Potentially Stupid Question---Tax related

B

B.G.

New member
For those who do mobile detailing, do you charge your customers tax on your services? Ive been running for about 6 months and havent been charging people tax. Im currently set up as a sole proprietor (soon to be LLC), but im just leery by me not charging them that I am going to pay for it come tax time...



Any input would be greatly appreciated. Thanks!
 
As above, it depends on your locale; but generally if you are earning a living detailing you'll be paying state/provincial taxes, so you should be collecting them. Here we have 13% HST which is payable on net income, so if I don't collect it I'm out 13% of my net.
 
That is how it here too. I actually don't tell them I charge sales tax - most customer think this type of service isnt taxable. I include it in my pricing. As mentioned above, if your locale requires it - charge it!
 
AndyVo said:
That is how it here too. I actually don't tell them I charge sales tax - most customer think this type of service isnt taxable. I include it in my pricing. As mentioned above, if your locale requires it - charge it!
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Why not pass that on to the customer? It's for them anyway. You're cheating yourself out of that percentage.
 
MichaelM said:
Why not pass that on to the customer? It's for them anyway. You're cheating yourself out of that percentage.
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He said he includes it in the price.



Definitely check your local state laws, really weird how some services aren't required to collect sales tax and others are. There doesn't seem to be any rhyme or reason.
 
He may be; some people charge tax but build it into the price to avoid the whole "hey if I pay cash can I get a deal?" baloney. I used to build tax into prices (for example, @$60/hr if I worked 5 hours I'd charge them $315...), but the tax required in my locale went from 7% to 13% last year, so I just tell them they are paying tax now since it's such a big chunk. I'd rather my customers be incensed with the government for requiring a 13% than with me.
 
Ok, so I have briefly looked on the internet and I am seeing that I am supposed to be charging tax... I live in Tx. I am going to follow up with the local county tax office tomorrow just to be sure. Thanks for everyone's insights
 
Scottwax said:
He said he includes it in the price.
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I got that, but don't understand the concept. Why do that unless you're gunning to be cash only and not pay taxes?



Thing is his customers are unknowingly paying tax. Essentially it's coming out of his end. I would keep my prices where they were and list the tax in addition. Won't hurt business a bit as sales tax is expected by the customer.
 
MichaelM said:
Have you ever been questioned by a customer why 60x5 didn't equal 300?
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No, because my hourly rate is for me only; my prices are just based on what I want to make hourly. So, previously (before the tax hike), if I saw a car that I thought would take 8 hours I'd quote ~$510. (8x60+7%). They didn't have to know the math behind it.
 
In CT, auto detailing is not a taxable service...yet. They just recently made a bunch of different services taxable, but left some non-taxable. Very confusing, I had to call the tax office to confirm because I was getting different answers from everyone. It even took the guy at the tax office 5 minutes of research to get me the answer. So make sure you talk to someone at your local tax office who can give you a definite answer.
 
David Fermani said:
Holy cow....13% !!!! No wonder why your government can afford to have a publically funded health care system.
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Well, I should have explained it more fully but I figured no one cared. Our provincial tax was already 13% on goods (pst = provincial sales tax = 7%, gts = general sales tax = 6%), but the GST did not apply to services...like lawyers, barbers, detailers, contractors you get the idea. This year they harmonized the taxes (HST), and applied it across the board, so guys like me went from charging 7% to 13%. It was a real kick in the balls for people like me....but just think, as of least year it was 15%, it's actually gone down. :/



Do not move to Canada to get rich, folks. :)
 
Picus said:
Well, I should have explained it more fully but I figured no one cared. Our provincial tax was already 13% on goods (pst = provincial sales tax = 7%, gts = general sales tax = 6%), but the GST did not apply to services...like lawyers, barbers, detailers, contractors you get the idea. This year they harmonized the taxes (HST), and applied it across the board, so guys like me went from charging 7% to 13%. It was a real kick in the balls for people like me....but just think, as of least year it was 15%, it's actually gone down. :/



Do not move to Canada to get rich, folks. :)
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That's right, head to the Yukon, where it's only 5% GST and no territorial sales tax :)



Here in Canada, you only need to start collecting GST (which is a federal sales tax that's country-wide, doesn't depend what province or territory you're in) once your annual gross sales exceed $30,000. PST or HST I have no idea about, since we don't have them here :dance:
 
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