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need help on sales tax issues?

Discussion in 'Business Fundamentals' started by landscaper24, Dec 2, 2004.

  1. landscaper24

    landscaper24 Junior Member
    Messages: 3

    does sales tax apply to snow plowing or deicing service contracts? and looking for a general percentage paid to general liability insurance. if anyone can help i would greatly appreciate it.
  2. TLS

    TLS PlowSite.com Addict
    Messages: 1,425

    What state are you from?

    Here in PA it isn't taxable.

    Maybe post your state in your location, and someone from your state can chime in with the appropriate answer.
  3. Dwan

    Dwan Senior Member
    Messages: 879

    For a correct answer call your local taxing agency.
  4. larryjlk

    larryjlk Member
    Messages: 66

    Here's a good one. In Ohio this year they want us to collect sales tax on snowplow revenues over $5,000. I havn't quite figured out how to do that yet since my accounts are all annual fixed price contracts that I have billed and collected in September. Not really sure how the state plans to enforce it and actually either are they cos I asked.
  5. Dwan

    Dwan Senior Member
    Messages: 879

    Larry, If that were here it would be figured per invoice when dated. So if it was invoiced before the law went into effect then there would be no tax. and if the invoice was for less then the 5K also would be no tax.
  6. larryjlk

    larryjlk Member
    Messages: 66

    I wasn't sure if they meant any account over $5,000 or when total revenues got to $5,000, so I asked them. Believe it or not they didn't know either and they had no idea how they were going to enforce it. It doesn't make any sense to me to pass laws they can't enforce but then what do I know? :)
    Last edited: Dec 3, 2004
  7. dmontgomery

    dmontgomery PlowSite.com Addict
    Messages: 1,238

    It was the same way last year according to my accountant....sales tax must be collected on total revenue over $5000.00....

  8. DJL

    DJL Senior Member
    Messages: 343

    Are you trying to tell me in the gov't the left hand doesn't know what the right hand is doing? Geeezzzz ;)
  9. larryjlk

    larryjlk Member
    Messages: 66

    You're right but I had already billed my contracts in September and the tax wasn't effective until January.
  10. lqmustang

    lqmustang Member
    Messages: 36

    That makes absolutely no sense to me. Let's say I figure I'll have $4k revenue from plowing, so therefore I don't collect any sales tax. Oops, it snowed twice as much as I thought, so now I've brought in $8k. How the hell do you justify to your customer 'Oh, I'm sorry, but since it was a snowy winter I have to charge you sales tax on all the work you paid for in December'.
  11. larryjlk

    larryjlk Member
    Messages: 66

    Sure raises lots of questions, doesn't it? Did I mention that you need a "Service" vendor's licence from the Dept. of Taxation that costs $25

    PLOWGRRL Member
    Messages: 32

    Well I don't know what state you are from...
    But in Illinois, Snowplowing Time is not taxable as it is a "Service". However if Salting, etc. is done tax should be collected and forwarded to IDOR on the Materials only. Unless you are not exempt and you paid tax for the materials. But in the same token you should not collect tax from the client either.