How do you bill and deal with sales tax if you have to pay it in your state?

Ironman1088

LawnSite Member
Location
Pittsburgh, PA
I live in PA and of course there is sales tax on lawn service... I am getting familiar with Yardbook and I like how it user friendly and they calculate sales tax on your invoices for you.

My question is, do you add sales tax on your invoices (if this applies to you) and do any of your customers complain?

Also, how do you bill, once a month with a credit card on file (and eat the processing fees) or the old school way and accept cash or check?


In a perfect world, I would love to get all my customers on the same page by paying with the same method so the accounting and book keeping is easier and not have to run to the bank multiple times a week...

Any advice would be appreciated! Thanks!
 

Freaky Fido

LawnSite Bronze Member
Location
Northeast USA
Yeah, I add the tax onto my invoices and make it clear to the customer up front that all of my prices are plus tax. Yes, I've had many customers complain that their last lawn guy didn't charge them tax. I explain that I don't charge tax, I just collect it for the State as I'm required to by law and that I'm not going to go to jail so that they can save $3. If they're a tax-exempt entity such as a church or non-profit, be sure to get a copy of their certificate to keep on file.

It may be different in other states, but in mine the sales tax on materials is collected by the contractor, not the vendor where they're purchased. So you need to set things up with them so that they sell you the goods tax-free and then you bill the tax on your invoice, including on any mark-up that you may apply. On some items such as grass seed and straw that I keep on hand to repair any turf damage that I cause, I pay the tax at the time of purchase, since I'm not billing it to my customers.

I don't accept credit cards so all of my customers pay by check, many of them from their bank's bill pay feature. I don't "run to the bank" anymore for deposits. I do mobile deposits via my phone. It can get a bit time consuming if I have a lot of them but I can do it in the evening after hours.
 

Freaky Fido

LawnSite Bronze Member
Location
Northeast USA
One more thing - you certainly can include tax in your prices if you choose. The calculator I use for the business has +TAX and -TAX buttons on it. So if I wanted to bill $100 with tax included, I would just enter 100, hit the TAX- and it will tell me that the taxable amount to bill is $94.03.
 
OP
Ironman1088

Ironman1088

LawnSite Member
Location
Pittsburgh, PA
Thanks for the response. Being up front with the customers is the best way to go. It's not like you are keeping the sales tax, you are just the middle man for the state. I hate that we have to charge it but when you get a plumber, electrician or any other contractor come to your house, there is sales on the bill and we don't complain. It is what it is, maybe they look down on us like we are less reputable because we cut grass so we don't have to follow the rules...lol

Do use a CRM to generate invoices? Any reason why you don't accept CC? Don't want to pay the fees, I don't blame you....This upcoming year will be my first full time and I'm going back and forth on how to bill.
 
OP
Ironman1088

Ironman1088

LawnSite Member
Location
Pittsburgh, PA
One more thing - you certainly can include tax in your prices if you choose. The calculator I use for the business has +TAX and -TAX buttons on it. So if I wanted to bill $100 with tax included, I would just enter 100, hit the TAX- and it will tell me that the taxable amount to bill is $94.03.
Thanks for that, Is that an online tool? Where did you get that?
 

Freaky Fido

LawnSite Bronze Member
Location
Northeast USA
Many lawn guys work for cash or have checks written to them personally. Not a route I would recommend. My state comes down really hard on those who evade paying our sales and use tax. Then there's the Feds to worry about as well.

I use QuickBooks for my invoices.

Just never found a real need to accept cards and nobody has even asked.

It's just a desktop calculator that I picked up at Staples for like $10. Look at top left keys. You just program it once with your applicable tax rate.
IMG_20210205_104145623.jpg


Edit - Wow, it looks like I need to clean and disinfect that calculator, lol
 
OP
Ironman1088

Ironman1088

LawnSite Member
Location
Pittsburgh, PA
Thanks! I appreciate it. I'll have to pick one up! It will make my life alot easier! Yeah, there is alot of guys that give this business a bad reputation but if you are a good quality business owner your customers will pick up that real quick.

What is the name of the app you use to deposit checks? Is there a fee? Thanks
 

Freaky Fido

LawnSite Bronze Member
Location
Northeast USA
Thanks! I appreciate it. I'll have to pick one up! It will make my life alot easier! Yeah, there is alot of guys that give this business a bad reputation but if you are a good quality business owner your customers will pick up that real quick.

What is the name of the app you use to deposit checks? Is there a fee? Thanks
It's part of the mobile banking app provided by the bank. I think all banks have one now. Some are easier and quicker to use than others. My business accounts are with Bank of America. Their app is great, but I really can't stand them as a bank anymore. My smaller regional bank that I use for personal accounts also has one, and I know that my son also uses the one for his small regional bank.
 

andersman02

LawnSite Bronze Member
Location
Snowy MN
If I were to do it over, everyone would have ccs on file
 

kinneberg lawn service

LawnSite Senior Member
My suggestion is to use something like quick books an old version would work. Just set the taxable items and services and your collection is set up. Just have to file your return at your scheduled time. Be sure to look into what is taxable and what is not it can be confusing mess. Think of it as collecting for the state rather than a charge. calculators work to figure the tax but recording how much you collect when file with such a manual method could be a nightmare. States and local tax agencies are not forgiving.
 

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