Do you charge sales tax on a job or just for the materials?

Discussion in 'Landscape Maintenance' started by Greenlawn Guy, May 23, 2011.

  1. Greenlawn Guy

    Greenlawn Guy LawnSite Member
    Messages: 8

    Hello everyone. I'm about to send a bill to a customer and I'm not sure how to charge for tax. Do I need to charge tax on the entire bill or just for the materials? I paid tax on the mulch and stone that was delivered to the site but what do I do about labor? Just have my flat rate and pay it as income tax at the end of the year? I'm licensed and insured and want to pay all my taxes.Also this is an LLC. I'm sure there would be a side job here or there but I want to be covered incase anything goes wrong. Also, how do I do taxes for someone who just gets their lawn cut every week for $45.00? Just call that my gross income and pay taxes at the end of the year?A little confused on this and going to deal with an accountant for a few things but wanted to get your opinions. Any help is greatly appreciated.
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  2. Km81

    Km81 LawnSite Member
    Messages: 62

    You collect sales tax on any service you perform, including lawn cutting, and landscaping labor
  3. Greenlawn Guy

    Greenlawn Guy LawnSite Member
    Messages: 8

    Thank you. Wasn't sure about that. So just put sales tax on the grand total for any bill?
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  4. Darryl G

    Darryl G Inactive
    Messages: 9,500

    It varies by state. Not sure about NY but here in CT landscaping services are taxable. I think you definitely need to speak to an accountant and get things all figured out.
  5. 4 seasons lawn&land

    4 seasons lawn&land LawnSite Gold Member
    from NY
    Messages: 3,613

    You tax the whole thing, labor & materials. If the service qualifies as a capital improvement, they (the customer) can provide you with an ST124 certificate of capital improvements and then you only have to charge tax on the materials, not labor. Most of the time customers are so leery of anything goverment related that they'd rather just pay sales tax. The "business men" types will love it though.

    Make sure you have a tax ID number and are legal to collect tax
  6. Smallaxe

    Smallaxe LawnSite Fanatic
    Messages: 10,082

    Every state may be a little different, but if you pay sales tax when you pick up the materials, you do not retax when you pass it on to the customer... If you resale to the customer, at a higher level, you must pay the sales tax on the additional amount...

    The right way to resale, is to use your tax number to get your product, tax free... For me it is too much paperwork, so I just get reimbursed for wht I paid out, dollar for dollar and there are no sales tax issues...

    It sounds like you had better talk to the guy that made up your llc, about sales tax in your state...

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