Customer refuses to pay sales tax!

Discussion in 'Business Operations' started by K.Carothers, May 5, 2006.

  1. K.Carothers

    K.Carothers LawnSite Bronze Member
    Messages: 1,124

    I can't believe what a customer did today. I have a new customer that has more weeds than grass. It is my smallest lawn in the middle of my route. I'm talking about a 10 min job. He said he was going to pay me the $50 for the invoice I sent for the 2 cuts in April. I told him the price is on the invoice then continued cutting. When I finished, he walks out and says his book keeper said that he does not have to pay sales tax and hands me a check for $50 instead of 53.50(invoiced). I couldn't believe that a customer had the nerve to tell me that he is not paying the sales tax. I asked for the book keepers name and number but nothing. I did grab the check(learned that lesson before) but I just don't know what I should do.

    Any suggestions???

  2. sicnj

    sicnj LawnSite Senior Member
    Messages: 258

    put a lien on his house jk. What i do is print out the laws and hand him a copy. Don't do it unless he pays. or charge him 28 a cut instead of 25 take care of the taxout of that.
  3. 1MajorTom

    1MajorTom Former Moderator
    Messages: 6,073

  4. Roger

    Roger LawnSite Fanatic
    Messages: 5,943

    I too have had it happen on a couple of one-time jobs. I just changed the amount so that the combined total equalled the value of the check. It didn't amount to much --for me, not worth making a hassle.

    I did have a first-time thing on April's invoices. The check was only for the work, and sales tax was not included. This is a long-time customer and I think she just read the invoice wrong (started using QuickBooks invoices this season). I have registered her payment against the invoice, leaving the sales tax as an open item. It will show up in her May invoice; I am not going to let this one slide, it is too much.
  5. K.Carothers

    K.Carothers LawnSite Bronze Member
    Messages: 1,124

    That is great Jodi, thanks.

    He also mentioned that he talked with his neighbor and they don't pay sales tax for lawn service. I immediatly said" they are breaking the law".

  6. 1MajorTom

    1MajorTom Former Moderator
    Messages: 6,073

    We have had this happen to us before, customer called, left message on the machine questioning their invoice amount. I printed out the sales tax law and mailed it to them, they paid their invoice in full including the sales tax, then enclosed a note saying that they no longer wanted our service.
    What can you do? Nothing, if that's how people want to be, then so be it.
  7. K.Carothers

    K.Carothers LawnSite Bronze Member
    Messages: 1,124

    I hear what you are saying but where is the line drawn?
    What happens if this customer talks with another customer of mine? I want everyone on a level playing field. I don't want to hide numbers.

  8. topsites

    topsites LawnSite Fanatic
    Messages: 21,653

    I agree... Here in virginia we don't charge tax on services but if we did, what I would do is just give them the total and say nothing further. So, carry this customer with his 50-dollar thing through the end of the year and you only lose 3.50 or so and make sure you do something a little bit FASTER so maybe not quite as good a job but it's only 3-4 bucks ok, so then next year his service becomes 55 and that should take care of it.

    Matter of fact, consider doing this for all of yours: Just include it in there, don't say nothing about it, that is the total for all of it and end of story.
  9. daveintoledo

    daveintoledo LawnSite Silver Member
    Messages: 2,587

    i mailed a copy of the law to curent customers this past winter, and include one in my welcoming letter to new clients.... i also keep a copy of my license to collect the tax in my truck.......

    i add it on to the incoice just like any other good or service that is taxable.... if they dont like it, they are history... its not worth it if they are that unreasonable,
  10. AintNoFun

    AintNoFun LawnSite Bronze Member
    Messages: 1,807

    send them a 1099 for the sales tax since they aren't paying it....

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