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State and Federal Taxes

Discussion in 'Business Operations' started by dutchman, Jan 16, 2007.

  1. dutchman

    dutchman LawnSite Member
    from CT
    Messages: 106

    Hi Guys,

    Just like to see how you Guys do this,do you Bill only State ( Sales ) Taxes or also Federal Taxes to your Customers.

  2. grandview (2006)

    grandview (2006) LawnSite Gold Member
    Messages: 3,465

    State sales tax you collect Fed tax you pay.
  3. tthomass

    tthomass LawnSite Gold Member
    from N. VA
    Messages: 3,498

    I collect $0 tax. I detail out the job with the price. If it needs to be broken down I say $x.xx for these trees and $x.xx for the patio but never a full break down.

    Tax purposes it is viewed as all labor vs product mark up and I don't have to collect sales tax. Customer never knows I pay $x.xx for the tree and charge them $x.xx to get it and plant.
  4. grandview (2006)

    grandview (2006) LawnSite Gold Member
    Messages: 3,465

    NY is tax supplies and labor.
  5. Roger

    Roger LawnSite Fanatic
    Messages: 5,943

    Obviously, state requirements vary on sales tax matters. For CT, you need to check out what CT requires. If a sales tax is to be collected, then it can be passed to the customer, and then you are responsible for sending the collected monies to the state. Remember, nobody ever "charges" a sales tax. As a vendor, you are merely collecting the tax money on behalf of the state, and then passing it along (at no cost for your work in doing so).

    Federal income taxes apply to everybody, and are never part of a customer's breakdown on their invoice.

    From your question, apparently you are not working with an accountant, or somebody familiar with the tax structures. I would highly recommend spending a couple of hours with an accountant who knows the tax requirements for your area. You need to establish right practices for your business at the very beginning.
  6. dutchman

    dutchman LawnSite Member
    from CT
    Messages: 106

    My Customers paying Tax I was just wondering how everybody else does it never to old to learn something new.

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