Ohio considers collecting sales tax on SNOW Services

Discussion in 'Business Operations' started by LawnLad, May 20, 2003.

  1. LawnLad

    LawnLad LawnSite Senior Member
    Messages: 738

    For those contractors in Ohio that currently offer snow plowing services, be aware that Ohio is considering adding snow realted services to the list of taxable services.

    This is not good for the industry. The same house bill that proposed taxing landscape design seeks to add snow services. The ONLA successfully defended the case against landscape design services being added to the sales tax list. Snow services must also be excluded.

    I posted a thread on Plowsite with information on how you can act on this information. Contact SIMA or ONLA for further inforamtion. As well, I have also posted a letter to the state senators which you can print out and mail.

    This information can be found at:

  2. Green in Idaho

    Green in Idaho LawnSite Senior Member
    from Idaho
    Messages: 833

    Why do you think it is not good for the industry?
  3. kickin sum grass

    kickin sum grass LawnSite Senior Member
    Messages: 628

    I did not realize it was not a taxable service. I have been charging tax on snow for years. Maybe I should see if I can get it back and surprise the custmoers with a credit on there next bill. Yeah right as if the dept, of tax would give it back.
  4. Green in Idaho

    Green in Idaho LawnSite Senior Member
    from Idaho
    Messages: 833

    In Idaho it can be done by amending your returns to request the refund. Attach a statement for the reason.
  5. tiedeman

    tiedeman LawnSite Fanatic
    from earth
    Messages: 8,745

    I personally feel that the taxing of services is just another pain. I can understand goods, but not services.
  6. LawnLad

    LawnLad LawnSite Senior Member
    Messages: 738

    There are many reasons why the tax isn't good, all of which I posted on the plowsite thread. But the overriding reason for me personally is that government needs to learn how to make the tough decisions and cut expenses rather than constantly looking to raise "revenue" [taxes] when the kitty falls short. There is sooo much waste in government spending that if the belt is tightened in Columbus they wouldn't need to increase taxes. In fact, I'm sure we could even get a refund. It just takes a Governor and state reps with some guts to make the necessary decisions.

    Regarding a refund... don't laugh. You might just be able to get a refund for your customers or provide them with the paperwork and information to file. We collected sales tax from a church who paid the sales tax as an oversight (they had not given me the tax exempt form which I had requested several times). Ultimately they were able to go back to the state for a refund. You might look into it.
  7. Green in Idaho

    Green in Idaho LawnSite Senior Member
    from Idaho
    Messages: 833

    Your points express that increasing taxes in not good. I agree.

    But you didn't say why it's not good for the industy. When in fact it could be good for the industry. A sales tax requires a permit and an acccont. That means every ligitimate operator would have a permit. Someone who is not operating legitimately will stick out like a sore thumb. Therefore the Ohio revenuers will be able to pursue them more easily. I previously worked for our state tax agency and we LOVED those type of people they were easy to find and they meant big dollars. A review of them could generate much more than the legitimate types. If someone works doing a tax activity and doesn't collect the tax, then comes out of the owners pocket. Mr. Jones you did 100,000 of businss and did not collect tax. You owe us 6,000 + penalty & interest. Boom, they are out of business. End result, less people doing snow removal under the table, less scrubs, less guys down the street trying to make a buck and lowering the prices of the pro operators. That sounds good to me.

    Down side is the paper work for the contractors. Not a huge deal...

    If the tax base is increased (taxing services also) the overall tax rate can be decreased- that is good. I KNOW state legislature do not operate that way, but that is the theory.

    Remember your issue next time it snows 5 feet in Ohio and there are not enough govt plow trucks to clear the roads. Everything costs.
  8. LawnLad

    LawnLad LawnSite Senior Member
    Messages: 738

    Green -

    You make some good points. For the sake berevity and redundancy I did not repeat my points that I made on plowsite - the thread is on the first post.

    I agree that collecting sales tax sends the message to the customers that they are dealing with a legitimate operator. However, to sell this argument successfully to legit operators enforcement would have to be guaranteed. Unfortunetly the only thing that is guaranteed is death and the existence of taxes. No one can guarantee that enforcement will be stepped up or even occur. Looking at the situation realistically, revenue agents aren't out looking for the operator picking up $10 or $20 K in snow plow sales. Generally this is an add on business for a roofing company, service station, landscape operator, tow truck service, cement contractor, etc. Most trades don't collect sales tax on their work so they are not set up to do it. Will they go through the hassle for $20 worth of revenue? They may still be declaring the revenue, but they're not stating from what service line they earned it.

    Enforcement is unlikely or will be as predictable as the snow fall. Therefore the small time operator who flies under the radar scope will escape the inconvenience while the burden falls to the responsible contractor to do what that which he is required.

    Lastly, I can not on good conscience accept the premise that implementing this tax will therefore decrease the need for other taxes. Politicians have very short memories and they never seem to recall or consider the need to reduce taxes. How can you trust the folks in the capital when they promote a state lottery to help fund schools with additional revenues when in fact all they did was take lottery funds to pay for schools and then redistribute the general funds from schools to other programs. Effectively there was no net change in school funding though the tax was promoted as a method of providing "additional" funding. Bottom line - don't believe the spin. The only thing you have to fall back on is the written law and then that will be subverted for the short term gain if allowed. It just depends on how hard you want to fight to protect the law as to whether politicians will get away with their subversion. Therefore - I just choose to say no since any tax increase in my book is a tax increase no matter how you spin it and a tax increase means less money in my pocket.
  9. Green in Idaho

    Green in Idaho LawnSite Senior Member
    from Idaho
    Messages: 833

    Your representative are people just like you.

    Of the people, for the people, BY the people....

    Good luck with it.
  10. NYRookie

    NYRookie LawnSite Member
    Messages: 240

    Here in NY, we have to charge sales tax for snow removal, landscaping and lawn care. Just another way for the state to waste more money.

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