charging taxes on services

Discussion in 'Business Operations' started by andy_b, Feb 18, 2001.

  1. andy_b

    andy_b LawnSite Member
    from Texas
    Messages: 2

    I was wondering if all services in the lawn buisness are "taxable" to the customer. I know most things are taxable, I also know that you dont pay taxes on "advertisement" and that is a "service".
    I took over a monthly lawn maint. job and we agreed on $200.00 month, since that was what her last guy charged her. I sent her a bill for $216.00, thats with "tax" included. She mentioned that the last guy just charged her a flat $200.00, now did he "back out" the taxes and report them or is this a service which isnt taxable?
    One other thing I'm curious about is "contract" labor. Can I do "services" for people and make up to $600.00 per customer, per calendar year before I need to charge them "taxes"?
    Any help is greatfull!
  2. John Allin

    John Allin LawnSite Bronze Member
    Messages: 1,488

    Most states publish what is taxable and what is not.
    Contact your state dept. of revenue and request a copy of this document. Most will gladly send it to you.

    I would guess that the only way you'll get a definitive answer on this forum is from someone from your state that has been through some sort of audit. Audits are an unfortunate way to "learn" what's right and what's wrong.
  3. thelawnguy

    thelawnguy LawnSite Silver Member
    Messages: 2,411

    You should probably check with your state dept of revenue services. Every state is different.
  4. jdjoe_97

    jdjoe_97 LawnSite Member
    Messages: 50

    I know in Indiana that lawn services are NOT taxible. Now
    fert is and so would be plants or anything that you had to purchase to replant or use in direct production. I tried to get a retailers tax ID, this allows you and I to purchase anything that is in direct production of our "product" to be purchased tax free to us. BUT no DICE!!! There is a limit in Gross dollars sales on the minimum to require a ID.
    And I don't do enough fert to justify.
  5. LoneStarLawn

    LoneStarLawn LawnSite Bronze Member
    Messages: 1,415

    andy_b..I have a link on my webpage under FAQs that explains tax on services in Texas check it out...The previous guy may have charged her $200 which included taxes. We did not go through an audit to find this out, we made sure that we studied before starting a business.

    [Edited by LoneStarLawn on 02-18-2001 at 09:19 PM]
  6. BDP

    BDP LawnSite Member
    Messages: 8

    Hi Andy, new to and loving it!!! We own a small landscaping company and what we do is say the bag of fert. cost $20 and we usually can get two lawns done with one bag (residents) we charge them $40 or $45 a pop. So we have made a small profit for time of spreading, tax and materials. It seems to work for us. I have not really heard of landscapers charging tax around here for services, but I will start asking around to see. We just charge a flat fee for cutting grass per customer and for mulching a base rate per man and hour plus materials of mulch (inflated for a profit).

    [Edited by BDP on 03-02-2001 at 03:21 PM]

    Messages: 72

    We charge state sales tax on goods and labor,depending on what county the service is performed,depends on the %.

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