Customer Doesn't Want To Pay Sales Tax

[UFB Fabrication]

Make sure if someone says they are tax exempt you get the proper form for your state filled out. My wifes company had a audit done a number of years ago and they did not have all the forms. Since they did not have the forms they were on the hook. No big deal only about 1.2 million. One of my sign customers got hit the were only taxing material not mark up and labor. I think it was around a hundred G's

 

[jiarby]

Here in AZ service labor is not taxable (yet!) BUT you have to break it out on your invoices into subtotals (like the auto repair guys do)

You can download a W9 and require that be filled out before hand... and here in AZ the tax office has a form 5000-A for state sales tax exemption.

If they are REALLY a tax exempt operation then they know this already and should be prepared with the right forms. "Have your treasurer fax over a W9 (for federal EIN#) and TPT-5000A (for state sales tax ID) and I can remove the tax"

Having the number on a cocktail napkin is not enough... you need the sign and dated forms.

PLUS..

Even if the ARE a tax exempt organization, then can still PAY the tax and then just deduct it when they do their return. Just like your income tax, if you have overpaid your tax you will get a refund.

 

[pointjockey]

pay the sales tax for them and hit the print button. 35 emails and I'm getting the job, at this point they walk away and you lose all your time swapping emails.
I'm assuming that you are getting $250 or more for the banner?????????????

 

[UFB Fabrication]

Here in AZ service labor is not taxable (yet!) BUT you have to break it out on your invoices into subtotals (like the auto repair guys do)

You can download a W9 and require that be filled out before hand... and here in AZ the tax office has a form 5000-A for state sales tax exemption.

If they are REALLY a tax exempt operation then they know this already and should be prepared with the right forms. "Have your treasurer fax over a W9 (for federal EIN#) and TPT-5000A (for state sales tax ID) and I can remove the tax"

Having the number on a cocktail napkin is not enough... you need the sign and dated forms.

PLUS..

Even if the ARE a tax exempt organization, then can still PAY the tax and then just deduct it when they do their return. Just like your income tax, if you have overpaid your tax you will get a refund.

Service and labor are not taxable for stuff like installs or repair work but if its a sign you pay sales tax for the whole thing just like a car or anything else.

Also if its a ongoing customer you must have a updated or current form as well.

 

[UFB Fabrication]

pay the sales tax for them and hit the print button. 35 emails and I'm getting the job, at this point they walk away and you lose all your time swapping emails.
I'm assuming that you are getting $250 or more for the banner?????????????

At 35 emails it should be more like 25 thousand.

 

[Rooster]

Add this line to the bottom of all your future quotes:

Prices do not include taxes where applicable. This quote is subject to review upon receipt of working materials.

 

[jiarby]

I'm assuming that you are getting $250 or more for the banner?????????????

go premium to talk pricing... but almost.

 

[ratchet]

glad it worked out in the end.

The next time someone complains about sales tax, tell them to move to Nova Scotia... ours is about to go up to 15%
[sarcasm] Yeah! [/sarcasm]

 

[G-Artist]

In most states pure labor is not taxable. For instance your truck mechanic tightens your
fan belt. No tax. If he adds so much as a pint of oil to the crankcase at the same time then
the ENTIRE job is a taxable event.

Anyone who believes they can use subtotals and avoid the labor taxes on the total invoice
had best pray they don't get a state audit.

I just had a major go-round with my state's sales tax folks. They almost put me out of business
as they froze my bank account and only because I failed to respond to them. I failed to respond
because all the crap they sent went to an address I have never heard of, never visited and
that was strange because we have been at the same addy and filing from the same addy for well
over 30 years (office addy, not shop).

Anyway, after clearing up the matter my lawyer left and I was chatting with one of the specialists.
Learned something new. If I build a sign be it pylon or wall attachment or even letter a store front
window, I am not supposed to charge tax as that is an improvement to commercial property
and that will be covered by property tax. Put the same vinyl legend on the rear window of
that same business's truck and it is a taxable event. I talked to 4 other sign shops about their
practice - they, like me, have always charged for all their work except resale.

Who knew???

 

[UFB Fabrication]

One thing is for sure the state will not complain or likely return if you collect to much tax.

On another note they just raised our collection rate 7.825 to 7.925 percent to our sales tax to help with a short fall in our metro mass transit. That was a month ago. No with state budget cuts the state will cut the amount they kick in. Hmmmmm.

 

[Gino]

In most states pure labor is not taxable. For instance your truck mechanic tightens your
fan belt. No tax. If he adds so much as a pint of oil to the crankcase at the same time then
the ENTIRE job is a taxable event.

Anyone who believes they can use subtotals and avoid the labor taxes on the total invoice
had best pray they don't get a state audit.

I just had a major go-round with my state's sales tax folks. They almost put me out of business
as they froze my bank account and only because I failed to respond to them. I failed to respond
because all the crap they sent went to an address I have never heard of, never visited and
that was strange because we have been at the same addy and filing from the same addy for well
over 30 years (office addy, not shop).

Anyway, after clearing up the matter my lawyer left and I was chatting with one of the specialists.
Learned something new. If I build a sign be it pylon or wall attachment or even letter a store front
window, I am not supposed to charge tax as that is an improvement to commercial property
and that will be covered by property tax. Put the same vinyl legend on the rear window of
that same business's truck and it is a taxable event. I talked to 4 other sign shops about their
practice - they, like me, have always charged for all their work except resale.

Who knew???

I tend to think that many of them are quite the opposite of improvements and indeed de-value the premises.

 

[MrSigns]

I am from Montana. No Sales Tax.

 

[binki]

A good many of these organization and non profit groups are tax exempt. Have you checked? Possibly your wife would know.

In the People's Republic of California just about no-one is exempt from sales tax, only the State itself and less that 1% of non-profits and they must have a specific letter from the BOE stating so. It is also the responsibility of the seller to collect or otherwise pay the tax and to establish if the buyer is a valid reseller for purposes of wholesale sales that are not taxable to him.

In addition, any items not sold that were not taxed are taxable to the buyer. This includes things that are discarded or wasted.