraid that if I tack on this extra amount (even though in some cases it literally is only a few bucks more) that some clients will not take it lightly and may consider dropping me. However, by state law and tax regulation I am required to charge it and I am just following the rules.

    My question is has anyone had to deal with this before and any suggestions on how I should propose this to my clients before the 2012 season begins? I don't usually do contracts but I am considering sending out a letter to all my clients before the season starts explaining that I am required to charge sales tax and that the price for certain services will increase accordingly.

    I always make sure to go the extra mile and always perform great work for my customers and I hope they will keep this in mind. I will also try to meet some of them halfway but I can not afford to cut myself short due to the fact that I have bills to pay too!
     
  2. change your wording first, your not charging, your collecting the sales tax for the state.
     
  3. weaver

    weaver LawnSite Bronze Member
    Posts: 1,286

    Funny, you are not retail and it's against the law to tax labor!
     
  4. FLD350

    FLD350 LawnSite Member
    from CT
    Posts: 25

    JB1- Good point, sounds better already!

    Weaver- I am just trying to comply with my state's tax regulations, if they deem lawn cutting to be a taxable service than I have to collect sales tax on it and anything else that falls into the category for sales tax. Furthermore, I am just looking for a little insight on this and if anyone has any experience with having to explain this situation to their clients??
     
  5. Richard Martin

    Richard Martin LawnSite Fanatic
    Posts: 14,700

  6. weaver

    weaver LawnSite Bronze Member
    Posts: 1,286

    Ok just saying in Indiana you can not tax labor. Maybe it's different where you are at. But you are providing a service not a retail shop. Guess i don't know your laws. Sorry!!
     
  7. FLD350

    FLD350 LawnSite Member
    from CT
    Posts: 25

    Haa, Thank you Richard!

    I think I forgot to mention this before but I figured it was kind of obvious, I am required to pay "Sales Tax" to CT, which is the reason that I have to collect sales tax from clients now.
     
  8. FLD350

    FLD350 LawnSite Member
    from CT
    Posts: 25

    Yea, in CT services are taxable.
     
  9. Roger

    Roger LawnSite Fanatic
    Posts: 5,917

    What do you mean by "have to start charging ...?" I know the "charging" has already been discussed as "collecting," but it is the "start" part that is confusing. Did CT just pass a new law about collecting sales tax for the services you perform, or did you just start your business?

    In either case, your customers should have no issues with the added line item on their invoice. If the first case, then they will know a new law has gone into effect, and it includes the kinds of services you provide. They will know that in previous years, were were not to collect and remit the sales tax, but in 2012, this is a state requirement. You have good reason to have the line item on your invoice. The change from season to season is easily explained, and something for which you have no control.

    If the second case, just starting your business, then you have no past history of charging for service, or collecting the tax. Therefore, the customers should not have reason to compare season over season, because you have no past history with them.

    In either case, I don't see why this should be a problem for you. Maybe I have misunderstood your first statement as discussed above.
     
  10. weaver

    weaver LawnSite Bronze Member
    Posts: 1,286

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