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#156152 - 03/30/05 05:27 AM sales tax
BobH Offline
Member

Registered: 10/16/04
Posts: 134
Loc: Newfane, N.Y USA
Here in N.Y we are required to collect sales tax for all service work except for capital improvements (form required). I'm just curious if it is the same way for all states, do all you guys collect sales tax on every service call or non-capital improvement type work? What about commercial and industrial service calls?

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Business, Office, Estimating, Legal:
#156153 - 03/31/05 08:55 AM Re: sales tax
BobH Offline
Member

Registered: 10/16/04
Posts: 134
Loc: Newfane, N.Y USA
Ok... I guess this is really a dead site or the question was considered soo stupid nobody will dignify it with a response.

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#156154 - 03/31/05 01:24 PM Re: sales tax
Alan Belson Offline
Member

Registered: 03/23/05
Posts: 1801
Loc: Mayenne N. France
shhh! IRS!
_________________________
Wood work but can't!

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#156155 - 03/31/05 03:26 PM Re: sales tax
Dnkldorf Offline
Member

Registered: 12/12/04
Posts: 1091
Loc: nowhere usa
PA, I am only required to collect sales tax on "repairs".
Does not apply to new installations.

Install a ballast. Not repair light.

Nuf said.

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#156156 - 03/31/05 05:42 PM Re: sales tax
cavo148 Offline
Member

Registered: 01/19/04
Posts: 79
Loc: New Jersey
Here in NJ it's pretty much the same. Repairs and maintenance are taxable and capital improvements are not. Yes, we have a form called "ST-8" which the customer is suppose to sign, but most panic and have to call their accountant before signing it. We, as contractors, have to pay sales tax on materials in NJ. If we itemize our repair bill we only have to tax the customer for the labor....technically speaking that is.
Andy

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#156157 - 03/31/05 05:44 PM Re: sales tax
BobH Offline
Member

Registered: 10/16/04
Posts: 134
Loc: Newfane, N.Y USA
Hey, there is somebody out there! I didn't think about that IRS thing, just dense I guess. Was really only curious about actual tax laws related to different states and service type work. So it seems to me that in most cases, the material is already taxed when I buy it from supply house so I just tax the labor. I guess I'm still a little confused and wonder if I'm doing it wrong, accountant is not much help and always in a hurry so I guess I need to educate myself.

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#156158 - 03/31/05 06:28 PM Re: sales tax
Bill Addiss Offline
Member

Registered: 10/07/00
Posts: 4196
Loc: NY, USA
BobH,

I'm from NY too. You have to apply tax to the whole bill for non-Capital Improvement related services and then claim credit for Tax already paid on materials when you file your NYS Sales Tax returns

Bill

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#156159 - 03/31/05 07:18 PM Re: sales tax
BobH Offline
Member

Registered: 10/16/04
Posts: 134
Loc: Newfane, N.Y USA
Bill,
Ok, so you would have to claim credit and basically you would be keeping the tax you collected from the customer because the tax for the materials was already paid by contractor. So this would be done quarterly?

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#156160 - 03/31/05 08:02 PM Re: sales tax
Bill Addiss Offline
Member

Registered: 10/07/00
Posts: 4196
Loc: NY, USA
BobH,

BTW, whether you did it quarterly or not depends on the amount of taxable sales you have. If you're below a certain level you could do it only once a year.

Here's my understanding of how it works; (I'm using round numbers that are easy to deal with)

You buy $100.00 worth of materials and pay $8.75 in sales tax to the supply house. You do a job and mark up the materials to $150.00 and have $250.00 in labor costs.

$150.00 + $250.00 = $400.00 job cost
Sales tax (8.75%) = $35.00
$400.00 + $35.00 = $435.00 you collect from Customer.

When you file the NYS Sales Tax form you report the $400.00 as a Taxable sale which gets multiplied by the tax rate (8.75%) and comes up with $35.00 that you tentatively owe to NYS in sales tax. You then put the $8.75 that you paid the supplier as a credit (for sales tax already paid) on the form and it gets subtracted from the $35.00. BTW, you have to attach a separate note explaining that the credit in Box #?? is for sales tax already paid on materials used in taxable sales.

So, $35.00 - $8.75 = $26.25 owed to NYS. You get a small credit for performing the sales tax collection service, so the amount you send them would be slightly less.

Bill

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#156161 - 04/01/05 08:07 AM Re: sales tax
BobH Offline
Member

Registered: 10/16/04
Posts: 134
Loc: Newfane, N.Y USA
THANKS Bill, you explained that process better than 2 accountants I have already talked to and trying to get definitive answers from NYS proved to be almost futile.

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