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Taxes

Discussion in 'In the Office' started by KMSEXC, Mar 28, 2008.

  1. KMSEXC

    KMSEXC Well-Known Member

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    ct
    This is question for company owners , In Excavating how do you charge your customers taxes, do add it on the end of the bill , sounds stupid I know But need the help, Thanks KMS
     
  2. JDecker

    JDecker Well-Known Member

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    Location:
    NY
    when we buy material we always pay the tax inless it's a tax exempt job. and just charge the custmor for the material and mark material up when you can. Alot less paper work. You don't need to charge tax when you are working with your equipment because it's a service. Hope that help:usas
     
  3. tuney443

    tuney443 Senior Member

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    Occupation:
    excavating contractor
    Location:
    Dutchess County,NY
    Many excavators,masons,plumbers,etc. don't get sales tax. If it's a repair,it most definitely is taxable,a product such as fill,topsoil is taxable.If the job is for new construction{I'm going here by NY laws},if the client fills out a capital improvement form,it will then be tax-exempt.The onus is on the client if the form was completed correctly if you should get audited.Other tax-exempt forms I use are resale certificates and school,religious,not-for-profit,gov't exempt type forms.Sales tax always gets calculated at the end of the bill,just like any other bill.
     
  4. tuney443

    tuney443 Senior Member

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    You're completely wrong---any service is taxable---it's only not if the service you are doing meets ALL the criteria on the Capital Improvement form or some other tax-exempt form because basically you are doing new construction of some sort.Try telling a sales tax agent in Albany that services aren't taxable---he will ask for directions to your office faster than you can say Oh S***!!!
     
  5. JDecker

    JDecker Well-Known Member

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    Sorry i guess i should have said that a little different you are absolutely right you do need to have a capital improvement form in order not to charge sale tax. Which like you said most off the time you are doing new consruction i should not have said service.:pointhead
     
  6. KMSEXC

    KMSEXC Well-Known Member

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    Thanks

    Thank you fellows i Aways get good advice here Thanks Again KMSEXC
     
  7. KMSEXC

    KMSEXC Well-Known Member

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    So new home construction is not taxable and and existing homeowner work is taxable, what do you charge tax on the final cost of job So a Builder calls me and says I need a cellar dug for a new home I know i don't charge tax on that project just pay IRS on profit , A Home owner calls says they need a waterline installed or septic system I quote them a price and Then add Tax On it Does that sounds Right
     
    Last edited: Mar 29, 2008
  8. JDOFMEMI

    JDOFMEMI Senior Member

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    Reember, Each state has its own tax laws. Just because its that way in NY, where the answers are from, does not mean the same applies in CT, where you seem to be.

    Just a heads up. I would do some more research. If you are doing taxable work, I think it should go right on the invoice.
     
  9. Willis Bushogin

    Willis Bushogin Senior Member

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    Occupation:
    owner
    Location:
    NC
    I think I understand your question, as a owner, if I showed I added taxes, on work performed and tax on supplies, I would lose about half of my customers. They dont like to pay tax on anything (who does) so I just show everthing as a total
    excavator work-$2800.00
    dozer work- $1200.00
    supplies- $856.97

    Im not saying, dont charge taxes, just dont show it. In my state you dont have to charge taxes on machine work.
    Just my 2 cents worth
     
  10. cat320

    cat320 Charter Member

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    Doese every one normaly charge tax on labor? I mean if you buy pipe stone building supplies and mark them up then your charge tax on them .home owner,builder buys them but you install no taxes.
     
  11. Steve Frazier

    Steve Frazier Founder Staff Member

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    One thing everyone needs to do here is get their terminology correct. You, the contractor do not charge sales tax, the State does. You are simply acting as a collections agent for the State as required by law. State laws vary, so not all answers seen here will apply to everyone.

    cat320, in NY the answer to your question if I'm understanding it is yes, you must collect tax on labor unless the job is a capital improvement.
     
  12. ASPHALT04

    ASPHALT04 Well-Known Member

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    Occupation:
    Owner / Doing whatever it takes to pay the bills!
    Location:
    Wisconsin
    I agree with Steve on thid one because I have lived in a few different states. What works in one state will not work in another. Here where I live certain items are taxable while others are not.
    As painful or boring as it might be it would definately be worth the time to sit down a learn the basics. It will possibily save you down the road from a mess!:Banghead
     
  13. KMSEXC

    KMSEXC Well-Known Member

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    well Im glad I asked this question, I think this will help a lot of us, keepem coming still not clear on this topic KMSEXC
     
  14. KMSEXC

    KMSEXC Well-Known Member

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    I agree

    Thats Part of it, I like your Idea But If you don't charge taxes on machine work how do you pay your taxes, out of your profit, Man its tough enough out there with the cost of equipment fuel labor materials, I think we have to charge tax on our job profits if you don't charge for it you lose money Thanks for reply
     
  15. tuney443

    tuney443 Senior Member

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    Very good response Steve and just a little extra now,very surprisingly NY has just raised the amount us ''vendors'' are allowed under the ''vendor collection credit''. As an example,2 weeks ago when I filed the Dec.'07--Feb.'08 sales tax quarter,I helped make NY about $1,800 richer,to which I was able to keep app.$80 for my 2 hours worth of work.Not to shabby for a gov't. worker huh?:D
     
  16. KMSEXC

    KMSEXC Well-Known Member

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    I Here You on that one

    You right a big mess
     
  17. tuney443

    tuney443 Senior Member

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    So again,basically a repair is taxable,but new construction is not,BUT ONLY if you have a properly filled out Capital Improvement form.That basement for the builder or the water/septic for Joe Homeowner needs that cert. if you don't want to charge them tax.Again now,I'm in NY--I'm reciting NY law--yours might be different.Just remember,a builder does not enjoy any special privileges--if he doesn't want to pay sales tax he needs to prove to the state why he is exempt.Your job as the vendor is to make sure that happens--you are acting as an agent for the state.Also remember,the state will most definitely take your money if you should erroneously charge someone sales tax--they will NOT point out to you that you did not have to charge that client the tax.
     
  18. KMSEXC

    KMSEXC Well-Known Member

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    Location:
    ct
    ya i will have to check into my state rules , So if the builder hands me an exempt form, I get paid from him Theres no taxes relayed to irs
     
  19. KMSEXC

    KMSEXC Well-Known Member

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    ct
    Taxe

    Im not crazy about it, but I just have visit the IRS and get a lesson on charging tax and paying tax
     
    Last edited: Mar 30, 2008
  20. Steve Frazier

    Steve Frazier Founder Staff Member

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    IRS has nothing to do with sales tax, your State Tax Commission is the place to ask questions about that. The IRS only deals with income tax.