What should I do (charging tax)

[JimJenson]

EXACTLY. That's what I need to get through their head.

Whats so tough about this?
Tell them you'd be happy not to collect sales tax, however, they will need to provide you with a copy of their annual resale certificate to make this happen.

Leave the tax on the invoice.

If they are bent on not paying tax, you could reduce the price until the bottom line is the same as if it was not taxed. But you should leave the tax on the invoice and report it, otherwise you will get screwed in the event of a sales tax audit. You'll end up with roughly 3x the tax as a penalty and interest.

 

[midnightmadman]

Whats so tough about this?
Tell them you'd be happy not to collect sales tax, however, they will need to provide you with a copy of their annual resale certificate to make this happen.

Leave the tax on the invoice.

Yes and the last job they promised they would get it to me and they didn't.. so do I just tell them when they get the certificate I will refund the tax amount?

 

[JimJenson]

Yes and the last job they promised they would get it to me and they didn't.. so do I just tell them when they get the certificate I will refund the tax amount?

Tell them that until you have the proper documents on record, they will be obligated to pay the tax. You may get a quicker response.

Remember, you don't charge tax, you collect it.

 

[GoodPeopleFlags]

Seems like you're trying to find a way not to charge tax. You HAVE to. What you can do - since it seems like you want to keep this customer for some reason - is back the tax out of the total, which is taking money out of your pocket.

Tax here is 8%. So instead of charging them $400 + tax = $432, you'll charge them $370.37 + tax = $400. So you just gave them a $29.63 discount, which is money you should've made. Taxes are paid, though.

 

[midnightmadman]

Seems like you're trying to find a way not to charge tax. You HAVE to. What you can do - since it seems like you want to keep this customer for some reason - is back the tax out of the total, which is taking money out of your pocket.

Tax here is 8%. So instead of charging them $400 + tax = $432, you'll charge them $370.37 + tax = $400. So you just gave them a $29.63 discount, which is money you should've made. Taxes are paid, though.

I know what your saying but the problem is they already drove the price down lower then I wanted to go.

 

[thmooch]

Let me get this straight...Guy beats you up on price, guy wants you to eat the tax, but guy will give you alot of business which you can loose $ on, so you will be to busy to go out and find legitimate customers that will pay full blown retail? No thanks...

 

[SignManiac]

Stop running your business on hopes and promises. If he already nickle and dimed you to death, you're probably too cheap already. Tell him to take a hike and let him pay more somewhere else. Eventually he will be back and on your terms next time around.

 

[schramm]

If you do not charge them sales tax, then you will have to pay sales tax as anytime that you supply a product and not a service it is applicable for sales tax. If you are taking cash, dont talk about it on the net
Even if they have a re-sale certificate they are buying signs for there business and not for re-sale so they are due sales tax. If they refuse to pay them then dont give them the signs and contact the IRS. Never mix friendship with business as it is a deadly combo. I tell all friends that I am happy to do business with them but all the same things apply to them that does the normal customer walking in off the street.

 

[Gino]

There will never be a refund for sales taxes collected before you have their signed documents in hand. The date at the bottom of that exemption form is when you can start giving them tax-free items.... if they are truly reselling these items. If they are using this stuff for their own use... the tax exemption certificate doesn't do diddly for them.

Here in PA.... and probably just about any other state where one collects sales tax for their state.... someone has to pay the sales tax.... for said items. Either they pay upfront.... or THEY are collecting it from their end-user, but anyone collecting these taxes must be known to the state they are doing so. Someone must be paying the taxes somewhere along the line and if this guy isn't re-selling, then he has to pay. These are not business supplies and this kind of advertising is not tax exempt by any means.

I'm a little surprised you are having such a hard time understanding these very simple rules of collecting sales tax for your business.

You only need to ask them one quick question..... do you have a sales tax exemption number ??
If so, are they re-selling this product. Their number and category will tell you that and it will be asked on your certificate.

Have you ever read one of your certificates. Simply having someone's number on file is not enough. You need their entire business name, address, who and what title the person signing has with the company and it has to be a current 2010 certificate. The certificate MUST be dated. You get one of these every year and you must re-new your customers yearly or you can still be fined and get in a lot of trouble.

Reason being, someone might lose their tax exemption status for any number of reasons, so part of your job is keeping your records current.

We've had customers like churches, businesses and other things SAY they were tax exempt, but they couldn't produce a legitimate number after years of being in business.

How current is your tax exemption status ?? ​

 

[gnemmas]

Can't have it both ways.

Figure out your bottom line, add the tax amount, that will be his cost. At the end of invoice, show a discount amount equal to the sales tax. You pay the sales tax for him with his money!

 

[btropical.com]

charge for tax , add onto the top then give discount still pay tax but custy never knows . Pay your taxes

 

[copythat]

Forgetaboutit

Are you running a business? Man up and fire them. They low ball you now! What do you think they will do when they become BIG. Want it for free. Cut the Umbilical cord! Your not in business to baby sit.


SIgn Up!

 

[jiarby]

Yes and the last job they promised they would get it to me and they didn't.. so do I just tell them when they get the certificate I will refund the tax amount?

Tell them that without an on-file copy of their resale certificate you are obligated to COLLECT sales tax. You do not CHARGE sales tax... the state does. You just collect it on their behalf.

Even if they did accidentally pay sales tax for a resale item (because they "forgot" to send you their tax form) they can always just deduct the amount of tax incorrectly paid from their monthly state sales tax return.

Here in AZ they need to provide a 'Form 5000-A'... An affidavit that the items are for resale (or otherwise exempt). They put their TPT# on there and check a box indcating the reason for their exemption. Then they date & sign it.

In my shop we chatge tax on every deal that does not come with a 5000A form... and we do not discount for cash and run the job off the books. I need to show the sales! We only get maybe 3-4 a year that try to pay cash and not pay tax. Not gonna happen. After the first time I quote the job 15% too high.. then "give them" the tax and maybe a 5%. They think they got over on me but paid full fare!.

 

[Locals Find!]

You charge/collect the Tax period. NO EXCEPTIONS without a Certificate. If they don't like it tell them your running a legitimate business. If they don't wanna pay well they can try to pull that crap with someone else.

 

[James Burke]

I know what your saying but the problem is they already drove the price down lower then I wanted to go.

You're not running a business, you're running a charity.

You have two options:
1) Work another job so you can fund your signmaking job
2) Deal only with those who value your work. It's obvious this customer doesn't.

 

[CheapVehicleWrap]

I know what your saying but the problem is they already drove the price down lower then I wanted to go.

Doing work for friends and relatives NEVER works out no matter what the price or industry.

 

[jiarby]

they already drove the price down lower then I wanted to go

Who sets the prices for your business?

YOU set the prices... the customer only gets to decide if they will pay it or not. If you say NO they will pay more.

 

[ProWraps]

if you cant figure out how to charge your customers the legal sales tax YOU ARE DOOMED.

if your customers cant figure out how to pay the legal sales tax THEY ARE DOOMED.

to me, it sounds like you BOTH ARE DOOMED.

 

[GypsyGraphics]

by the book baby.... or you'll be sorry!

 

[webguru]

I know what your saying but the problem is they already drove the price down lower then I wanted to go.

Who sets your pricing? If the price they want to pay is lower than you deem the work worth, don't do the work!

 

[jc1cell]

Don't want to pay tax + nickle and diming = Future hassles = "YOUR FIRED"