Do You Pay Texas Sales Tax When Repairing A Roof?

We do, and as I understand it in Texas we accept to!

The thing is, I know of no other roofing visitor in this region who collects sales tax and it's a big cost advantage for them. Their theory is that they pay sales tax on material, and you don't have to pay sales revenue enhancement on labor. Except that you do. The statute is pretty clear that y'all have to collect sales tax on the total amount of the chore.

What gives?

natty

Lefty Said: Information technology gives companys similar u.s.a. a slight advantage over the stores that also install their products.
Now what I first posted should make sense to you.

lefty, I found this: http://www.revenue.pa.gov/FormsandPublications/FormsforBusinesses/Documents/Sales-Utilise%20Tax/rev-717.pdf

According to this, PA imposes a sales taxation on "property that is furnished and installed in the performance of con- struction activities." There is nothing in there that taxes the installation service or labor, or whether or not y'all have a store front end, etc. So, if lowes is collecting a sales tax on the full contract toll, so they are collecting a revenue enhancement that is not owed.

When I get time, I volition investigate OH sales tax laws.

prsroof

NJ sales tax on labor only on all repair work not cloth tax is already paid. Labor and material take to exist broken out. On roof projects no sales tax they're capital improvement. I know I got striking pretty good one twelvemonth.

natty

Lefty Said: It gives companys like us a slight advantage over the stores that likewise install their products.
Now what I first posted should brand sense to y'all.

No, it does not brand sense. Either you lot have incorrectly stated the sales tax constabulary or someone is collecting a revenue enhancement that is not due. No constabulary would be constitutional that gave someone an advantage within the same class of persons. It seems to me that if your state does not impose a sales revenue enhancement on services and only taxes goods, then a place like lowes could set upwardly a service division split up from its retail goods division and not collect a sales tax on services.

Lefty1

clover83 Said: MikeH: Curious nearly your rental setup, we are in a transition phase of doing the aforementioned thing. Do you accept the rental company pay for all expenses on the trucks? We dont currently, simply Im checking in to the legality of it.

In that location is no revenue enhancement advantage for united states of america to have a different company either. You lot need to charge half dozen% sales taxation on the rental accuse. Plus all the added paperwork.

Lefty1

It gives company'south like us a slight reward over the stores that too install their products.

Now what I first posted should make sense to you.

Mike H

clover83 Said: MikeH: Curious nearly your rental setup, we are in a transition phase of doing the same matter. Do you have the rental company pay for all expenses on the trucks? We dont currently, but Im checking in to the legality of it.

Roofing company pays all expenses. The company that owns the vehicles is cipher more than a holding company. The purpose is largely to simply protect our vehicles from being lost in the issue of a bad law adapt. At one time, ownership was distributed to create an "arm'due south length" transaction, thereby providing some tax shelter likewise, but now I ain 100% of both companies, and the "closely held" or "related" companies are taxed at a combined income charge per unit. Still, if something really bad were to happen, at to the lowest degree I would however have all my trucks to open upward once again..... 68 years and counting, so far so good, knock-on-wood.

Mike H

natty Said:
Mike H Said:
Nosotros basically take two options:.

I dont mean to beat this topic to death, but you however have not made yourself articulate. As a contractor, the finish user ultimately pays the sales revenue enhancement. That cease user is the belongings owner. In your pick 1: you seem to be maxim that you collect a sales taxation on the unabridged contract price, whereas in your pick 2: yous are saying the supply house collects a sales tax only on the material and no more tax is collected other than that. That can non be correct considering why would you ever choose your option ane thereby making the property possessor pay a much higher revenue enhancement than they probably owe?

I am apparently perfectly clear, because your reply would betoken that you understood what I said perfectly.

Every bit to why anyone would choose selection 1? Beats me.

clvr83

MikeH: Curious about your rental setup, nosotros are in a transition stage of doing the same thing. Do yous have the rental company pay for all expenses on the trucks? We don't currently, but I'm checking in to the legality of it.

natty

Mike H Said:
We basically have two options:.

I don't mean to shell this topic to death, but you still have non made yourself clear. As a contractor, the end user ultimately pays the sales taxation. That end user is the property owner. In your pick ane: you seem to be saying that you collect a sales tax on the entire contract toll, whereas in your option 2: you are saying the supply house collects a sales taxation but on the textile and no more than tax is collected other than that. That can not be correct because why would you ever choose your choice 1 thereby making the property possessor pay a much higher taxation than they probably owe?

seen-it-all

A new truck for 50K will have $6K in sales revenue enhancement added on. The dealers offer these no involvement over 84 months financing on these deals. The immature bucks get their new 4x4 and the first x payments go to pay off the sales tax. They trade it off in a couple of years and wonder why they never go ahead in life to be able to buy a house. The government is laughing all the style to the bank when they collect tax again when it is resold for $35K.

seen-it-all

In B.C. When I started out in 1987 we had a 7% Provincial Sales Tax we paid on our materials. We never charged the customer any tax on their contracts. In 1991 the Federal Regime came in with a Goods and Service tax of 7% which nosotros charged on the full invoice. We got a credit back on any GST we paid out to conduct concern eg: materials, fuel, repairs etc. The GST over the years dropped to 5% and so in July 2010 nosotros "harmonized" the 2 taxes tand had to charge the customer 12% of the total contract price. A $10k re-roof suddenly became $11,200 after tax. The business concern then could claim a credit on what it paid out. The people cried out in protestation and so in April 2013 nosotros went back to the erstwhile organisation of split tax.

Be thankful for what y'all have as it can get a lot more than complicated when different levels of authorities get involved.

My biggest revenue enhancement beef over the years has been the practice of collecting sales tax every time a used vehicle is sold. The bigger the lemon the vehicle is, the more than times information technology is traded in and the more tax the government collects. Large lemon = large tax acquirement

Mike H

natty Said:
Given that you may have used the term revenue enhancement exempt loosely, what is beingness taxed- the material just or the entire projection?

We basically have 2 options: 1. We can ourselves exempt from state sales revenue enhancement (From this indicate forward, I shall refer to that as "revenue enhancement exempt"). When a contractor chooses to make their material purchases revenue enhancement exempt, they must charge sales tax to the customer. I don't know the exact dissever, only it must be fairly common to do so, as many lump sum contracts and/or buy orders specifically mention that the lump sum is inclusive of all fees, sales tax, etc.

2. We can choose to waive the tax exemption and pay sales taxation at the point of buy (ie, the supplier). There are some fine hairs to split in making this pick and one must be very articulate about their business. Every few years my auditor will review our situation before making the declaration that we do not demand to charge sales tax on our contracts as long every bit we go along to pay the sales revenue enhancement on all fabric purchased, excluding those used for exempt organizations, in which case nosotros need to file the specific tax exemption forms.

In a similar case, all of my vehicles are owned under a unlike company and leased back to the roofing company. At one fourth dimension I had a motor vehicle dealer'south license and did not have to pay tax on the original purchase of the vehicle, but did have to pay tax on all rentals. I let that dealer'due south license lapse and now pay taxation at the time of purchase, merely not on the rental.

At least in Ohio, our sales tax tends to be a one time tax on appurtenances. Some states have a sales tax that would be better described every bit a VAT, or Value Added Tax, in which sales tax is applied to the increased value of any given product sold.

As for the term "tax exempt". It's non a loose usage. The term is non specifically limited to charitable, religious, educational non-profit organizations. Tax exempt tin be practical to whatsoever status when an exclusion to a particular revenue enhancement applies, and that's the form of my usage throughout this chat.

Roofguy

Not sure but in Texas I don't retrieve sales tax is paid on new residential.

natty

Mike H Said: I sympathize what tax exempt means in its many different forms.

So what did yous mean when yous said this? "Mike H Said:

In OH, we charge sales tax on the project if we Declare ourselves taxation exempt at fourth dimension of material purchase. If we do not Declare as such and pay tax on all material purchases, then we do not accept to collect a sales tax from the consumer."

Given that you lot may have used the term "tax exempt" loosely, what is beingness taxed- the material only or the entire project?

egg

When a state is that monumentally thirsty it has to know it'southward going to be drinking people nether the tabular array.