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Customer: "What Sales Tax???"

Discussion in 'Lawn Mowing' started by LoneStarLawn, May 4, 2001.

  1. LoneStarLawn

    LoneStarLawn LawnSite Bronze Member
    Messages: 1,415

    Had a new customer call today saying that the sales tax on his invoice was not discussed when we gave him the estimate. He said that he did some research (didn't believe there was a sales tax on mowing) on the matter and found out that "sales tax can be payed by the company or trickled down to the customer". So he has canceled service because he thinks that it looks like we went up on our rate and is looking for another company. We were not going to just eat it....Plus he stated that he would only pay for the mowing fee on the invoice not the sales tax.

    It's funny how a yard can reflect the person who owns the house. His yard is annual rye and weeds and will be gone (its starting now) when the hot days are here. No one else has trouble paying the sales tax. Some people just irritated the hell out of me.
  2. Highpoint

    Highpoint LawnSite Member
    Messages: 153

    Sales Tax? What you talking about Wiillis? You are providing a service. Sales Tax on a service?
  3. Greenkeepers

    Greenkeepers LawnSite Senior Member
    from NE Ohio
    Messages: 695

    Yes , we are required to charge sales tax on a "service". The sales tax people look at it as a product because your place of business is where you are on the lawn that day. I don't like it but I pay it, actually you don't loose any money. It is like a withholding account!!
  4. John Allin

    John Allin LawnSite Bronze Member
    Messages: 1,488

    Sales tax laws vary from state to state.
    In our state, if you do a cleanup and mulch the beds as part of the cleanup - it's taxable.
    If you do a bed mulching and cleanup the beds as part of the mulching work, it is not a taxable service.

    We have Use Tax in PA too. Anything you buy in from out of state is subject to 6% Use Tax unless you pay sales tax in the state you bought the item from (with me so far?). If we buy plants in Ohio and take them to New York, no PA Use Tax. However, IF the truck stops in PA for more than 3 hours - we owe 6% Use Tax to the state.....

    Go figure.....
  5. Mike Nelson

    Mike Nelson LawnSite Senior Member
    Messages: 416

    I bet that truck doesn't stop in PA very often.:D

    Here in NY we pay tax on everything except for on our trucking.

    Mike Nelson
  6. jcoat

    jcoat LawnSite Member
    Messages: 112

    Sales tax varies from state to state and in Oklahoma you do not charge sales tax on a service. Now, if I sell them a plant on an install... different story. There is sales tax, BUT (again this may vary from state to state) you as a business do not pay the tax... you pass it on to the customer and file it.
    Tough sell... I wonder if the guy will be coming back to LoneStar once he figures it's a state industry-thing?
    Last thing, since sales tax is a state thing, anyone out there who doesn't know what to charge tax on just contact the tax commission for workshops in your prospective area. fyi
  7. JLC

    JLC LawnSite Senior Member
    from IA
    Messages: 467

    I would encourage each person to actually call their state and specifically ask which services that you provide are subject to sales tax. In Iowa the only service that I do that isn't taxable is snow plowing. I get so irritated because I know 90% of those out there don't know this and rely on their stupidity to dumb their way through this business. This makes the true professionals look bad because we again cant compete with their price. Idiots...maybe I should just put on my stupid cap and play their game...oh yeah, I'd be the one who'd get caught.
  8. Freetime

    Freetime LawnSite Member
    Messages: 112

    We are required to collect Sales Tax in Texas on lawn maintenance except in new construction in some cases. If you notice in most states accountants, lawyers, and the like are exempt from sales tax. Well let’s think what were most politicians before they became politicians. (Maybe accountants and lawyers eh) who is covering whose butt?

    No, some people cannot believe sales tax should be charged or you need to “figure it in” your good customers will understand. People who refuse are tightwads anyway and would drop at the first increase.

    Information on the subject in Texas can be found at state sales tax site http://www.cpa.state.tx.us/m23taxes.html Look up lawn care or (94-112)

    Nope it is not fair that some lawn care companies pay and some don’t that is just part of this lovely business of exterior maintenance.

    [Edited by Freetime on 05-04-2001 at 07:04 PM]

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