We recently had a stamped concrete patio installed out our house, and just got the bill. The company and I had agreed on a lump some amount for the job, that included materials, labor, profit, etc.
The bill adds New York State sales tax to the entire amount. Is this right? Should they only be charging sales tax on the materials piece? Or not at all, since they probably already paid sales tax when they bought the materials for use at our house?
I wasn’t really planning on freaking out too much, but was curious.
Not sure about NY, but in most states a business owner does not pay sales tax on merchandise intended for re-sale (like your materials). In Florida, there is no tax on services (the labor) but in other states I have lived in, there is.
It depends. IANATax Lawyer. However, a lot depends on the circumstances of the installer and the work done. See this guide published by NY state tax people.I haven’t gone through this at length, but it looks like at first blush that a company can collect sales tax for services rendered as well as materials. Again, I have not reviewed this closely because I’m surprisingly busy today.
It depends on NY tax laws. As a contractor in PA, I can either be tax exempt on my material purchases, and then tax the end user, remitting tax to the Commonwealth, or pay tax on raw materials, and not tax the end user.
I refuse to be an uncompensated agent of the Commonwealth, so I pay tax on materials.
Wow, in Michigan, as long as the material is provided as part of the service, then there’s zero sales or use tax on the material portion. Additionally, there’s no sales/use/service tax on the service portion, either. It’s all gotta be one package, though. You can’t go buy the materials at Home Depot, and hire a migrant worker from the parking lot to do the work if you want to avoid the tax.
In New Mexico, what we refer to as the “sales tax” is actually a gross receipts tax on businesses. The state requires payment of the tax on all amounts received for goods or services, excepting groceries (but only from stores that primarily sell groceries, and not ready-to-eat foods) and goods or services that are resold or sold by a New Mexico business in another state. For instance, when Mr. Legend’s consulting services were used for a product that was resold by another company (and taxed at that time), he didn’t have to pay gross receipts tax, and when he worked for a California company on a project that was sold in California, he didn’t have to pay it on that amount either.
In this state, the entire cost of your patio, including labor, would be subject to gross receipts tax, and the contractor would almost certainly pass that cost along to you as a “sales tax”.
In Illinois, we pay tax on only the portion of the material sold to the customer. When I sell a job I have to let the office know the square footage of the stone we use so we can pay the appropriate tax on it.
Unde CA law the lump sum is what made it all taxable. A $1995 patio package its all taxable, but a job broken down would only be taxed on sale price of materials.
This is often done so as not to disclose the actual labor rate/ hours or materials prices.