Sales Tax?

Discussion in 'Business Operations' started by 1grnlwn, Apr 8, 2002.

  1. 1grnlwn

    1grnlwn LawnSite Bronze Member
    Messages: 1,261

    Am I the only person not charging sales tax for applications? I never have and don't remember seeing it on competitors invoices either. Is it a state thing? Just saw price comparisons on another thread and got me thinking.

  2. heygrassman

    heygrassman LawnSite Senior Member
    Messages: 509

    Sales tax would be state specific..

  3. SCL

    SCL LawnSite Senior Member
    Messages: 543

    Since we're from the same state I'll tell you what I've been told. As long as you price your installs by the package and pay your sales tax up front, you can charge a flat install fee. Gets you away from the tax number hassles, too.
  4. LawnLad

    LawnLad LawnSite Senior Member
    Messages: 738

    The sales tax laws/stipulations in Ohio are truly funny (and very frustrating) to read. If you can make heads and tails of them, you're a genius.

    Basically maintenance services are taxable, both materials and labor. Mowing, fertilizing, etc.

    Any landscape installation (hardscape) is not taxable to the customer, as you will pay sales tax on materials at the point of purchase for the materials. No sales tax on the labor. This would cover patios, fences, larger retaining walls, etc.

    However, there are exceptions. If you install a lawn, plant a tree or bush, then the customer pays sales tax on the labor/materials etc from you - though bed preparation is not defined as taxable. The state breaks this down into, rough grading is not taxed, but spreading of top soil and finish grading for a new lawn is taxed.

    Building a retention wall is not taxed. But building a small retaining wall around a tree is taxed.

    So when we go to buy our materials, in theory, I should specify that the top soil I'm going to use to install new beds, which is not taxed to the customer, is different than the top soil used for a lawn installation.

    If I install a patio (not taxed), drainage and beds (not taxed), and I then spot seed the lawn on the way out of the job (taxed), I'm supposed to keep track of when I pay sales tax up front on materials versus when I'm exempt and then charge the customer accordingly.

    If I buy mulch to finish a planting, not taxed. If I mulch for maintenance, it is taxed.

    Abosolutely insane.
  5. ohiolawnguy

    ohiolawnguy LawnSite Senior Member
    Messages: 397

    you arent kidding lawnlad. for that reason, we charge sales tax on everything except snow plowing. i doubt the state will ever make a fuss about getting extra money each month.

    only had a few customers ever complain about it. Ì just tell them to call former governor voinovich. it was his idea to begin with.

    oh an BTW, for the time spent to send the state ther money by the 23rd of each month every month, we get a whopping 1/2 of 1% of that. whoopie.
  6. rodfather

    rodfather LawnSite Fanatic
    Messages: 9,501

    Glad I don't live in Ohio...though New Jersey ain't all that much better when it comes to understanding sales tax.

    I remember a while back reading about how diffferent States determine what is sales taxable and what is not. An interesting point was made in that some States do not apply sales tax to a to a certain situation (patio, iririgation system, pavers, hardscape, retaining wall, etc.) due to the fact they (State) will get their "share" when it comes time to reassess the increased "value" of that property.

    As it be, they will get their money one way or or later, too.

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