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Old 12-27-2019, 07:44 AM   #1
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Question Do i write this up with sales tax or not

thanks in advance for your input. I'm not sure if this should be in sales and marketing but I will start here. So when I normally install a electric water heater I do not charge sales tax, it this situation this water heater is part of a solar set up witch works with an indirect unit as well for solar panels . unit I am replacing works as a back up with an element. since it is a repair and part of the system is being replaced I feel this should be tax. I could be wrong . Now if I was replacing the whole system this is a no brainer and tax would not come into play. How do you guys feel about this situation ?
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Old 12-27-2019, 07:58 AM   #2
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Quote:
Originally Posted by czplumbing View Post
thanks in advance for your input. I'm not sure if this should be in sales and marketing but I will start here. So when I normally install a electric water heater I do not charge sales tax, it this situation this water heater is part of a solar set up witch works with an indirect unit as well for solar panels . unit I am replacing works as a back up with an element. since it is a repair and part of the system is being replaced I feel this should be tax. I could be wrong . Now if I was replacing the whole system this is a no brainer and tax would not come into play. How do you guys feel about this situation ?




Given your location I think @ShtRnsdownhill would have the correct answer.


My guess would be charge sales tax and they can deduct it from their taxes when they file?










.
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Old 12-27-2019, 08:14 AM   #3
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It's very hard to understand you. If I understand correctly when you sell materials an a new installation you don't charge taxes?
And if you get called for a repair you charge taxes?


Any materials I install or labor I provide is taxed. Only time I don't charge taxes or labor is on a call back and it's my mistake.
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Old 12-27-2019, 10:15 AM   #4
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It's very hard to understand you. If I understand correctly when you sell materials an a new installation you don't charge taxes?
And if you get called for a repair you charge taxes?


Any materials I install or labor I provide is taxed. Only time I don't charge taxes or labor is on a call back and it's my mistake.

if its considered a capital gain it doesnt get taxed, but you need to fill out a capital gains tax form for each job so if you ever get audited to can show it..its not the easiest thing to keep track of in this crazy state...on the form it explains what can or shouldnt be taxed..
here is a link to the form, best thing I can tell you is read it..
in the case you present I would say no tax...you are replacing the heater with a new one and not repairing it, even though it is a repair tp the solar system, but if you replace a water heater for domestic water it is not considered a repair of the hot water system of the house but a replacement of a component...

https://www.google.com/url?sa=t&rct=...oaQ-DxzmzVcO5i
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Old 12-27-2019, 10:21 AM   #5
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Need help?Telephone assistanceSales Tax Information Center:(518) 485-2889To order forms and publications:(518) 457-5431Text Telephone (TTY) Hotline (for persons with hearing and speech disabilities using a TTY):(518) 485-5082accessible to persons with disabilities. If you have questions about special accommodations for persons with disabilities, call the information center.Persons with disabilities: In compliance with the Americans with Disabilities Act, we will ensure that our lobbies, offices, meeting rooms, and other facilities areVisit our website at www.tax.ny.govget information and manage your taxes onlinecheck for new online services and featuresPage 2 of 2ST-124 (12/15)





InstructionsWhen the customer completes this certificate and gives it to the contractor, who accepts it in good faith, it is evidence that the work to be performed will result in a capital improvement to real property.A capital improvement to real property is an addition or alteration to real property that


:(a) substantially adds to the value of the real property or appreciably prolongs the useful life of the real property,



and(b) becomes part of the real property or is permanently affixed to the real property so that removal would cause material damage to the property or article itself,

and(c) is intended to become a permanent installation.



The work performed by the contractor must meet all three of these requirements to be considered a capital improvement. This certificate may not be issued unless the work qualifies as a capital improvement. See Tax Bulletin Capital Improvements(TB-ST-104).
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Old 12-27-2019, 10:23 AM   #6
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the biggest thing that will get you in trouble is collecting sales tax and not forwarding it to the state, more than not collecting it when you should...
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Old 12-28-2019, 07:18 AM   #7
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so I think the question I am asking is would you guys consider this a repair or capital improvement. and Yes all repairs I am required to charge sales tax here in NY state. Yes I pay the government, and for any new work here in NY new house our a full bathroom renovations complete water heater replacement or complete boiler replacement they consider this a capital improvement and no sales tax is collected. But when you are just replacing part of a complete system its considered a repair . this is where I am a little confused here , again there are multiple components that make up this system , so I am assuming this is a repair?
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Old 12-28-2019, 11:34 AM   #8
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Quote:
Originally Posted by czplumbing View Post
so I think the question I am asking is would you guys consider this a repair or capital improvement. and Yes all repairs I am required to charge sales tax here in NY state. Yes I pay the government, and for any new work here in NY new house our a full bathroom renovations complete water heater replacement or complete boiler replacement they consider this a capital improvement and no sales tax is collected. But when you are just replacing part of a complete system its considered a repair . this is where I am a little confused here , again there are multiple components that make up this system , so I am assuming this is a repair?



you are NOT repairing the water heater you are REPLACING it..so NO repair.....you are reading into it tooo much..if you replaced a part on the water heater its a repair, but you are not doing that, you are replacing the unit....hence no repair...


if you look at it this way...the house or building is a system..so if you replace anything in the system its a repair..( using your line of thought)
a house is part of a neighborhood system, so is building a new house just repairing the neighborhood??? no..some common sense needs to come into play and be logical on whats considered a "system"...
the water heater is a self contained unit and in itself is a system to heat water..period..so repairing the water heater is taxable..replacing it is not taxable..


if all else fails call..Need help?Telephone assistanceSales Tax Information Center:(518) 485-2889
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Old 12-28-2019, 07:17 PM   #9
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Quote:
Originally Posted by ShtRnsdownhill View Post
you are NOT repairing the water heater you are REPLACING it..so NO repair.....you are reading into it tooo much..if you replaced a part on the water heater its a repair, but you are not doing that, you are replacing the unit....hence no repair...


if you look at it this way...the house or building is a system..so if you replace anything in the system its a repair..( using your line of thought)
a house is part of a neighborhood system, so is building a new house just repairing the neighborhood??? no..some common sense needs to come into play and be logical on whats considered a "system"...
the water heater is a self contained unit and in itself is a system to heat water..period..so repairing the water heater is taxable..replacing it is not taxable..


if all else fails call..Need help?Telephone assistanceSales Tax Information Center:(518) 485-2889

Ok that clears it up ! thanks . I've always said id rather just be in the filed than doing this paperwork stuff.....
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Old 12-30-2019, 04:53 PM   #10
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Does New York State have an option for a resale permit?
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