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Sales Tax Question New York

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MacDaddy
Join Date: May 2004
Posts: 95 Western NY
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2007-08-27          145089


I recently had my well rehabilitated because of very poor recharge rate. When I got the bill from the well driller, I was surprised to see that the he applied NYS Sales Tax on the entire bill including labor. I always assumed that a contractor would itemize labor and materials and charge tax on the materials only. Is this correct?

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Sales Tax Question New York

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candoarms
Join Date: Mar 2007
Posts: 1932 North Dakota
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2007-08-27          145092


MacDaddy,

I'm not sure how New York's laws are written, but in most places there is no sales tax charged on labor.

I'd call the driller's accounting office. It might be a simple error, made by an illegal immigrant.

Joel ....

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Sales Tax Question New York

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earthwrks
Join Date: Dec 2003
Posts: 3853 Home Office in Flat Rock, Michigan
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2007-08-27          145093


Not sure about NY either, but I'm a Michigan contractor who worked in Mississippi and they do charge tax on labor and are quite serious about collecting it too. Michigan is trying to tax certian industries, generally service type things along with entertainment---you know: the "money grab" routine.

A simple call to your state's dept of treasury about taxation would clear that up in a hurry. They may find out this guy is defrauding people and keeping the extra $ for himself. ....

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Sales Tax Question New York

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kthompson
Join Date: Oct 2005
Posts: 5219 South Carolina
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2007-08-28          145123


I would doubt a business which issues a written bill with sales tax on it is trying to "defraud" anyone. Whether they should be charging it have no idea. It truly varies with the state and even possibly the county or city.

In our state there is some items that have no sales tax depending on the "use" they are sold for. How crazy is that for the retailer to keep straight?

Could the business be making a mistake, sure. kt

....

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Sales Tax Question New York

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hardwood
Join Date: Dec 2002
Posts: 3583 iowa
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2007-08-28          145124


McDaddy; Here in Iowa, I just checked the tickets from a shed we had built this spring. All materials had state sales tax (5%), there was no tax charged on the labor. There is no state sales tax on farm equipment, food, prescription drugs, legal services from an atourney, and likely other things that I'm not aware of. On a weekend just prior to school starting the state has a tax holiday on school clothes. Frank. ....

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Sales Tax Question New York

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Art White
Join Date: Jan 2000
Posts: 6877 Waterville New York
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2007-08-28          145142



Labor is taxible in NY. That is another great revenue builder for the great Empire state! LOL ....

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Sales Tax Question New York

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harvey
Join Date: Sep 2000
Posts: 1539 Moravia, NY
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2007-08-28          145151


Macdaddy

Labor in taxable. HOWEVER was your well work a home or property imporvement? NOT MAINTENENCE. There is a difference. Home improvement, materials and labor is not taxable. Maint like installing new shingles, materials and labor is taxable. Painting is maintenance. New siding is an improvement. Installing a new well is an improvement. Fixing an existing well sounds like maintenance. Installing a new leach field when the old one failed is maintenance. The rules are complicated...

Ask your contractor or driller, he is the one that has to prove it to the auditors why he did not collect tax. Sometimes it's just easier to charge tax to save the paperwork hassle. ....

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Sales Tax Question New York

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earthwrks
Join Date: Dec 2003
Posts: 3853 Home Office in Flat Rock, Michigan
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2007-08-28          145155


Kenny. Kenny. Kenny.
Harvey hit the nail on head and said it in a more politically correct way.

If tax IS collected---either "accidentally", or because it was "easier" or "simpler" paperwork-wise, or otherwise such as fraud-- and no one from the State is standing there with their hand out saying "you owe us" where do you think that "tax" goes? It surely doesn't get returned to the taxee nor sent to the Feds --it goes right in the pocket of the seller.

The Arabs in this part of the country, of which I'm well acquainted who own the majority of stores from food to gas to furniture, were running scams doing just that.

And here's something to think about too: years ago I had a joint-venture plastics manufacturing business which sold retail. Under my state's sales tax laws I had to collect sales tax. Oddly though when my taxes were prepared by a CPA, and I lost the business, that collected tax was considered "income". However, in short, that income which included the collected tax ended up falling short of my needing to paying taxes (no profit) and became a total business loss for me. Bottom line, all the tax I collected was legally written off and I did not have to send any to the state. True story. My business loss was a genuine situation---but that said, how many schemers and con-men are out there that fold up shop and never pay taxes at all?

And yes, I'm jis' sayin'... ....

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Sales Tax Question New York

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harvey
Join Date: Sep 2000
Posts: 1539 Moravia, NY
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2007-08-30          145225


One thing you do not have to worry about in New York is the tax man with their hand out.

Businesses that do capitol improvements and maintenance have to justify to the state why they did not collect. It is all signed documents. That's why I said it is easier to tax than to try and justify improvements vs maintenance.

If you collected tax in NYS you are gonna pay it to the state. This state is extreamly greedy and is always looking for more.

RANT ON: These commies want to tax and catch people that barter.

This state really hates the internet and is working hard to collect sales tax on material being shipped into the state. RANT OFF: ....

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Sales Tax Question New York

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hardwood
Join Date: Dec 2002
Posts: 3583 iowa
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2007-08-30          145226


This is a bit off the subject, but with holding taxes from an employees paycheck and then failing to send them to Uncle is not a good idea either. Severasl years ago a busness in our aeria was failing badly so the owner wasn't sending the with held taxes to the IRS. Needless to say he got caught and spent some time mowing grass at a federal facility somewhere. Frank. ....

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Sales Tax Question New York

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kthompson
Join Date: Oct 2005
Posts: 5219 South Carolina
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2007-08-30          145229


EW, hate to bust your bubble but what is sales tax taxable varies so much from state to state it is unreal. Does Delaware have any sales tax? What Harvery said about the differnce between what the materials is used for DOES NOT MATTER IN SC. If you are repairing, build new or adding on it is TAXED. and in SC the one tax you better pay it the SALES TAX. They will close a business quicker for not paying that than any other tax in this state. When you get to something like sales tax that varies so much from one state to another and then throw in the counties and cities and how they add on to the state's sale tax you really have to know for that local tax district and my friend called by the locals as "he who drives in sort of circles", is my story and I am sticking to it. kt

Jeff, did you ever put sun screens on your tractor? No joking or picking on you. No I was not the one who suggested the lace either.


....

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Sales Tax Question New York

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earthwrks
Join Date: Dec 2003
Posts: 3853 Home Office in Flat Rock, Michigan
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2007-08-30          145231


Kenny no bubbles to burst here, bud. No offense either :)

Wasn't it KWSchumm that suggested the lace? (I thought it was you originally) No biggie. No sunscreens needed 'round here, or even down there it turns out. The fiberglass canopy turned out to be more than adequate. And driving in circles---wow--I have been fighting an inner ear infection so if I even look to the right I get dizzy---and that's just sitting at the dinner table. ....

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Sales Tax Question New York

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hardwood
Join Date: Dec 2002
Posts: 3583 iowa
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2007-08-30          145238


Our standard sales tax rate here in Iowa is 5% unless the point of sale is in a city or county that has a "Local Option Tax" that has been voted in by the residents of that city or county. I think the L.O.T. has to have a definete use policy before it csn be voted in, and a definite date it will expire. The last couple years I ran the furniture plant it was always a challenge to know if you charged the "LOT" on something that was built outside the tax aeria ans hauled into the tax aeria, so finally on any that were questionable I would call my cousin who is a state sales tax auditor and ask her, she kept me out of jail. Frank. ....

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