Sales Tax

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Detective Coating
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Sales Tax

Post by Detective Coating » Sun Nov 17, 2013 10:36 pm

Only really interested to here from people that operate a LEGAL business on this but any input may be helpful. Just seeing who charges sales tax and who doesn't. How did you determine if you need to or not? I have been because they did at the shop I worked at in PA did. But why? I've always learned in all business/accounting classes that services are not taxed but there are some exceptions to that. I tried to do some searching online but cannot find anything conclusive.
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TT350
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Re: Sales Tax

Post by TT350 » Sun Nov 17, 2013 11:47 pm

In the state on MS if you provide goods and or services to anyone or any business that does not have a state sales tax number you charge them state sales tax. If they have a state tax number and you do not charge them sales tax then you need to have there tax # on file so your CPA can recode there tax # on your return.

Detective Coating
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Re: Sales Tax

Post by Detective Coating » Mon Nov 18, 2013 12:25 am

I guess I'm just confused as always being taught services are not taxed, only end consumer goods are. But now it seems like all services are. When did the change happen? Why did it happen? What did I miss along the lines? Haha.
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SCOTTRODS
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Re: Sales Tax

Post by SCOTTRODS » Mon Nov 18, 2013 7:27 am

In Texas, Labor is Taxed if it's not a Factory refurb/replace item, such as Aftermarket Radio installation. If I were installing a replacement radio due to Damage or theft, The labor would not be taxable. This is a Guide I go by for all other taxable items as well. Having worked at and around Dealerships for many years, this has always held true as well. Put on aftermarket wheels, TAX. Repace a bent one with a factory part, No tax. (Specifically labor related to me).
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duke46
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Re: Sales Tax

Post by duke46 » Mon Nov 18, 2013 7:53 am

We would all under the same tax as a paint and body shop. Try to find out what you can on that type of business in your State. If you find someone that just got their car painted and could look at the bill might help but if they didn't tax it all then you might have trouble figuring out what was taxed and what was not.

Your tape and powder and anything else you had to use would be taxed. Now remember you have to also set up paying your state taxes by the quarter and that is done if I remember correct at a guess of what your amount of tax would be and then you adjust it.

The tax office in your area might even have have a list that you can go by. Someone may be able to tell you and then if they don't have any idea that will not help much. They would not know about powder coating but should know about paint and body.
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duke46
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Re: Sales Tax

Post by duke46 » Mon Nov 18, 2013 8:06 am

Now if you could find something like this for VA you would know. They should have a guide like this.

http://www.boe.ca.gov/pdf/pub25.pdf" onclick="window.open(this.href);return false;


Don't forget you also have to set up your taxes for state and fed self employment tax based on an estimate and it gets paid by the quarter.
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Detective Coating
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Sales Tax

Post by Detective Coating » Mon Nov 18, 2013 9:07 am

duke46 wrote:Now if you could find something like this for VA you would know. They should have a guide like this.

http://www.boe.ca.gov/pdf/pub25.pdf" onclick="window.open(this.href);return false;


Don't forget you also have to set up your taxes for state and fed self employment tax based on an estimate and it gets paid by the quarter.
I don't, I'm set up as an LLC with an S-corp election so I have no self employment tax (for now) thanks to a loophole that hasn't been closed.

I'll do some more searching on it but it makes a little more sense now with how Scott worded it. I know my electrician charged me sales tax.
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Jay V
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Re: Sales Tax

Post by Jay V » Mon Nov 18, 2013 9:09 am

I'm always charging tax on the bottom line unless I'm working with a shop that will "resell" my work to a customer. If that's the case they need to provide a tax certificate and they are responsible for taxing it when they bill the customer.


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kenny45
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Re: Sales Tax

Post by kenny45 » Mon Nov 18, 2013 9:56 am

In Virginia labor is not taxable. The only thing that you charge sales tax on is materials if you are billing it separate on your invoices.

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Re: Sales Tax

Post by DustysPC » Mon Nov 18, 2013 1:41 pm

I'm a sole propriator LLC, just means I have to do everything, and I charge sales tax unless they have a number. My self employment tax is figured in with my income taxes at end of year. I just use Turbo Tax Business and Home Edition. Covers my Social Security, and all the other deductions you have to pay. I charge sales tax and pay it to the state quarterly. Some customers cry about the tax, but that's just the way it is.

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