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Income tax?

Discussion in 'Business Fundamentals' started by CK82, Mar 18, 2007.

  1. CK82

    CK82 Senior Member
    Messages: 189

    I heard through a friend in the snow removal business that since snow removal and retaining walls are liabilites? there is no income tax associate with them? I dont belive this but hopefully its true!
  2. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    Go with your first instinct.

    That reasoning for not being taxable doesn't even make sense. It's income; it's taxable.
  3. theplowmeister

    theplowmeister 2000 Club Member
    from MA
    Messages: 2,617

    retaining walls ????
  4. GFX

    GFX Member
    Messages: 49

    I think he meant sales tax. Snow plowing and retaining walls in Wisconsin are not taxable sales. The income you make off them is taxable.
  5. AbsoluteH&L

    AbsoluteH&L Senior Member
    Messages: 573

    I wish it were true!! As said, probobly meant sales tax. Just put the quarterlys in the mail box today.
  6. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    Same here 8.75% sales tax.payup
  7. UglyTruck

    UglyTruck Senior Member
    Messages: 210

    My tax guy has told me for several years running that "Service only" is not subject to sales tax but if I sell so much as one nut, washer, grain of salt, etc.... then the whole thing is taxable for parts & labor..

    so my invoices are 1/2 & 1/2. those that get Icemelt are taxed and those that are "Service only" are untaxed....this may be an Iowa only thing though.....

    as far as the construction trades go...new construction is not taxable whereas remodel or repair is taxable....
  8. CK82

    CK82 Senior Member
    Messages: 189

    Ok got it so snow removal and retaining walls have income tax. Snow removal is sales tax free, salting (product) has to have sales tax paid either at the point of sale or by the customer in the end. So is the salting service itself have sales tax or just the re-sale of the product?
  9. UglyTruck

    UglyTruck Senior Member
    Messages: 210

    I am by no means a tax guy so PLEASE run this question by your tax guy...

    The way that I do my billing if I was there and am billing them for labor only:

    plow &/or snowblow with no Icemelt then it is billed as "Service only" and not taxed

    now, if I do the same lot & spread Icemelt on the sidewalk, I then have to bill for Icemelt....billed as materials.

    once I add this to the invoice I then am required to charge sales tax not only on the price of the Icemelt, but also on all the labor. associated with that same job...

    does that clear it up for you or is it clear as mud????

    can anyone else articulate this better than I have??? I think that all I have done is confuse the issue

  10. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    Laws pertaining to sales tax are set by the State. There are wide differences and even comparing one state to another is meaningless.
  11. GFX

    GFX Member
    Messages: 49

    See if this helps answer any of your questions. http://www.dor.state.wi.us/pubs/pb210.pdf
  12. The mayor

    The mayor Senior Member
    Messages: 272

    There is NO tax for snow removal in the state of wisconsin. Trust me I did alot of refunds for taxing my customers.