Accountant/Sales Tax

[element009]

Hi all, 1. My business is in NJ, and so part of this question is NJ specific. I had a meeting with SCORE (a free small business counseling service) and they told me that lawn care was not a service that required me to charge my customers sales tax. However, I've been doing more research, and now I think I actually do need to charge sales tax. Does anyone from NJ know the right answer to this. I'm just doing lawn maintenance right now (cuts and clean-ups basically). 2. I am just getting off the ground and trying to keep costs low. How much will an accountant cost me? Can I do without one in the beginning? Any advice would be greatly appreciated.

[mathteacherj]

Lawn care business tips

I too have been looking into this lately. Keeping in mind that I'm in Indiana, here's what little understanding I think that I have. You should be able to get a tax exempt number where you will not pay taxes on the products that you buy for your company. (or at least the disposables) That tax, you charge to your customer and that is how the state gets paid. I THINK!!! :-) And I'm thinking that my accountant is between 35-50/hour. Good luck!

[Paineless Creations]

Originally Posted by element009

Hi all,

1. My business is in NJ, and so part of this question is NJ specific. I had a meeting with SCORE (a free small business counseling service) and they told me that lawn care was not a service that required me to charge my customers sales tax. However, I've been doing more research, and now I think I actually do need to charge sales tax. Does anyone from NJ know the right answer to this. I'm just doing lawn maintenance right now (cuts and clean-ups basically).

2. I am just getting off the ground and trying to keep costs low. How much will an accountant cost me? Can I do without one in the beginning? Any advice would be greatly appreciated.

I went round and round with this also. But after reading the DOR (Washington State) website I charge sales tax also. I know that does not help in NJ. But I thought I would share I charge sales tax. What I found out is that this is NOT a PERSONAL Service, Like haircutting,nails,chiro,doctor.. ETC.. Those items you do not charge sales tax

[Liberty Landscaping LLC]

Hey
I am in NJ too. I charge it. I asked my accountant and my lawyer both said I have to charge. On the accountant. You have to claim it as well as pay yourself or if you go for a line of credit IE a business loan, mortgage, auto loan you show income. That's what they all told me about that too. Good luck if you need anything message me.

[Steve]

Although this can change, it appears normally, services that create capital improvements on a property are taxable, like planting a tree. Mowing a lawn tends to not be viewed as a capital improvement.

There is a bunch of information on this that you can read more on here

Informational Guide - Landscaping Services and New Jersey - Sales Tax

Tax Notes - Landscaping Services

Which says.

Repair and Maintenance Services
The Sales and Use Tax Act currently imposes tax on charges for maintaining, servicing, and repairing real property. N.J.S.A. 54:32B-3(b)(4). Repair and maintenance services performed by landscapers are subject to tax under this provision. The following are examples of taxable repair and maintenance services performed by landscapers:

* Lawn mowing

At times, you will get an adviser who will err on the side of caution and tell you to charge sales tax on an item you don't need to. So it is important you do your own research to confirm.

Let me know if this helps.

[element009]

Thanks for the help guys!

[ToastedToad]

Originally Posted by Paineless Creations

I went round and round with this also. But after reading the DOR (Washington State) website I charge sales tax also. I know that does not help in NJ. But I thought I would share I charge sales tax. What I found out is that this is NOT a PERSONAL Service, Like haircutting,nails,chiro,doctor.. ETC.. Those items you do not charge sales tax

I concur for Washington State. Most customers are shocked to see tax included for mowing services.

[Paineless Creations]

Originally Posted by ToastedToad

I concur for Washington State. Most customers are shocked to see tax included for mowing services.

Hey where in Washington are you? I am in the Tri-Cities

[Tom53]

I just did my last years taxes today, and spoke to the accountant about this.
In Iowa it IS a taxable service. There are 2 ways I can handle it. First put the sales tax on the invoice and collect it. Most people here would be shocked to see it, as they don't pay tax to the high school kids who used to mow for them. OR and this is how I will handle it, I just charge them the set amount and I just eat the sales tax on that amount. Not much for one small residential property, which is all I do for now, but it could really add up for those with a large number of customers or commercial properties. If I did commercial properties, it would be taxed on the invoice. I believe they would expect it.

The formula here is to divide the cost by 1.07 % to get the tax due.

Example a $40.00 job, customer pays me $40.00, and I keep my books and record that I keep #37.38 and the other $2.62 is what I will owe the state for sales tax on that job. We do not have to pay sales tax on snow removal though.

[turf&tree]

Here in Ohio we have been charging it for about 18-20 years. The state came to us back then and told us we had to charge for it. It is based on each counties tax rate that you would work in. 95% of the customers are ok with it. Some opt to pay cash and do not get taxed by me. But yes if you are buying the products like fert and mulch you do not pay sales tax on it at the p.o.p
But need to charge the customers for the tax. I also set up an equipment repair company on the side and do not pay tax on equipment or parts as well.
They are assuming I will be reselling them through that business.