Other Penna. Contractors, I Need Your Feedback Here Please...

Ranger1

One quick question for contractors here in PA. I recently started my own business, mainly specializing in window and door installs, I've been running a shop for other company for 13 years and decided to go on my own as of recent. I have a friend who is an auditor for the state, he is telling me I need to get a sales tax license. I explained to him that i am not a retailer, just an installer. I asked an accountant and did not get a straight answer from him. CAN ANYONE GIVE ME A "YES" OR "NO" ANSWER PLEASE? I was looking on the PA. I.R.S. website and it looks like i do not need a sales tax license. I think it is because I am not re selling the item, I am installing it. I pay the tax on my materials, therefore I do not tax the customer. I don't want to sound nieve but i guess I am to ask this question. DONT BREAK MY B*LLS FOR ASKING THIS PLEASE

Wood_slinger

I don't know about Penna, but in WV and GA, the state now collects sales tax on services that are not considered a "capital improvement". I.E., storm door install is taxed, a deck would not be. There are different definitions of capital improvements so it is best to check with your state tax agency, or revenue service, etc. In WV there is not a separate sales tax license, but the state did send me a nice booklet of forms due each quarter for my income and sales tax burden.

Hope this helps.

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Bryan

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Man's actions are the picture book of his creeds. ~ Ralph Waldo Emerson

ihms683

do not need sales tax number in pa i been in the handy man buisness for 26 yrs you are not selling any thing that requires a tax number but i pay my sales tax as i go if your tax person says that you better get a sales tax number i would get a better tax person a tax number recorded when you register with state or s,s number with your buisness as well as a number for worker coposation number if you call our state small buisness assoiasationn at the state they will give you better advice or the build assoation in hbg

ABLE1

It seem that this is always a question that will get many different answers. I am a contractor in Pa. as well. I HAVE A PA TAX ID NUMBER.

I have to report monthly or quarterly sales and how much tax I charge for some items or services that require that the customer to pay the 6%.

I pay a "Use Tax" 6% on most purchases that I make. Some services that I do are NOT Taxable to the Customer but the tax amount is built into the final cost.

I have tax exemption certificates with most vendors that I purchase equipment and supplies.


The wonderful commonwealth of Pennsylvania and its tax laws are rather screwed up to say the least. Ask your attorney or accountant when you get you business license as to the proper stuff to conduct a proper business.

Trivia Question:

You walk into a WAWA, Turkey Hill, Sheetz, or whatever convenience store in Pa.
You place on the counter a bottle of Iced Tea and bottle of Lemonade.

Do you pay sales tax on both, the tea, the lemonade or neither???? The answer later.


Now if the work you are doing is paid "under the table" then that is a different matter.

Good luck on your new business.

Les

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ABLE1

ihms683

i agee you need a tax number or your s,s number but not asales tax number unless you are selling merchandice two differnt numbers ifile quarterly also

Thag

I'm in Pittsburgh and have no tax ID number. Talked with my accountant when I started my business and the answer is no. He stated that I am "not selling anything, just providing a service."

nywoodwizard

On your own? you sure he didn't mean employer tax id number ?

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Learning without thought is labor lost; thought without learning is perilous.

Thag

If this were the case, SS# would be his employer tax id number. Or am I wrong?

Wood_slinger

Again, I'm not from PA so you will need to verify this, but I just found the following for you..


10. CONSTRUCTION CONTRACTS

(61 Pa Code §31.11 –

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Bryan

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Man's actions are the picture book of his creeds. ~ Ralph Waldo Emerson

ABLE1

You are correct. It is my understanding that if the (something) is attached to real estate then the project is not taxable to the customer. However, when said contractor purchases the (something) he/she must either pay the 6% sales tax at time of purchase or with the use of an exemption form submit the 6% to the state as a "Use Tax" on the Quarterly Tax Payment.

The 6% is not to be seen by the customer as a line item but will be included in the final contractual cost.

Some of items that I deal with are taxable on the full install to the customer such as Telephone Systems, Network Hardware and such. These are "not attached to real estate."

This is how I have been dealing with it for 19 years. It seems to work.

As for Ranger1, your exact circumstances may be different. Get the right advice and set up your systems. Be sure to make room for adjustments as needed. Again good luck.

Les

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ABLE1

Royal-T

I only have a F.E.I. (Federal employer identification number) I have never heard of the sales tax thing except when claiming reciepts. I have been doing this for quite a few years and have never heard of such a thing. Good Luck with the business

3-D Mason

In certain circumstances the to are interchangable but not always when a GC asks for my FEI, if I'm not in the office I will sometimes give my SS for use on a 1099, I should mention my business is a sole proprietership, but when I pay my quarterly taxes for my employees I must use my FEI
as far as sales tax as a mason I am providing a service not selling a product, but strangely a few landscapers I know must charge sales tax???I'm not sure what the difference is, perhaps they are concidered more like providing maintenence then a service, of course I'm not an accountant this is just what Ive been told.

TimNJ

The suspense is killing me.

ABLE1

Ok, I was hoping that some one would contribute and take a shot at an answer. But since you are on your death bed at this time I will give you the answer.

The answer is that the Lemonade is taxable and the Iced Tea is not.

There now do you feel better................................

Oh but wait just a minute!!!!! That brings up another question.



Why is the Iced Tea not taxable???? Hmmmmmmmmmmm............



Now that is another question that awaits an answer..........................
My lips are sealed.


First one with the right answer gets a: 'attaboy'

Answers Please!!!!


Les

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ABLE1

Thag

If the drink contain 25% or less of real fruit juice then the drink is taxable.

ABLE1

You are correct but that is only for fruit juices. Iced Tea, the last I checked is not a fruit juice. Sorry no 'attaboy'.

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ABLE1

Thag

If the juices contain at least 25% real fruit juice, their purchase price is not subject to sales tax. The sales price of bottled water, iced tea, any size milk, frozen foods, baked goods, mustard and salad dressings is not subject to sales tax.

ABLE1

Still no 'attaboy'

Maybe this will help.

http://www.revenue.state.pa.us/reven...TION_ID=208953


Doesn't answer the question as yet but if you look down the page you will see that all Tea is Non-Taxable.

WHY????

I will wait.

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ABLE1

Thag

How long are you gonna wait, cause you have everybody in the house trying to figure it out.

ABLE1

Well if everybody in your house is working on this I would hope that other households will be thinking as well. Surely somebody should know the answer or know how to find it.

At the very least make a guess. Who knows you might just get lucky and get it right.

I reveil the answer in a little while, I have a hard time keeping a secret.

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ABLE1