1. Welcome to PlowSite. Notice a fresh look and new features? It’s now easier to share photos and videos, find popular topics fast, and enjoy expanded user profiles. If you have any questions, click HELP at the top or bottom of any page, or send an email to help@plowsite.com. We welcome your feedback.

    Dismiss Notice

Sale tax audit ??

Discussion in 'Business Fundamentals' started by zackman, Sep 20, 2011.

  1. zackman

    zackman Member
    Messages: 43

    I wanted to ask how you bill out and receive sale tax for plowing services, and for purchasing material..

    " Let me tell you what I am going through."

    When I bought supplies/ salt/ sand I did not pay sale tax I then did the job and billed it out for sales tax for the whole bill including my labor. I have done that for some years now since I started my own business. I have worked in the industry for someone for many years, and decided to do it for myself I went by the book for everything ( or I thought)

    Everything we needed to do to start a business we did. Sale/use tax number business entity tax etc... I have paid so much to start this business I can't believe they want more!!

    I am now going through a sales tax audit and feel like I am being told so many different things.

    All I know is that I tried to do EVERYTHING the right way and now I am being told it all was wrong. I feel like having a business is just not worth it.. I have been going through this audit for almost a year now. I am so stressed about it. I just want it to end and then maybe throw in the towel because this is just ******** right now..

    Has anyone else been through something like this ?? Any info would be helpful as I am pulling my hair out right now..
     
  2. Kwing1120

    Kwing1120 Member
    Messages: 39

    I am not sure what State your in but from what i understand in MA where i have worked and i have lived you only pay/charge sales tax on goods not services. this is my understanding. i will let the pros chime in here for the rest.
     
  3. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    You live in NY.! NY is going to audit every business in the state over the next couple of years. What part are they trying to get you on?
     
  4. Super Mech

    Super Mech Member
    Messages: 51

    Rat bastards got me good this past year! Nearly wanted to commit suicide, but we got through it-had to pay but what are you going to do.
     
  5. Brian Young

    Brian Young PlowSite Veteran
    Messages: 3,382

    EVERY FRIGGEN DAY I wonder why we do what we do! You either have to roll with the punches or get out. Life would be sooooo much easier if we worked for someone else but now can't afford to. We went through an audit last year and my Wife who owns and does all the "business" end of things was stressing out for 2 weeks. The lady came over, went through everything and said there were a few things that needed work on but 98% of it was done. It sounds like you've done just about everything you can so I wouldn't be that worried about it. If it gets that bad fold up and start from scratch if there's no other option. BTW, why has this been going on for a year? We got our letter and 3 weeks later it was over.
     
  6. zackman

    zackman Member
    Messages: 43

    I was called out of the blue! She said my named was just picked... Lucky me !!

    When I first started my business I called everyone so I could find out everything that needed to be done..I guess I should have called more people..

    I called my state and was informed even as of TODAY to not pay sales tax on my supplies but to charge sales tax on the whole invoice to the customer (labor & supplies) I did not get the correct information ( well what there saying is the correct information) until I told them that I was being audited. Then he put me on hold to ask his supervisor and then I was told the information he told me was wrong that you have to pay sales tax for supplies and not to tax the customer . Again if I did not push for the correct information I would still be misinformed. What are you suppose to do??

    Long story short from my phone call today I'm screwed.. To much info to write..

    My other problem is resale certificates. They said they were filled out wrong.. It has to have BLANKET on it!! I got that fixed and submitted, and now there saying they are still filled out wrong and want me to pay for all taxes on this. My bill is around $12,000 right now.

    Oh yea they also want sale tax for purchased that were bought online. Which I have no problem paying my BAD for not calming it..

    I am so sick of this and just want to throw in the towel , but another side of me wants to FIGHT this and say you have the freaking money already it was just paid in a different way..

    I don't know! right now I have my accountant helping me but I think my next step is a tax lawyer but I don't know if I can pay everything/ everybody at once. I already owe my accountant $500.00

    I gut is telling me to fight this and not to let the state get anything extra they don't deserve..

    Any advise ???
     
  7. zackman

    zackman Member
    Messages: 43

    I have No idea why it's taking so long... We have gone back in forth a few times but now it's being sent to another person.. I just received an email that I had to agree with them or request and informal meeting so I requested the meeting..
     
  8. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    Why do they want sales tax on your wholesale purchases? The tax on it was paid when you collected from the customer.The reason they are trying to collect at the whole is a lot of fly by night guys are not paying the tax ,then they collect cash for the job. Right was the tax man is doing is hitting you up for just enough so they hope you will sttle and not get a professional tax solution person to fight them.
     
  9. Brian Young

    Brian Young PlowSite Veteran
    Messages: 3,382

    Well every state if different but in PA you have your tax ID number which in short, says basically we pay tax on things like mowers, rakes etc. but things like grass seed, shrubs, mulch etc. we are tax exempt but we charge the customer tax. In PA there is no tax on snow plowing, however, there is tax on salt. Its really weird, someone has way too much time on their hands. In PA we can not charge tax on mulch installation but the mulch is taxable if done in conjunction with other services such as pruning, mowing and a few other's. Honestly, I charge tax on everything but plowing, if they want to complain they can call a State Representative!!!!!
     
  10. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    Oh ya, in NY if you don't have one piece of info they want then they can start a full audit on your company.
     
  11. zackman

    zackman Member
    Messages: 43

    what bothers me is that they got there sale tax money anyway. I think they are just looking for any reason to slam me. I have always paid my sale tax. I just hope I can fight this and win...I know I have to pay some money and I will pay what I was suppose to pay but NOTHING more..

    This really takes a toll on a person/ family !!!
     
  12. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    That's why they are hamming you,you might pay more just to end it.
     
  13. zackman

    zackman Member
    Messages: 43

    Well I know I have to pay for the purchases that I bought online and did not pay sales tax. Some were big purchases too!! but I should have known better and claimed it when I did my sale tax..

    But the other stuff I think court is in my future..Because there not getting a dime more..
     
  14. SullivanSeptic

    SullivanSeptic PlowSite Veteran
    Messages: 3,422

    If you charge sales tax on your product (salt) to your customer, then you need to pay that to the state and feds. It sounds like you might have been charged sales tax when you bought the salt, then charged it when you sold it (or spread the salt). If this is true, then you need to pay this to the state/feds. You have to keep all tax money seperate and make quarterly payments. At least every quarter, if not more often. Its is very hard to keep track of, but thats why I have accountants that do it. But it does almost seem not worth it. Its very difficult to keep a business running the right way now a days. Most people are not doing it right, and by the time they figure it out, they owe too much money. Hence, the low balling in the snow plow business.
     
  15. zackman

    zackman Member
    Messages: 43

    I do sealcoating also and some of the supplies are from that also..
     
  16. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    If sales tax was paid at the time of purchase he's not responsible for that part. On his resale if he bumped up the cost of salt then he owes tax on that part only and what he charged for labor.
     
  17. SullivanSeptic

    SullivanSeptic PlowSite Veteran
    Messages: 3,422

    Right. I thought he said he was charging sales tax to his customers when he plows and salts. If so then the second part of your satement is right on. He owes it. But the easy fix is, dont charge sales tax. Just charge more as a whole.
     
  18. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    No can do. Sales tax must be listed on a separate line on the invoice.
     
  19. SullivanSeptic

    SullivanSeptic PlowSite Veteran
    Messages: 3,422

    But that'd id he is resellonf just the salt. If you atually plow a lot and lay down salt, there is no need to charge sales tax.
     
  20. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    In NY yes you have to.