Saturday, December 15, 2018

Sales Tax, Do I charge on service call ?

August 25, 2010 by admin  
Filed under CCTV Equipment

I am a new business owner in NY . I sell and install CCTV security equipment. I purchase my equipment through a distributor using my TIN number and charge sales tax to my customers including tax on the labor. My accountant is telling me to pay the distributor the sales tax on my equipment when i buy it and then not to my customer. He says so I can file "$0" during each quarter. I understand the concept but if i go to a customers site to fix a camera or computer for example, and charge $125 per hour, do I charge sales tax on my labor. He says no, but any other contractor i speak with says must charge sales tax! Feel like an idiot!

Get a new accountant. Yours is an idiot.

Even if you pay the sales tax on goods for resale, you STILL must collect it from your customers and render it to the state. That’s the reason that you are allowed an exemption from paying sales tax on the goods that you purchase for resale. The ONLY exception to this would be if your customer bought the goods directly from the supplier and paid the supplier and paid the sales tax to the supplier. That takes you out of the supply chain but also means that you forgo any profit on the goods as well.

"installing, maintaining, servicing, or repairing tangible personal property that is not held for sale by the purchaser of the service in the regular course of business (for example, servicing automobiles, installing appliances, and repairing radio and television sets);"

Comments

One Response to “Sales Tax, Do I charge on service call ?”
  1. bostonianinmo says:

    Get a new accountant. Yours is an idiot.

    Even if you pay the sales tax on goods for resale, you STILL must collect it from your customers and render it to the state. That’s the reason that you are allowed an exemption from paying sales tax on the goods that you purchase for resale. The ONLY exception to this would be if your customer bought the goods directly from the supplier and paid the supplier and paid the sales tax to the supplier. That takes you out of the supply chain but also means that you forgo any profit on the goods as well.

    The labor charge is taxable in NY. Labor charges to repair equipment is fully taxable. Here’s a direct quote from Pub 750:

    "installing, maintaining, servicing, or repairing tangible personal property that is not held for sale by the purchaser of the service in the regular course of business (for example, servicing automobiles, installing appliances, and repairing radio and television sets);"

    Here’s a link to Pub 750 to show your idiot "accountant:" http://www.tax.state.ny.us/pdf/publications/sales/pub750_208.pdf
    References :

Speak Your Mind

Tell us what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!

You must be logged in to post a comment.