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Business/Tax question

Discussion in 'Business Operations' started by rmcneil, Jan 4, 2011.

  1. rmcneil

    rmcneil LawnSite Member
    Messages: 7

    Hope this in the right thread,This spring I will launch my lawn care company. I will be applying for my business lic(assuming i need one in NY, still reading up on that) Anywho, A question on billing, Being legit, If i have 15 residential accounts, charge each $xx.xx Do i charge them tax? Or do I take care of that on my end? I tried searching for this answer, and no luck.So thanks in advance for the help.

  2. walker-talker

    walker-talker LawnSite Platinum Member
    from Midwest
    Messages: 4,771

    I think that may vary state to state. In the state of KS and many other states, no sales tax on mowing services.

    CLARK LAWN LawnSite Silver Member
    Messages: 2,526

    if it is taxable then you charge it to the customer. dont just eat the tax out of your profits, 1 it may be illegal( is in Ohio), and 2 it can get expensive, the more you get the more it will cost you, and what happens when the tax rate changes.
  4. lukemelo216

    lukemelo216 LawnSite Bronze Member
    from ...
    Messages: 1,267

    yes you charge them sales tax if it is a taxable service. Wisconsin has a whole big print out solely for the landscape industry on what is and is not taxable, its really cool. Id get with an accountant and discuss this stuff with him. He will lead you in the right direction as to how you want to set up your business (LLC, Corporation, etc) He will also be able to tell you what services you provide are taxable and what isnt.

    In Wisconsin the state sales tax is 5.0% but then counties have their own sales tax rates too. The county im in is .5% but the county to the north is only .1% so be sure to look into that as well. I dont know if you live on a state border or not, but if you provide a service in another state, you dont charge them sales tax, becasue your not paying tax to that state.

    You charge sales tax in addition to the price for the service, and be sure that on your estimates, and proposals that you have a thing under the price section that states prices subject to sales tax. IF I have a 25$ lawn and i have to pay 5.5% sales tax is then 26.38
  5. Fvstringpicker

    Fvstringpicker LawnSite Fanatic
    Messages: 7,670

    Contact the department of revenue in NY, or better go by a regional office, and talk to an agent about what is taxable and what is not.
  6. lawnpro724

    lawnpro724 LawnSite Silver Member
    Messages: 2,201

    No tax on service in ILL at least not yet but everything else is taxed to death.
  7. coyote10

    coyote10 LawnSite Member
    Messages: 13

    to answer your questions;
    Yes, you need to charge sales tax and show it on their invoice. how you choose to charge it is up to you.
    You need to go to your county clerks office and file a dba if you are using anything other than your name for doing business. then you need to get a certificate of authority from the state to collect said sales tax.
  8. DistinguishedLawn

    DistinguishedLawn LawnSite Member
    Messages: 8

    To clarify, you can only charge someone sales tax for things that are actually taxable. Most of the time that is for physical "goods" only, not labor. In Colorado, service (i.e. labor) is not a taxable item, but you can charge sales tax on goods that you sell. Examples of goods would be when you replace irrigation components, mulch, or trees and shrubs that you plant for someone.

    You also have to be set-up to collect sales tax. So make sure that you are registered to collect tax from someone, then do this one important thing...ACTUALLY PAY THE TAXES THAT YOU COLLECT. I'm kind of laughing while I typed that, but I have seen several businesses (including one that I sold to a buyer) quickly close up shop with a giant "SIEZED" banner infront of their property.

    Good luck in 2011!

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