To tax or not to tax

Discussion in 'Business Operations' started by kandalawncaremgr, Jan 10, 2013.

  1. kandalawncaremgr

    kandalawncaremgr LawnSite Member
    Messages: 224

    Here's is my issue. TAX,
    Do you charge sales tax to a lawn cut?
    Most people around the burbs of Chicago are flat fees for lawn care. My concern is when to charge tax and when not to charge tax.
    I'm entering my 2nd season here and I am going to the tax guy in a few weeks. Last year I was testing the waters to see if I was going to do lawn care full time and a few friends who run companys said don't worry bout tax your first year cause you have write offs and can expect a loss and such. Then others are telling me you can't tax labor in Illinois. I know I need to talk to an accountant. But what's your guys experience or advice. Thanks
  2. JB1

    JB1 LawnSite Fanatic
    Messages: 5,904

    If the law says we tax. We tax
  3. kandalawncaremgr

    kandalawncaremgr LawnSite Member
    Messages: 224

    I tried at the end of the season to tax a few jobs and the one person "a local accountant " said " are you nuts, you can't tax labor " I felt stupid as hell. Little to say I was not given the job. So that's why I'm posting here just to get other peoples opinion and outlooks. But when I did jobs using materials I did include tax as if they applied . Without question from the customers
  4. JFGLN

    JFGLN LawnSite Bronze Member
    Messages: 1,071

    Are services taxable in Chicago? Should be easy enough to go on-line and find out.
  5. Darryl G

    Darryl G Inactive
    Messages: 9,500

    I don't charge tax, I just collect it for the state...not trying to be a smartie, just the way I look at it and present it to customers. Some may include the tax in their flat-rate price. I don't know what the tax laws are in your state, but there much in my state that isn't taxable, and most professional services are taxable. Avoiding paying sales and use tax in CT will get you in serious trouble. There's a difference between sales and use tax and income tax.

    I just did a quick search and it looks like you only need to charge tax on "sales of tangible personal property for use or consumption."
  6. kandalawncaremgr

    kandalawncaremgr LawnSite Member
    Messages: 224

    I'm sorry I live in the suburbs outside of crook county (cook county) Chicago and they county of cook has a whole different set of rules and rates and taxes that are different from the county I live in. Just to clearify.
  7. kandalawncaremgr

    kandalawncaremgr LawnSite Member
    Messages: 224

    Thanks for taking the time out to forward that link. I really appreciate it.
  8. Darryl G

    Darryl G Inactive
    Messages: 9,500

    No problem :)
  9. JContracting

    JContracting LawnSite Bronze Member
    Messages: 1,878

    You definitely should know whether landscape/lawn services are taxed in your city, county &, state. That way of someone tries to say "a local accountant" you have the upperhand knowledge, which you should have anyway, as you are the contractor and the expert, correct? I had a client for a fall clean up this year try telling me there isnt sales tax on services. I politely corrected him, all lawn services are subject to sales tax in MN. Before I even advertised when I started in 2011 (was 19, now 21) I knew exactly what sales tax percentage was to be charged.

    You need to take an accounting class and/or do some research before you screw yourself with the irs and state revenue dept.

    There is a big difference between sales & use tax and "write off" (income) tax. I'm not going to take the time to explain it.
  10. kandalawncaremgr

    kandalawncaremgr LawnSite Member
    Messages: 224

    Thanks for the response, but I really don't want you to explain tax write offs and such. It was just a simple post to see what others face in there day to day operations. As you are in Minnesota your taxing is a lot different here then in Illinois. And here in Illinois services aren't taxable. Fyi I follow all the rules for licensing, insurance. I'm not some hack ass you probably think I am cause I asked a simple question about taxes.

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