Service Tax

[ncsawyer]

NC has implemented a tax on services effective March 1st.  Thankfully it is only repair, maintenance, and installation, so it does not affect me yet.  But I can see where they might expand the list of taxable services in the future where I could find myself having to collect sales tax on my milling services. 

Are there any states out there now that collect sales tax on milling services?

[terrifictimbersllc]

State doesn't collect sales tax, the vendor does.  In CT, RI, NY the sale of the service of sawing lumber for customers from their logs, is subject to sales tax.
https://forestryforum.com/board/index.php/topic,55938.msg809496.html#msg809496

Your state may allow exemptions from paying the sales tax for certain customers.  The ones I am familiar with require the customer to give the vendor (sawyer) the proper form.  One instance is the sale of services to another business which sells a product on which this business collects sales tax.  In CT this form is called sales for business resale.  Another is a farm permit which alleviates payment of sales tax on the sawing of lumber that is used to build a new farm building or expand the footprint of existing construction.   In both cases the sawyer would not charge sales tax to the customer.   Having the proper form in possession, if such was used properly,  alleviates the sawyer of the responsibility of owing the sales tax to the state.

In all of the above we are talking about sale of a service (e.g., sawing), not sale of goods (e.g. lumber).

[ncsawyer]

State doesn't collect sales tax, the vendor does.  In CT, RI, NY the sale of the service of sawing lumber for customers from their logs, is subject to sales tax.
https://forestryforum.com/board/index.php/topic,55938.msg809496.html#msg809496

It works the same here in NC where the burden of collecting sales tax falls on the vender.  However, I think the vender is compensated slightly.  If the sales tax is 6.75% the vender only has to send in 5.75% allowing them to keep 1% for their trouble.

[terrifictimbersllc]

State doesn't collect sales tax, the vendor does.  In CT, RI, NY the sale of the service of sawing lumber for customers from their logs, is subject to sales tax.
https://forestryforum.com/board/index.php/topic,55938.msg809496.html#msg809496

It works the same here in NC where the burden of collecting sales tax falls on the vender.  However, I think the vender is compensated slightly.  If the sales tax is 6.75% the vender only has to send in 5.75% allowing them to keep 1% for their trouble.

Yes that's how NY does it.  Not CT or RI (presently anyway).

[WV Sawmiller]

   WV already taxes sawing services. I investigated this last year before I ever got my mill and started my business. I confirmed I have to collect sales tax on every sawing job I do. I first thought since was a service I could avoid it but the tax people were real clear from day one.

   Good luck in NC. Politicians are looking for money everywhere they can get it.

[ncsawyer]

Do you have report and pay the sales tax quarterly?

[Tom the Sawyer]

Kansas requires sales tax, at the local prevailing rate, on milling services.  Vendor collects the tax and reports periodically.  Due dates vary by the size of your account.  I am on the quarterly plan.  Large businesses may be paying monthly, in advance. 

Cutting or pruning trees, or mowing grass, is not taxable because trees and grass are considered to be "real" property.  Once severed, they are considered "tangible, personal property" and anything done to them is taxable.  Milling lumber, splitting firewood, raking grass - all taxable. Spraying a field is not taxable, the cost of the chemicals is taxed.

[Magicman]

Oh the web that we weave.   

[WV Sawmiller]

Do you have report and pay the sales tax quarterly?

   I report and pay WV Sales tax monthly. My wife has a photo business and only sends hers in annually. I guess it is based on the estimated income we each reported when we applied for our WV business licenses.

   Oh btw, we do not get any compensation for collecting and reporting WV sales tax. I collect, report and pay 6%. Some of my clients are farmers and have a tax exemption number and if lumber sawed is for their use on their farm they do not have to pay sales tax. I just get a copy of their tax exemption number and keep it on file with their invoice/payment record.

[jmouton]

exactly    ,,, magicman


                                                                           jim

[Chuck White]

  smiley_curtain_peek 

[4x4American]

Yup, the tax man and the devil share the same address

[starmac]

No taxes here state or sales, except property. Some towns do have a sales tax, and some towns don't even have property taxes.
When I lived in New Mexico EVERY penny that changed hands was taxed, it really didn't matter what it was for.

[Cedarman]

State doesn't collect sales tax, the vendor does.  In CT, RI, NY the sale of the service of sawing lumber for customers from their logs, is subject to sales tax.
https://forestryforum.com/board/index.php/topic,55938.msg809496.html#msg809496

It works the same here in NC where the burden of collecting sales tax falls on the vender.  However, I think the vender is compensated slightly.  If the sales tax is 6.75% the vender only has to send in 5.75% allowing them to keep 1% for their trouble.

In Indiana we get .73% of the sales tax collected as payment for our efforts.  If I collect $100.00 in sales tax, I get 73 cents. I would guess in NC it is the same, you get 1% of the sales tax not 1% of the sale.

[terrifictimbersllc]

Pretty sure NY is 5% of the collected sales tax, up to $200 maximum.   It's called a vendor collection credit.

[Percy]

In Indiana we get .73% of the sales tax collected as payment for our efforts.  If I collect $100.00 in sales tax, I get 73 cents. I would guess in NC it is the same, you get 1% of the sales tax not 1% of the sale.

Whatcha gonna do with it all?? :D:D

[Cedarman]

In Indiana we get .73% of the sales tax collected as payment for our efforts.  If I collect $100.00 in sales tax, I get 73 cents. I would guess in NC it is the same, you get 1% of the sales tax not 1% of the sale.

Whatcha gonna do with it all?? :D:D

Wait a couple months and buy a cup of coffee. :D :D
I might have to declare it as income and pay fed , state and local tax.  So might take 5 months to get my coffee