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Tax ? Minnesota

Discussion in 'Business Fundamentals' started by PTTP08, Feb 2, 2011.

  1. PTTP08

    PTTP08 Senior Member
    from mn
    Messages: 183

    I am new to the biz and I am a really small outfit but I seem to be getting bigger and I want to have my "ducks in a row"

    should I be charging sales tax on my invoices? I read for snow removal is not taxable and lawn care is taxable. Is this true?

    also I am getting 1099ed at the end of the year on my commercial accounts so do I tax these invoices? Or am I paying the tax at the end of the year so to speak?

    I think I am going to hit the books!

    Thanks much!
     
  2. PTTP08

    PTTP08 Senior Member
    from mn
    Messages: 183

    I also am doing the right offs for gas and maintenance repair and all that jazz. I forgot to say this before.
     
  3. PTTP08

    PTTP08 Senior Member
    from mn
    Messages: 183

    After some extensive research on the MN.Tax web site we figured it out!! But the hard and annoying part was getting my quick books to stick on a dam invoice!! Ya gatta love uncle sam!!
     
  4. lazyike

    lazyike Member
    Messages: 74

    Yep, very confusing when you are starting out. No sales tax on snow removal, but there is sales tax on lawn cutting, Tree trimming, shrub trimming, but if you leave the shrub trimmings it's not I think. But yea it gets confusing, also if you salt or sand that is taxable. Best thing you can do is call a tax preparer, they can help you usually for free. Good luck.
     
  5. Mike_TT&L

    Mike_TT&L Junior Member
    Messages: 5

    lazyike: Are you sure on the salting and sanding being taxable? I saw this post and brought it up in our office. Our office guru checked and can't find where it would be taxable. If you are sure these are taxable can you point me in the right direction to find out more information? Much thanks for any help/direction.

    Mike @ TT&L
     
  6. Camden

    Camden PlowSite Fanatic
    Messages: 6,598

    You definitely don't have to pay tax on plowing but I'm not sure about de-icing. I haven't been but because it's such a small amount of my overall revenue I'm not too concerned about it.
     
  7. Deershack

    Deershack Senior Member
    Messages: 797

    Just as crazy is hauling black dirt and such. If you order it and I dump it in your drive, I have to charge you sales tax. However if I spread it, there is no tax. Since there is nothing said about how much needs to be spread, in theory, I can just pull the truck ahead for the last little bit or for that matter, get out and throw a couple of shovel fulls and I'm in the clear.
     
  8. qualitycut

    qualitycut PlowSite Fanatic
    Messages: 24,227

  9. tuney443

    tuney443 PlowSite.com Addict
    Messages: 1,847

    You might want to check on that.The state of Mn. wants their cut,whether it comes from you,the contractor, or the vendor.The product is 100% taxable,the trucking of it I'm not sure in your state,In NY years ago there was a loophole regarding just that because trucking was non-taxable[now it is],so excavators would and could legally come up with all sorts of different creative ''bottom line figures'' on the invoice to lessen the sales tax collected.
     
  10. Mike_TT&L

    Mike_TT&L Junior Member
    Messages: 5

    Thanks QualityCut, that clears it up for sure.
     
  11. Camden

    Camden PlowSite Fanatic
    Messages: 6,598

  12. Deershack

    Deershack Senior Member
    Messages: 797

    You may be right. I am going by advice I received from the MN Revenue Dept. in a phone call asking if I should be charging sales tax. They told me the above. I pay the sales tax when I purchase at the pit and collect it from the customer. They apparently make a distinction between me selling a product (in this case black dirt) and providing a service, the spreading of the dirt.
     
  13. lazyike

    lazyike Member
    Messages: 74

  14. Dr Who

    Dr Who Senior Member
    Messages: 637

    I know all this is state to state, but if you buy your salt and pay sales tax, I would think that you could not charge sales tax for it. it would be double taxed, unless you can tax for the spreading of the salt, not the salt it self.

    Like I said, its differnet in every state, but here I buy salt, sand, or anything else for that matter and I pay the sales tax on it. I can not charge sales tax on it leagly, it would be double taxed. Now here Service is non-taxable, I would be very careful with this, you could end up wiht a lot of fines..

    best thingto do is talk to a GOOD tax person, someone you trust...
     
  15. qualitycut

    qualitycut PlowSite Fanatic
    Messages: 24,227

    You are paying tax on the material when you buy it so they are already getting their cut.
     
  16. tuney443

    tuney443 PlowSite.com Addict
    Messages: 1,847

    Well that would be a double taxing of the same sale which isn't right.For instance: I have annual resale certificates filed with all the gravel banks/quarries I do biz with.I do not pay sales tax to them,the vendor for any load because I'm collecting it from my customer.
     
  17. Mike_TT&L

    Mike_TT&L Junior Member
    Messages: 5

    If salting a parking lot was taxable, you would then buy your salt as tax exempt and then charge customers with tax. being that it is not a taxable charge, you buy your salt with tax included and charge your customer appropriately to cover your tax paid which is "use tax" for the local where the work was done. Get into a community where tax rates are different (more) than state minimums, have fun...., get your accountant involved. You now owe that difference in that community that charges different tax rate for the use tax.

    Tax is almost always due at some point, it is just how it is distributed at the final sales point end. Tax that the customer pays or a service that is nontaxable that has materials paid for with use tax.
     
  18. qualitycut

    qualitycut PlowSite Fanatic
    Messages: 24,227

    Just out of curiosity does that benefit you in any way? Reason I ask is seems like more work for you
     
  19. lazyike

    lazyike Member
    Messages: 74

    Well then I guess the state owes me mony back then:dizzy::dizzy:
     
  20. Deershack

    Deershack Senior Member
    Messages: 797

    Sounds like I didn't make myself clear. I buy the product from the pit and pay for it plus the tax. When I bill the customer, they pay the total I paid the pit. There is no double taxation since they are just covering my out of pocket. Since the tax has been paid, there is nothing to report to the State. It is no different then the customer going to the pit in person. I charge for my delivery of the product and that is not taxable.