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Subbing and Sales Tax

Discussion in 'Business Fundamentals' started by grandview, Oct 15, 2008.

  1. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    If your a company and are going to be a sub for another company you need to charge Sales tax I just want to confirm this. Since I'm in NY I'm assuming it's yes.
  2. TCLA

    TCLA 2000 Club Member
    Messages: 2,707

    Never heard of that before. :confused:
  3. redman6565

    redman6565 PlowSite.com Addict
    Messages: 1,411

    you are correct sir
  4. plownoob

    plownoob Senior Member
    from ny
    Messages: 128

    I think its safe to assume everything is taxed in ny. The question should be what isn't taxed..and that prolly be a short list.
  5. ServiceOnSite

    ServiceOnSite Senior Member
    Messages: 950

    depends on how you are getting paid. are you gettin paid from a company that i local or out of state? are they cutting you a check that gets reported on a 1099 or just a check for services??? theres a few gray areas
  6. SnoFarmer

    SnoFarmer PlowSite Fanatic
    from N,E. MN
    Messages: 9,883

    Not much help to you but MN has no sales tax on services just goods.
    snowplowing is exempt from sales tax.
  7. RLM

    RLM PlowSite.com Addict
    Messages: 1,270

    If your the subcontractor invoicing the primary contractor (contract holder), then he/she should give you a resale certificate as they are reselling the services. On the ones we do for National management co's thats what has been done. So to answer your question no you shouldn't charge sales tax. Call the NYS dept of taxation for confirmation though, let us know what you find out.
  8. redman6565

    redman6565 PlowSite.com Addict
    Messages: 1,411

    Well, here's how it works, (i would know, we just got sales tax audited), either you charge and report the sales tax as a sub contractor or the person you work for reports the sales tax. either way sales tax is charged for your work, it just depends on whether or not you want to colelct it and report it or whether you want the customer to report it.
  9. RLM

    RLM PlowSite.com Addict
    Messages: 1,270

    Thats what I was trying to get at, general the subs work is "marked up" by general contractoor (contract holder), then tax is charge on that amount to final client (propery owner or tenant).
  10. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    Before this gets to far out. for example. Your company is charging 50 an hr to plow. You plow 2 hrs. you bill the contractor 100x 8.75% (sales tax) = 108.75 .Correct? Then you submit the sales tax money to the state.
  11. redman6565

    redman6565 PlowSite.com Addict
    Messages: 1,411

    if 8.75% is the sales tax in your county then that's correct.
  12. hickslawns

    hickslawns Senior Member
    Messages: 627

    Grandview- I would say this is correct. Even though I have previously sub-contracted thru an outside maintenance company on certain accounts, they did not collect the sales tax and I was required to. However, for local contractors you sub for they SHOULD be collecting. I would bill the sales tax to whomever you invoice. If they are collecting, then hold them to paying the sales tax until they submit the proper paperwork required in your state stating they are re-selling and collecting the sales tax for said work. In Ohio you are responsible to collect whether you collected it or not. Wouldn't want to lose 8.75% off the top if I were you.
  13. bribrius

    bribrius PlowSite.com Addict
    Messages: 1,609

    no service tax for lanscape/snow here.
    Most labor related is exempt from service tax.
    If you drop off dirt then its taxable. If you drop of dirt and level it its not taxable (becomes service) So if you act like a retailer you pay tax, may get a resale certificate if you do over 3k a year. If you apply the products you pay the tax when purchasing the product but dont charge any when applying them since the product becomes service not just retail transaction.

    i think they are working on changing that though.
    So maybe next year all service is taxable?

    They also have a use tax here which i never quite understood completley. i guess if you sub and get materials from the person you sub from and they havent paid taxes on the materials then when you recieve them you pay a use tax? dunno. never followed that one.
    Last edited: Oct 16, 2008
  14. Ipushsnow

    Ipushsnow Senior Member
    Messages: 314

    Snow plowing is exempt here in Wisconsin. But as far as how it works on other things is the END USER pays the tax and the FINAL SELLER collects it. If you sell to a customer you charge him tax and give the money to the state. If you sell to a person who in turn sells it to an end user HE collects and pays the tax. Wholesale or retail is what it comes down to.
  15. Clapper&Company

    Clapper&Company PlowSite Veteran
    from NE OHIO
    Messages: 4,413

    Are these seasonl accounts? oe is scott trying something new?