Roofers Charging Sales Tax

Tom, It is no different then what you have to do. If you increase the price of the materials by marking them up, you are selling the materials instead of supplying them. One way you have to charge a sales tax the other you do not. If you charge a sales tax on the materials you also have to charge a sales tax on the labor.

With a non profit it is the same way. File the paperwork and you do not have to pay the sales tax on the materials you supply.

natty Said:

twill59 Said: Simplest solution to all this bs is the Fair Tax

Too funny...the Fair Tax is a national sales tax. You have yet to explain the sales tax rules for Indiana- a national sales tax would be complicated beyond belief. And Lefty has just given up explaining the PA sales tax.

Not looking to argue. But pray tell how the fair tax would be any more complicated than what we already have :S

twill59 Said: Simplest solution to all this bs is the Fair Tax

Too funny...the "Fair Tax" is a national sales tax. You have yet to explain the sales tax rules for Indiana- a national sales tax would be complicated beyond belief. And Lefty has just given up explaining the PA sales tax.

Seems to me, the states are creating all your "BS".....Could it be that your state(s) are simply intentionally miss-labeling this "sales Tax" when actually it's a "use tax"? The public will digest easier? Gotta love our gooberments......

We supply the material and pay the sales tax at the lumberyard. We get $2 - $2.50 per square foot of plywood replaced.

Residential or commercial. That is all.

Seems to me that we are in the service industry, not manufacture ir retail. Of course we can add value to a product. But is that the same as re selling the product? Perhaps. Simplest solution to all this bs is the Fair Tax

Wow! What a PIA! In Colo. & Ca. we pay sales tax at point of sale only (w/supplier). Never mess with sales tax BS, other than those that are exempt, (i.e. Amer. Indian properties., etc).

Roofguy,

We do not invoice separately. We just state we will supply materials to complete the project. If we mark up materials then we are making money on materials. This means you need to charge sales tax.

I can see a lot of issues with invoicing material separately. Customers generally can't comprehend the cost of doing business and maintaining his roof for 15 years and most would think we're making too much "profit" on their job.

twill59 Said: But I did adjust my wording on the invoices to minimize mentioning material. Just a PIA thing.

You could look up the IN law. My guess is that the revenue agent was trying to catch you marking up the price on the material. If so, you would be liable for the sales tax on the markup. A lot of home repair outfits mark up the material then the homeowner pays more in sales tax than they should. I would think a better practice would be to invoice the job at material cost and let the supplier collect the sales tax. This only works in states that don't tax residential home repairs like TX.

I still can't make sense out of what Lefty said.

I get so sick of dealing with these government-think bullies. Ironically, I just got a notice from the State Comptroller - evidently I sent in our monthly tax return but I fail to put a check in there.

In spite of the fact that I've never been 1 day late in the past, they sent me a nasty letter, demanding I go to a hearing to show why my account shouldn't be cancelled. Cancelled? Cancelled????? Does that mean I wouldn't have to screw with it anymore, or that they they think I should just go out of business?

It's madness. And if there is one thing I hate it is calling up morons and kissing their butts because their egos are so delicate.

I dont know what the true law says. I suppose it would have to go to court to get the answer. As I read this now, I wonder if I had some mistaken agent push the wrong interpretation at me. My understanding before this was yes, the sales tax only gets paid once. Seems like in practice that is true still. Anyway this was like 10 yrs. Ago and ive never heard back from them. But I did adjust my wording on the invoices to minimize mentioning material. Just a PIA thing.

twill59 Said: An example to give, if you change a sheet of plywood for $55, as far as the state of indiana is concerned, you actuallly SOLD that sheet for $55.

So are you saying IN double taxes? Do you pay a sales tax on the $10 sheet of plywood when you buy it then your customer pays another sales tax on the entire contract price? Does IN tax residential construction projects? And are you saying that there is some way to avoid these taxes by wording your invoices a special way?

Lefty Said: Natty, I have no idea what your example has to do with the conversation.

To make my post clearer. If you sell material to the customer, like a Lowes and also install the product you need to charge sales tax on both.

If you do not sell materials, just supply them, you do not have to charge sales tax.

In my example, I was illustrating how I have encountered sales people trying to charge a sales tax when the law didn't require a sales tax. Apparently Lefty in PA and twill in IN have understood their sales tax laws to only tax construction labor if it is provided by a store that also sells materials. That does not seem fair or right. In TX, all material sales must add a sales tax, but that sales tax is only paid once by either the contractor or the material supplier who sells the material. Then only the labor on commercial projects is charged a sales tax. On residential projects, there is no sales tax on labor.

For example, if I contracted to reroof an office building for $10K and material cost me $5K, I would give my sales tax number to the material supplier and they would not charge me a sales tax. Then I would have to collect a sales tax from the property owner on the entire $10K. But, if I contracted to reroof a residential home for $10K and material cost me $5K, I would just pay the sales tax on the $5K material to the supply house. There is no sales tax on labor on residential projects in Texas.

natty Said:

twill59 Said: I was audited and warned once before. The solution turned out to be: be very careful how you word your invoices and try not to mention materials at all.

Please explain because this sounds like creative accounting for the purpose of tax fraud. What is the law where you do business?

Creative accounting? :S yes, I guess so. An example to give, if you change a sheet of plywood for $55, as far as the state of indiana is concerned, you actuallly SOLD that sheet for $55.

Like lefty said, im not running a store