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sales tax #156152
03/30/05 08:27 AM
03/30/05 08:27 AM
B
BobH  Offline OP
Member
Joined: Oct 2004
Posts: 135
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?

Business, Office, Estimating, Legal:
Re: sales tax #156153
03/31/05 11:55 AM
03/31/05 11:55 AM
B
BobH  Offline OP
Member
Joined: Oct 2004
Posts: 135
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.

Re: sales tax #156154
03/31/05 04:24 PM
03/31/05 04:24 PM
Alan Belson  Offline
Member
Joined: Mar 2005
Posts: 1,803
Mayenne N. France
shhh! IRS!


Wood work but can't!
Re: sales tax #156155
03/31/05 06:26 PM
03/31/05 06:26 PM
D
Dnkldorf  Offline
Member
Joined: Dec 2004
Posts: 1,064
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.

Re: sales tax #156156
03/31/05 08:42 PM
03/31/05 08:42 PM
C
cavo148  Offline
Member
Joined: Jan 2004
Posts: 79
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

Re: sales tax #156157
03/31/05 08:44 PM
03/31/05 08:44 PM
B
BobH  Offline OP
Member
Joined: Oct 2004
Posts: 135
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.

Re: sales tax #156158
03/31/05 09:28 PM
03/31/05 09:28 PM
Bill Addiss  Offline
Member
Joined: Oct 2000
Posts: 3,890
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

Re: sales tax #156159
03/31/05 10:18 PM
03/31/05 10:18 PM
B
BobH  Offline OP
Member
Joined: Oct 2004
Posts: 135
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?

Re: sales tax #156160
03/31/05 11:02 PM
03/31/05 11:02 PM
Bill Addiss  Offline
Member
Joined: Oct 2000
Posts: 3,890
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

Re: sales tax #156161
04/01/05 11:07 AM
04/01/05 11:07 AM
B
BobH  Offline OP
Member
Joined: Oct 2004
Posts: 135
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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