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Buying wholesale?

Discussion in 'Lawn Mowing' started by Green Acres, Jan 30, 2001.

  1. Green Acres

    Green Acres LawnSite Senior Member
    Messages: 316

    If you buy materials from a place for wholesale then sell them to your customers at retail are you suppose to add sales tax? Is there anything else you need to have or know before doing this? I know I need to call my acct. but thought I would ask you guys first. Since most of you have been there before. Thanks
  2. turfquip

    turfquip LawnSite Senior Member
    Messages: 860

    Yes. But not until you have been assigned a sales and use tax permit number. That's something you need to acquire right away if you intend to be a legitimate business person.

    Your state department of commerce can advise or ask your accountant about it.
  3. Atlantic Lawn

    Atlantic Lawn LawnSite Senior Member
    Male, from Outer Banks NC
    Messages: 949

    I think the term is ultimate consumer, they pay the sales tax. I know of some guys who go ahead and pay the tax even when they buy at the wholesaler and don't worry about filing the forms for sales and use tax.
  4. Island Lawn

    Island Lawn LawnSite Senior Member
    Messages: 632

    Check w/ the local office of your state's dept. of rev.
    I did. The auditor told me not to worry about it. To "keep things simple". Good news to me, but a friend of mine in the bus that has taken a few dept of rev seminars seems concerned that I may have gotten bad advice.
  5. Rex Mann

    Rex Mann LawnSite Senior Member
    Messages: 621

    In ohio when you collect sales tax you have to send it in either quarterly or monthly. Depends on the amount you collect in a specific time.

    I just pay the tax only 5.5% in my county(in Ohio each county sets its own tax rate).

    I add it in to cost of goods sold.

    One less form my CPA has to file and less information I have to provide to him.

  6. GroundKprs

    GroundKprs LawnSite Bronze Member
    Messages: 1,969

    In most states the laws are worded so the ultimate consumer - the entity that gets final use - of any product is to pay the sales/use tax. In IN you can pay the tax on materials yourself and charge the end user a flat fee only if the materials cost to you is less than 10% of the final cost to end user. Exception: in the case of fertilization services, no matter what the materials cost, the whole charge to end user is taxable.

    If you pay $10 and pay tax, then resell at $20 to end user with no tax, the state will take the position that they have lost tax revenue on the $10 markup. If you are audited, you will be charged for this. Landscaper in our area did not charge tax on plants sold for many years. When state finally caught up with him, cost him bigtime. It is surely simpler to pay tax and not charge customer, but it can be costly down the road.

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