Tax Id #

Discussion in 'Business Operations' started by prairie, Dec 7, 2001.

  1. prairie

    prairie LawnSite Member
    from kansas
    Posts: 115

    CAN ANYONE TELL ME WHAT THE BENEFIT IS BY BUYING MATERIAL W/ A TAX ID# COMPAIRED TO PAYING TAXES WHEN YOU BUY?
     
  2. GroundKprs

    GroundKprs LawnSite Bronze Member
    Posts: 1,969

    In most states the sales tax (or use tax) is to be charged to the final consumer of the product. That way intermediate handlers of the product do not have to pay any taxes on the item, and the taxing authority gets the tax on the final sale price (usually the highest cost of the article or service).

    In IN, if you buy plants at the nursery, and you have a valid tax # and Nursery Dealer License, you will be charged a wholesale price, say $500. Now the retail price at the same nursery might be $800 for these same plants; that is what a homeowner would pay walking in off the street. You install these plants and charge your customer $900 for the plants plus labor. You need to mark up the cost of the plants to pay for your time in locating and delivering them, and to cover replacement of plants under your gaurantee.

    In this scenario, you could just pay the nursery tax for the $500, and add that tax amount to what you charge the customer. But then you have upsold the items by $400, and the state did not get the tax on this $400. If you get caught, you will have to pay the tax out of your pocket, where the customer would have paid it originally if you did it right. On top of the tax due, you will also be hit with fines, penalties, and interest.

    Contact your state tax office to learn how to do it right. In most states, if you are selling something, you are considered a retailer.
     
  3. I'm not sure it is the matter of advantage to having one so much as it is HAVING to have one. In Arizona you have to have one, it is considered a business license. I have one for each city I work in also, can be a paperwork nightmare at times.
     
  4. prairie

    prairie LawnSite Member
    from kansas
    Posts: 115

    ON THIS SUBJECT FOR ACCOUNTING PURPOSES, WHAT TYPE OF SOFTWARE HAS ANYONE USED TO KEEP THEIR RECORDS? I WOULD LIKE TO BE ABLE TO KEEP THE RECORD FOR EACH INDIVIDUAL CLIENT AND HAVE THE SOFTWARE LINKED TO THE DESIGN SOFTWARE WHERE I CAN HAVE THE EST AND COST OF A JOB UNDER THE CLIENTS.
     
  5. Lech615

    Lech615 LawnSite Member
    Posts: 105

    Since you brought up the license question, I was wondering if anyone knows if I need a specific license in NY. I already registered the business name with the county, and received my Fed. ID #. I am in the process of getting Insurance, but is there another license I need. I am doing lawn care, but no pesticides.

    Thanks,

    Carl:confused:
     
  6. HBFOXJr

    HBFOXJr LawnSite Bronze Member
    Posts: 1,712

    Most likely you will need a sales tax # and an employers tax id #. I don't know local tax stuff.

    I suggest you call your state division of taxation to start.
     

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