I'm totally confused... and my past experience as a convenience store owner isn't helping... hmmmm...
According to my partner and the Supplier manager and a tax rep:
We pay taxes period. No one is tax exempt except labor on capital improvement work. If we do work for the gov't, etc. we are to pay the sales tax when we buy and then somehow hide it in the price so that the sales tax line reads "0".
OK... then what are tax exempt accounts for?
For Service Call work where you pay sales tax on both labor and materials so you pay what is totalled tax on invoice to the gov't.
Here's what I had thought:
Taxed accounts are for: if you don't have a mark-up and you only do capital improvement work...
Tax exempt accounts are for: You add a mark-up (just like a conveniecne store) and you owe 6% when sold to the customer (not when you buy... it is for resale) and you add 6% on labor if it is a service call but not if it is a capital improvement. If you do work for a tax exempt entity, no fuss no muss, no tax is owed or paid...
But apparently I am wrong.
Tom, jps, other WV contractors... HELP!!!
[This message has been edited by sparky66wv (edited 08-13-2005).]