HOW MANY COLLECT SALES TAX

DO YOU COLLECT SALES TAX? OR DO YOU LIST AS CONTRACT LABOR,IVE HEARD CONFLICTING STATMENT ON THIS.???

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Sales tax is collected for products delivered. For instance you have to pay sales tax on any stains or soaps that you might purchase locally. In most states we are classified as a service, so that no sales tax is applicable.
Employee taxes are a different animal. If you have employees you have to take taxes out of their checks and get it to the feds. Some people say that they have their employees as contract labor, but unless tehy are using their own equipment, truck, pressure washer, soap etc. they really don't qualify as contract labor.
In reality, you might want to check with an accountant on what is the proper thing for you to do.


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I own a powerwashing service in southeast Iowa. I wash cars for three different dealers here. When I went to start my business I went to my local state run tax office. I explained my business and asked what taxes my business would be liable for. They indicated everything but sales tax. Why? They said that after I applied a sealant(Wax) it became part of the car and the dealer collected the tax when he sold the car. I also had my accountant inquire about sales tax and was given the same info. Well here it is five years later and the State just contacted me saying that I should have been paying a Sales Tax the whole time. Were talking about $12,000.00 that I never collected. I have been fighting this for the last several months and just recently got the state to abate all the tax, penalty and interest up to the 3rd Qtr. of 2000. The state indicated that they realized that they had provided erronous info. I have since had to apply for a sales tax permit. The state says I am a service business so I must collect sales tax. So if you are a powerwashing contractor in the state of Iowa you must collect sales tax.A WORD OF CAUTION TO ALL CONTRACTORS!!!! The state of Iowa also informed me that they and many other states are now linked up with the federal goverment and they are actively pursuing business that should be paying sales tax but are not. I hope this answered your question.
Tony ell
Quik Clean
1919 S. Main
Burlington, Iowa

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Hey guys and gals,

Your accountant can furnish that info for you; if not...STOP PAYING HIM!!!!!!!!
I deal with a construction company that does almost all of the school retorations in Pittsburgh. My first bid to him ever, he said he was not liable to pay state sales tax to me.I got my accountant to fax me the PA state tax laws. Then I gave them to this guy.
He felt a little poopy for his misunderstanding.
I did get four schools for restoration last year and have contracts for two for the spring this year because he considered me a "legit company".
Now I just include tax in the bid and back it out in my sales ledger come tax time.
Another hint that works for me is not to list all of the breakdown of chemicals, rentals, materials or labor for the job. If they do ask for it, I can provide it.
Just my thoughts.

J MAN

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I live in New York and I am convinced that this is the "TAX CAPITOL" of the United States.Everything is taxed up here unless you qualify for a tax exempt status IE:churches,government etc.
I also have an exempt status but this only pertains to the purchase of material for resale.I don't pay the sales tax on the material when I buy it but the sales tax is included when I bill the customer.In this state "the ultimate consumer" pays the tax.
When I receive payment for work done I must set aside the tax portion and submit that tax portion to the state treasury on a quarterly basis.
The best bet is ask the state tax department what your obligations are.They have pamphlets available informing you what is and what isn't taxable.
Best of luck to you.
RICK T.

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I just contacted the Illinois Department of Revenue to confirm.

We never have charged sales tax (been in bsiness since '84). In Illinois for a service, if the charge for the goods used to perform the service does not exceed 35% of the total invoice, then no sales tax is required to be charged!

We do pay sales taxes on all purchases that we make for supplys, etc.

Dave Olson

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Tidy Powerwash Service, Inc. P.O. Box 781, Catlin, Illinois 61817 Phone 217-427-5557, Fax 217-427-2632 We are a commercial cleaning contractor serving East-Central Illinois and West Central Indiana since 1984. http://www.tps-inc.com/preswash.htm

Jim & Shirley,

Interesting post. I don't know the laws in TN but I can only really suggest that you check with your accountant. Here in PA depending on the type of services you perform may or may not need to be sales taxed. It is very confusing and not really totally defined. A real pain in the $@%&...if you ask me!



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Rick - Deck Care Plus

[This message has been edited by rvagnoni (edited January 11, 2001).]

Ok, here in Texas, when i got my sales permit, i was told by the State Of Texas Comptrollers Office that i needed to collect sales tax for all services. Just like an exterminator, a lawn service, ect. I said okie-dokie. So i did. About a year and a half later, another contractor said, "why are you charging sales tax?" I said, "you dope, we have to, just like an exterminator, a lawn service, ect." But i got to thinking about it and called the Texas Comptrollers Office back and asked more questions. They said, you guessed it, " you have to charge sales tax on all services, just like and exterminator, a lawn service, ect." So i continued to charge.

Now ya'll bring this back up, and so once again, i call the Texas State Comptrollers Office, and they said, "only charge sales tax on commercial jobs, not residential" What tha?????

I got his name, noted time called, and all that jazz. Called back one hour later, and asked if commercial is the only services i am required to collect sales tax, and they said yes.

So thats what i am gonna do. I guess.

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Craig Knight
www.powerwashunlimited.com

Tony,

Thanks for your insight, and welcome to our little world (powerwash.net).

Thanks for posting,


Craig

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Craig Knight
www.powerwashunlimited.com

Here in Washington State you are required to charge sales tax for services. Unless of course the company is exempt from the retail sales tax. I still charge sales tax to tax exempt companys until they provide me with a Exemption Certificate because I am responsible to provide proof if I am not charging sales tax.

Hey Rick, I'll bet Washington would give NY a run for it's money (or maybe that's our money) on the title of TAX CAPITAL USA If there is not a tax for it there will surely be a permit!

Rob Blair

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Hey fellow PW r's,

In Ky there is no sales tax on any services, only sales tax on products. However if we apply the product it is considered a service so no tax.

Greg

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We had already gone to the sales Tax Office here and told this was a service,so we dont have to pay Sales Tax,Unless we were selling somthing, like chemicals or supplys Ect!!! that the way its here in Memphis and was only Curious how it was Else-where, thanks everybody for your input.

JIM & SHIRLEY

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In NY just about everything is taxed. You must collect 8.25% on all sales which includes services. NY is the KING of taxes. School taxes alone where I live is close to $4000 a year. That combine with my house taxes puts me close to $6000 a year and that is not that expensive in this neck of the woods. I think we now don't have to pay taxes on clothes that we buy but everything else is nuts.

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