RMI - Tax Begins In North Carolina On 1/1/17

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ceb58 said:
Just another monkey on the back of the small business owner. This will give the trunk slammers another leg up on the people that are trying to run a legitimate operation.
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Pretty much, goverment regulation always pushes business into the black market.
 
Ravenvalor said:
Our accountant who has been helping me through this process says that it is a tax increase that the press has kept a lid on. Do not know if it is true or not.
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They are pretty much correct. This tax started at the beginning of 2016. But there was a lot of complaining and the only ones it affected were auto mechanics. They held off of the other trades until now.
 
New Jersey has had a similar tax for decades. Basically capital improvements are exempt (you pay tax on the materials) but anything constituting a "repair" is taxable. Not very hard to manage but it does add a layer of paperwork to your business.
 
I was wrong, that tax started on March 1 2016. After reading the GS, you think the elect. code book is tough, it seems that you must first register with the state and then you will charge 4.75% on your gross receipt above and beyond any tax you have already paid on material unless you can keep every thing separated on the books. OH, this is also above and beyond any privilege license that you may have to have to do business in a county or city. And don't forget to renew your elect. license, gen. liability insurance, workers comp. and on and on.

I just became a trunk slammer :rant: Can you say CASH boys and girls :angel:
 
ceb58 said:
I was wrong, that tax started on March 1 2016. After reading the GS, you think the elect. code book is tough, it seems that you must first register with the state and then you will charge 4.75% on your gross receipt above and beyond any tax you have already paid on material unless you can keep every thing separated on the books. OH, this is also above and beyond any privilege license that you may have to have to do business in a county or city. And don't forget to renew your elect. license, gen. liability insurance, workers comp. and on and on.

I just became a trunk slammer :rant: Can you say CASH boys and girls :angel:
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We have similar requirements here and all of these things are supposed to prevent trunk slammers. :roll:
 
We've had that here in NJ for many years. The long and short of it is the Govt. wants their "VIG". Not sure how it will work by you but whenever I do a new installation I use a "NJ ST-8 Capital Improvement" form ( http://www.nj.gov/treasury/taxation/pdf/other_forms/sales/st8.pdf ) which I fill out and have my customer sign and I retain in my files in the event I get audited. I pay tax on the materials up front and do not charge my customer any sales tax for the capital improvement. If I do any work that would qualify as a "service call" (i.e trouble shooting, changing switches or receptacles) I charge the State sales tax on my labor. The other thing is if or when you "itemize" your invoices (i.e list the materials separately from your labor) that's where the State can catch you. On the other hand if you state on your invoice merely "total labor and material....$$$" then there is nothing to show where you would charge sales tax and I would imagine you would have to back it up with some type of capital improvement form like the NJ ST-8 form.

Now, here's where the rub comes in for me - if I pick up materials at the supply house, pay the sales tax up front, and if I mark up the materials for a profit, the State wants their "VIG" on the difference between what I paid (with the sales tax) and what I charged. What a crock !!! So, the way around that is to have the supply house not charge you any sales tax, mark up the material for profit and then charge your customer sales tax on the materials at the time of installation.

Here's how the math works out - if I buy material for $100.00 and pay 7% State sales tax the material costs me $107.00 (so the State gets $7.00 on the sale). If I mark up the material at say 20% I then sell it to my customer for $128.40 (the State wants an additional $1.50 on the $21.40 difference ). If I buy the material at $100.00 and pay no sales tax, mark it up 20% and then add the sales tax the total still comes out to $128.40 but the State would get $8.40 instead of $7.00.

IMHO, the only way to beat them is to out-earn them.
 
infinity said:
We have similar requirements here and all of these things are supposed to prevent trunk slammers. :roll:
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There will always be a section of the economy that will hire someone who beats your price by $10.00 irrespective of their background or ability. Hence, you get what you pay for.
 
ceb58 said:
I was wrong, that tax started on March 1 2016. After reading the GS, you think the elect. code book is tough, it seems that you must first register with the state and then you will charge 4.75% on your gross receipt above and beyond any tax you have already paid on material unless you can keep every thing separated on the books. OH, this is also above and beyond any privilege license that you may have to have to do business in a county or city. And don't forget to renew your elect. license, gen. liability insurance, workers comp. and on and on.

I just became a trunk slammer :rant: Can you say CASH boys and girls :angel:
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After a lengthly meeting with my accountant on Friday I am instructed to collect 4.75% state plus 2.0% county tax for material and labor for service work and just material tax for capital improvements. I am supposed to buy the material tax free add my markup and then add the tax. If I buy any tools then this has to be reported as a 'use' tax on the same E500 form that I must fill out monthly to pay the other material and labor sales taxes with. He showed me how to set this up in Quickbooks in order to keep track fairly easily.
 
Ravenvalor said:
After a lengthly meeting with my accountant on Friday I am instructed to collect 4.75% state plus 2.0% county tax for material and labor for service work and just material tax for capital improvements. I am supposed to buy the material tax free add my markup and then add the tax. If I buy any tools then this has to be reported as a 'use' tax on the same E500 form that I must fill out monthly to pay the other material and labor sales taxes with. He showed me how to set this up in Quickbooks in order to keep track fairly easily.
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Important to note that the rate varies depending on the county. For instance we are at 7.5%--- 4.75% state + 2.25% County and .5% special- whatever that means
 
Dennis Alwon said:
Important to note that the rate varies depending on the county. For instance we are at 7.5%--- 4.75% state + 2.25% County and .5% special- whatever that means
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So the next question is do we charge sales tax for the county we work in or do we charge the rate of the county we live in.
 
Dennis Alwon said:
So the next question is do we charge sales tax for the county we work in or do we charge the rate of the county we live in.
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My accountant covered that. You charge for the county you do the job in. When you do a job you bill state tax rate plus the tax rate for the county in which the job is in.
 
Dennis Alwon said:
Important to note that the rate varies depending on the county. For instance we are at 7.5%--- 4.75% state + 2.25% County and .5% special- whatever that means
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I see this in posts here from time to time. It's just crazy to have all these taxes.

Example NYC:
Purchases above $110 are subject to a 4.5% NYC Sales Tax and a 4% NY State Sales Tax. The City Sales Tax rate is 4.5%, NY State Sales and Use Tax is 4% and the Metropolitan Commuter Transportation District surcharge of 0.375% for a total Sales and Use Tax of 8.875 percent

In NJ it's a state sales tax and that's it.
 
goldstar said:
Now, here's where the rub comes in for me - if I pick up materials at the supply house, pay the sales tax up front, and if I mark up the materials for a profit, the State wants their "VIG" on the difference between what I paid (with the sales tax) and what I charged. What a crock !!! So, the way around that is to have the supply house not charge you any sales tax, mark up the material for profit and then charge your customer sales tax on the materials at the time of installation.

Here's how the math works out - if I buy material for $100.00 and pay 7% State sales tax the material costs me $107.00 (so the State gets $7.00 on the sale). If I mark up the material at say 20% I then sell it to my customer for $128.40 (the State wants an additional $1.50 on the $21.40 difference ). If I buy the material at $100.00 and pay no sales tax, mark it up 20% and then add the sales tax the total still comes out to $128.40 but the State would get $8.40 instead of $7.00.

IMHO, the only way to beat them is to out-earn them.
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Might want to double check what is required of you. Here if I bought a $100 item and mark it up 20% I am selling it for $120. I track the sales tax (if I paid it at purchase separately) My sale to the client I would charge (say it is 7% tax rate) 120 plus 8.40 sales tax - customer total is 128.40.

When I file sales tax return (presuming that was the only item for the entire tax period) I had a sale of $120, tax due for this sale is 8.40, but before I even get to calculating tax due I was able to reduce the taxable sales by the $100 that I already paid tax on when I purchased it. I am not the consumer in this I am a retailer or re-seller - it is the consumer that is paying sales tax, the retailers/re-sellers are just the agents used in collecting the tax. I actually get to keep a small percent of the collected tax (2.5% of tax due up to $75. max -for a monthly filing period) for my payment so to speak of processing things Most of the time I only get to keep $25 or $30 at the most but all things considered, the computer does most of the work for me so it is easy money for the effort put into it in a way. Most all my suppliers I buy from with no tax charged on the purchase - I have submitted to them a resale tax form that relieves them from needing to charge me the tax - If I was not authorized to submit that form it is on me not them. If I do purchase something from somewhere that I end up paying tax - I account for that when filing sales tax return so the item is not double taxed or partially double taxed.

Now maybe your laws are different, but in general sales tax is not a penalty for the seller, it is a tax on the sale to the final consumer. - it is just something collected at the time of sale by the seller and periodically submitted to the taxing agency by the seller.

Dennis Alwon said:
So the next question is do we charge sales tax for the county we work in or do we charge the rate of the county we live in.
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I think most places the tax due is according to the place where transfer of the taxable goods or services took place. You sell a breaker to a walk in customer at your shop (over the counter sale so to speak) you charge the tax that applies to your shop location. You drive to a different city or county and install that same breaker, you charge and submit to proper tax authority whatever applies at that location, because that is where the transfer of taxable goods or services occurred.
 
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