Sales Tax Yes or No????????

Discussion in 'Starting a Lawn Care Business' started by IowaLawnEnforcement, Apr 2, 2007.

  1. IowaLawnEnforcement

    IowaLawnEnforcement LawnSite Member
    Posts: 40

    Should I charge sales tax or just build it into the cost of the service. I am having problems with some customers that dont want to pay sales tax. They think they should'nt have to pay it for having their lawn taken care of. What does everyone else do?
     
  2. MILSINC

    MILSINC LawnSite Member
    Posts: 175

    I have not gotten a sales tax license, and i don't plan to until i start selling equipment..
    the way my accountant explained it is that if i give the customer an invoice that says 'lanscaping' or 'maintenance' as agreed on ESTIMATE # 123, then they will have the detail they need, but to the state, i am not selling goods, but selling services- therefore not requiring a license.
     
  3. dewos

    dewos LawnSite Member
    Posts: 189

    Yes I do Charge sales tax and will always charge sales tax. I would charge it and tell them that You have to charge it by law, and say sorry for the inconvenience.
     
  4. dewos

    dewos LawnSite Member
    Posts: 189

    Pa a license is required check with an acct. in your state. MIL might not have to but you might.
     
  5. Willofalltrades

    Willofalltrades LawnSite Bronze Member
    Posts: 1,000

    Haha just make the old farts pay the $2.75 extra a month lol. Don't take it out of your bottem line. The state charges it for them to pay not you. As for me? You better believe I put it on their bill like a champ.
     
  6. daveintoledo

    daveintoledo LawnSite Silver Member
    Posts: 2,587

    you better check your state regs..... in ohio lawn service....all services are taxable, you dont have to be selliing goods.....

    you just add it to the bill, i have a copy of the rules i presnet to any coutomer that doesnt want to pay the sales tax..... if they still dont... i drop them, and turn them in....
     
  7. Roger

    Roger LawnSite Fanatic
    Posts: 5,927

    Just repeating what has been said many times on LS, nobody "charges" sales tax, we only "collect" sales tax if the state regulations require. As a collector of the monies, you are acting on behalf of the state to make the collection. At some time period (monthly, quarterly, ...?), the monies that have been collected are turned over to the appropriate agency.

    Apparently your state has a sales tax regulation. The only question is to what is the tax applied. In PA, the state web site has a complete statement of the regulation. I would expect your state does as well. If not, your accountant can point you to the documents that govern your state.

    With regard to the customer's response, when you have the regulation, you can show them how it reads. If the tax applies to an ordinary retail item, such as a tool at the hardware store, do these same people only pay the retail amount, and leave the store without paying the tax the store owner is required to collect? I think not. Your business is no different. If you are required to remit the tax to an agency, then your customer has no choice in the matter.

    Your first step is the gain a thorough understanding of your taxing code, and how it applies, or does not apply, to the services you are rendering.
     
  8. zz4guy

    zz4guy LawnSite Senior Member
    Posts: 901

    I also live in the peoples repulic of Iowa. YES you have to charge sales tax. If you don't and you're audited that means YOU get to pay it! So make sure you charge it to these moron customers.

    Go to the Iowa Dept. of Revenue website for small business. Somewhere it will say that lawn service is a taxable service.

    And they wonder why there aren't more businesses flocking to Iowa. It is a very anti-small business state. Ranked near the bottom, worse than Massachusetes on CNN's 2006 best places to do business.
     

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