Retail Sales And The Law

DoubleDel

Suppose i install widgets and the gov. has a credit covering a portion of the cost of the widget but not the installation.

Being the opportunity optimist that i am, I figure why not mark up the cost of my widgets and install them for free, kind of like the big carpet guys/gals do.

Would there be anything to be worried about as far as the gov. credit is concerned? Would/could the gov. object? I'd hate to have a bunch of mad customers because Uncle Sam denied their tax credit.

If I buy my widgets for 5 dollars can i ethically/legally sell them for 600% markup even though my competitors sell them for five?

Would i need a tax license? Wouldn't I have to charge sales tax?

Anything else as far as licensing goes?

angus242

The whole thing sounds awfully shady. I'm sure you're not the first person to think of this "loophole". I bet the gubment got that covered somehow. Talk to your accountant and see if he is excited about your idea.

__________________
Angus
L+M+O+P=C
"Promise only what you can deliver. Then deliver more than you promise"

tommytwo

there's an older discussion about that here:
http://www.contractortalk.com/f16/ta...nvoices-57807/

Here too:http://www.contractortalk.com/f11/en...credits-54507/

rselectric1

Angus is right. If you think you are the first one that has thought of this, you are mistaken. The state will get you for sales tax too.
This site is full of hard working contractors who are into honest work for honest pay.
Scams like this and the people behind them give us all a reputation that we have to fight against daily to overcome.

__________________
220...221...whatever it takes!

DoubleDel

rseletric1, I've read the previous threads and nowhere can i find anyone discussing this exactly. Similar, but not.

If the gov. reimburses a portion of the materials only, and some contractors inflate the price of their actual costs to take advantage of the tax credit under the guise of " I'm allowed to mark up my materials, in fact according to some, ignorant if i don't.", Then when its time to do their taxes do they deduct the entire inflated amount as materials or only their actual costs?

And if only their actual costs, then do they charge/pay sales tax on the amount of the inflated materials. If not, why?

Im thinking retail to the end user (with all the bases covered), not contractor installed services. If I have a tax license and follow the proper procedure how can this be anymore shady than the guy that inflates his material costs to include oh/p, when the gov. said MATERIALS ONLY.

Anti-wingnut

And if an audit is done to one of your customers, someone in the gub may wonder why your widgets are 5x the cost of another widget, and especially wonder why your installation costs are zero. Sudenly your customers lose their credit, and you have RICO knocking at your door

rselectric1

I would check with your accountant on that. All the states are different.

I do see a potential image problem for you however. If your customers are privy to this way of doing things, they may view you as untrustworthy and take their business elsewhere.

__________________
220...221...whatever it takes!