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New York Sales Tax Info

Discussion in 'Business Fundamentals' started by bterry, Jan 10, 2005.

  1. bterry

    bterry Senior Member
    Messages: 183


    Contractors must charge sales tax for plowing, de-icing service (unless the client is exempt and gives you a certificate). I've known it for years and I'm good with that - I think it's wrong, but.. I'm good with that.

    Here's the thing - I (the contractor) can't submit a resale certificate to my salt supplier. So I pay sales tax on the salt I buy. Which by the way, starts to turn into some serious money.

    I called the tax man in Albany - he said do not fill out the ST-120 (resale certificate) or the ST-120.1 (contractors resale certificate). Because I charge more to put it down that it costs me to buy, I can take a credit on my quartly return. The client will pay more tax than I did. Tax man says to take this credit on the ST-100, Column K, Internal Code C.

    This is what happens:
    For every $100 in salt I buy - I pay $8.25 in sales tax
    For every $100 worth of salt I buy, I charge more (say $200).
    For every $200 of salt I spread, my client pays me $16.50 in sales tax.

    When it comes time for me to send in the sales tax, I deduct $8.25 (I paid) from the $16.50 (I collected - and owe the Gov't). I'll need to attach a statement that this is the deal, and prove the tax paid (to my supplier).

    Bttom line here is, you guy's that are spreading salt in New York can save some money. Hope this helps.
  2. Chaser13114

    Chaser13114 Senior Member
    Messages: 103

    I don't understand. We buy bulk salt, so far this year we've bought 150 tons. We submitted a resale certificate to our supplier and are not charged sales tax. We charge sales tax to the end user for materials and labor applying it. Are we doing something wrong? I can't see why you wouldn't be able to just give your supplier a resale certificate.
  3. drplow

    drplow Senior Member
    Messages: 174

    wouldn't you want the salt supplier do all the paperwork and you just hand him one paper. sometimes its a waste of time to screw around with all those tax papers.
    file this, save this, send in that, refigure your taxes and wait for that audit that might happen some day.
    time is money and you will know what is worth it and what is not.
  4. bterry

    bterry Senior Member
    Messages: 183

    I agree totally with both of you. I'm just telling you what the tax man told me, it makes no sense. The only thing I can see to agree with him on is, the resale certificate specifically says that contractors can't use the standard form (ST-120) and must use the contractors one (ST-120.1). That form (ST-120.1) says that it can only be used for tax exempt projects.
  5. Ken1zk

    Ken1zk Senior Member
    Messages: 192

    Im confused here, if YOU are being paid sales tax by your client, why can't you submitt the resale cert to your supplier??? Gotta love doing business in New York :gunsfiring: