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Water Whisperer
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Discussion Starter #1
Out here, everything is taxable: labor, parts, everything.

The State wants its money every month and takes it very personal if you don't pay up. Within minutes of getting the bank statement, I send the money to the State.

Each week, I automatically transfer x amount from my main bank account to my sales tax bank account, which is different than my income tax bank account which is different than my union bank account...yikes.

Anyway, how is it in your state and how do you handle it?
 

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Banned
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8,808 Posts
No sales tax here. we vote it down each time it comes up for a vote. :)
 

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Former Moderator
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9,817 Posts
Don't pay the taxes - it cuts into your profit margin.

Just kidding.
 

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Master Plumber
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65 Posts
At the T&M shop I'm at now when we purchase at the supply house we pay the sales tax, we are considered the "End User". We collect sales tax of 7% on labor. Unless the job is considered a "Capitol Improvement", then it is tax exempt. If you are repairing a heating system this is also exempt from sales tax because heat is a necessity. Unprepared foods and clothing are also exempt from sales tax here in NJ, using the necessity logic.
 

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We only pay tax on the parts and then of course at the end of the year our state income tax. But if you have employees then it gets really complicated, but everbody knows what a great state CA is when it comes to being fair on taxation w/o representation:no:
 

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Senior Moment
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Anyone familiar with Massachusetts sales tax laws? Or know where I can find them? Should I be charging sales tax on everything? Where do you draw the line, faucet supplies, fittings, flux, solder? I believe in Mass there is no tax on labor, just materials you mark up. But i'm really not sure and don't wanna find out the hard way. I'm a one man shop that does mostly service so I don't sell a lot of material, but I still want to play it safe.
 

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Water Whisperer
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3,627 Posts
Discussion Starter #11
pauli, get that advice from a tax pro. it's a lot less expensive than following bad advice.
Yeah....like a lien on your life. Out here, if you don't pay, they actively pursue you and charge huge penalties. I got one rooter buddy (2 man shop) in for 25k.

Thats the reason our craigslist is clean. The sales tax people chase the unregistered businesses down. Millions of dollars are at stake.
 

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Here in Idaho (Set your watch back 50 years), there are no sales taxes for contractors. It works like this: if you have a store and sell parts over the counter, you charge sales tax. If you contract a job which includes both labor and material, you pay sales taxes on the material when you buy it. You do not charge taxes on the material to the customer. The bottom line is the contract price.

Our county does have personal property taxes. My vehicles are not included, but my hand tools are. However, at "yard sale" prices, my tools are not worth all that much money, so my yearly tax isn't terribly high.
 

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We have to charge sale tax on the total of invoice. We also do pumping service, if we only pump a tank we do not add sales tax. But if we pump a tank and clean a drain or do any plumbing repair we have to add sales tax on everything with the pumping of a tank. That is the way we do it Mississippi. You can find out from your state tax commissioner. Hope I could help. Just some advice if you are doing business and you are not set up for sales tax, get it done on monday because you get fined. I think the state sale tax are worst then the I R S . They will check your books and if they find you did a job and did not send in your sales tax they will fined you and add interest , if you pay late after 3 month they will add interest of 50 percent for late payments
 

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When I first started in business, I wasn't aware of the contractor exemption and set up for charging sales tax. Idiots at the bureau didn't wise me up.

So, for quite a while, I was charging sales tax on the material and not paying it at the supply house. For some reason, it always seemed as if the sales tax on the invoices never added up to as much as it did on the forms . . .
 
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