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What would you do?

Discussion in 'Heavy Equipment & Pavement' started by YellowDogSVC, Jul 21, 2008.

  1. YellowDogSVC

    YellowDogSVC LawnSite Gold Member
    from TX
    Messages: 3,793

    Okay, here's an ethical question of sorts.

    You know you are being undercut by cash only guys and fly-by-nighters for tree services (removals and grinding stumps in particular).

    In Texas, where I work, tree services other than land clearing are taxable. That includes stump grinding and tree removals (trimming too), unless it is part of first time clean up for new construction.
    If you know your competitors are not set up to collect sales tax but you are and you have to do the paperwork, collection, and remittance, do you report the other company when you see them doing taxable services?
    I haven't reported anyone yet but I don't like the idea of an uneven playing field. Sales tax is a Pain in the Rear! Some things are and some things aren't taxable and it's up to the contractor to figure it out and charge accordingly. I have had customers complain and argue after a job when I add tax. "so and so" didn't charge tax...
    "but it's the law, ma'am"...

    Anyway, what would you do? I also see a lot of guys running farm tags on equipment trailers with business signs on their doors. That means they probably bought the machine tax-free and their trailer tags are only $5 a year compared to my $130+ for mine.

    Seems to me that everyone should follow the rules or else some of us are carrying an unfair burden. If you don't like taxes, tough. I don't either but the law is the law.
  2. Junior M

    Junior M LawnSite Fanatic
    Messages: 13,595

    just remember they will get what coming to them.
  3. 74inchShovel

    74inchShovel LawnSite Member
    Messages: 108

    I know exactly what you are saying. But the playing field never has been, and never will be level. The customers that surf around and look for the best cash deal are not the customers I really want to do business with. If you are being undercut by people breaking the law, chances are real good that they have no License, bond or insurance. I grind stumps too, and when I give a bid, I stress how dangerous it can be to grind stumps and let them know that I am insured to the hilt. I point out to them that if a rock gets loose and takes out someones eye, and the contractor has no insurance they are on the line for getting sued. Carry proof of your insurance to show them. Maybe this will help.
  4. gene gls

    gene gls LawnSite Gold Member
    Messages: 3,213

    I sub out my fert work and know that they report anyone they find with out the proper papers.
  5. YellowDogSVC

    YellowDogSVC LawnSite Gold Member
    from TX
    Messages: 3,793

    Down in Texas stump grinding can mean anything from axes and exchange students with shovels to pulling them out with a Chevy. It's all taxable under landscaping/tree services. It shouldn't be, but is for some reason. Land clearing, however, isn't as long as it is for a new home, ranch or farm clearing. If anyone understands the TX sales tax better than I, chime in. That's my understanding after 11 years of talking to the folks.

    I know for a fact that a number of competitors don't carry insurance. Heck, I know some who haul a backhoe without a CDL. Accident just waiting to happen. Gets frustrating when times get tight but like you said, those cheapskate customers aren't what I am looking for anyway. I try and stress that on my website and again when I make contact on the phone or email. Some people flat out lie about wanting only quality work, etc., and then you find out they went with a lowballer at half the cost and the job looks terrible.
    You know those guys aren't taxing or carrying insurance. You can't afford to and undercut. Rental equipment is too expensive and owning equipment is too expensive. They have to cut somewhere and it's probably on the insurance. I knew a guy hauling a JD 450 dozer with an OLD C (whatever) flatbed medium duty truck and trailer. He did not have a CDL or insurance other than general liability for his pickup. Nothing on the "rig" or dozer trailer. He hauled that thing all over the place but did it at night or on Sundays. I witnessed the highway patrol drive right on by him. Keep in mind the dozer was "strapped" down with 2 1/2" yellow straps! Heck, if I did that they'd call swat but this guy was under the radar. He eventually went out of business because his machine was broke for 6 months. He was a heck of a nice guy but took a lot of chances and was just plain irresponsible for carrying insurance.

    Ok, now that I'm totally off subject.. :)
  6. mastercraft

    mastercraft LawnSite Member
    Messages: 38

    I know exactly what you are saying about the hassles of the sales tax. I owned a body shop for 10 years, and it ended up being my biggest hassle. It took me 2 years after closing to pay it all off. In Ohio at least, it is a joke. After the return was delinquent for a year, they would send you a certified letter demanding the return. One day when signing for it, and feeling humiliated, the mail lady commented that she hated this day of the month and showed me a bag full of those certified letters. I finally came to the conclusion that the state just did'nt have the manpower, or it was just not cost effective to go after the small guy. I guess what I'm saying is that even if you turned someone in, the probability of them even ever getting contacted by the state is very slim, let alone ever paying it. As some others have said, those customers probably are'nt the ones you really want anyway.
  7. Kepple Services

    Kepple Services LawnSite Senior Member
    Messages: 374

    Turn them in, I have done it on a few. They will always get theirs and the issue is who will they take down with them when it happens? Case in point locally here we just had a tree service lay a crane across an old couples house. Been in buisness 30 years. They hauled arse when it happened. Why, you guessed it, no insurance. Now not only are they completely out of buisness, but the old couple is out of luck because their insurance has to pick up the tab on fixing the house.
  8. Summit L & D

    Summit L & D LawnSite Senior Member
    Messages: 269

    Turn 'Em in. We are working right here in the area with you, and it is very frustrating getting low balled by these outfits. My hope is that the downturn in the economy will take these guys out of the market, and give the legit guys the respect in the marketplace we deserve.
  9. Scag48

    Scag48 LawnSite Fanatic
    Messages: 6,067

    My old man is fighting somewhat the same issue landscaping. A lot of guys are unlicensed, uninsured, sure as hell aren't charging sales tax and doing things by the book. One of the biggest offenders in town finally got slapped when he installed a pool illegally without a permit, was forced take it out at the homeowner's expense because duh, the guy they hired to do the landscaping doesn't have insurance to cover the fault. He also tried to wire some of the electrical to the pool himself and got slapped for that too, I"m sure that was a hefty fine. Hoping that he gets caught another couple times and it'll put him out of business. Before long, someone will catch up with them. My old man has been in business for 5 years and never has had an L&I inspector show up on site. He was working way out of town on a job and an L&I guy rolled up, clearly saw everything was legit, and was on his way. Told my dad that he was running around trying to catch anyone not in compliance. About damn time they start cleaning up around here, it's starting to get ridiculous. My dad has turned a blind eye to a lot of these guys in the past, I think he's going to start turning them in. When the market is the way it is, the last thing we need is guys working for peanuts. It's already tough enough, especially with the rising fuel costs, to make a go at this business. It's just frustrating when you go out to bid a job and you are told the last guy was less than half the price on a $20K job.
  10. Junior M

    Junior M LawnSite Fanatic
    Messages: 13,595

    my dad and i bid a five and a half foot tall retaining wall and it was with equipment a 12400 dollar job and we had beat every other guy by a few hundred dollars. and this guy overheard the homeowners talkn about the wall and he told them he could do it for 4000 dollars. we had 5400 dollars in just block.

    well the homeowner was having a pool put in by our contractor and he had this guy come out and show him where it was needed and where the top of the wall needed to come out to get so much concrete. and the contractor asked him what he was goin to do for a footer and the guy said what a footer? you dont need a footer i will just level a place in the dirt. well then the contractor said ok well what about some drainage? the guy said ahh you dont need drainage either there wont be that much water hitting the back side of this wall it will be ok. now there is like ten feet of fall in about 50 or 60 feet. and there wouldnt be that much water.

    and that is the crap you get here in sc because you dont have to have a license or a permit when the homeowner does it his or herself so that is what most people do is have the homeowner buy everything and get it delivered and have all the paperwork and crap in the homeowners name so technically no one knows that this person did it. but you should still do everything legit if you are goin to do it and do it right. now me and my dad are not totally legit but we are technically a division of the pool company we work for so we use his licence and permits becuz most the work we do are on his jobs.

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