How Do YOU Keep Track Of Sales Tax? - Business - Contractor Talk

How Do YOU Keep Track Of Sales Tax?

 
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Old 05-08-2019, 09:10 PM   #1
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How Do YOU Keep Track Of Sales Tax?


I just got my California seller's permit. Working as a landscaper, I generally give the customer a bid price that includes all materials and labor. Just spoke with the CFTDA (just filed my first return with them) and they said there are two ways I can account for my re-sold purchases:

1) Don't mark anything up, just charge the same price you paid for it, but if you do this you MUST include copies of the original receipts when you invoice your clients.

2) Mark up whatever you want but keep all the markups on a spreadsheet and be sure to record the proper sales tax for the proper county that you're in.

Geez, these seem both like a lot of extra steps. I don't know how legit this info is that one person at the department gave me, who kinda seemed like he didn't know for sure.

What do you all do? What's the easiest way to do this? If option 1, it seems like you can just put any markup as labor and include a line on the invoice that "all materials were resold at cost", or something. Does anyone actually send receipts with customer invoices? Seems like most contractors probably don't share the actual cost of things with customers. But option 2 sounds like a headache. Do you set aside the state's percentage AND the county percentage?

Thanks.
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Old 05-08-2019, 09:17 PM   #2
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Re: How Do YOU Keep Track Of Sales Tax?


Glad we don't have a sales tax and have to mess with it.

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Old 05-11-2019, 05:51 PM   #3
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Re: How Do YOU Keep Track Of Sales Tax?


Quickbooks should keep track, I would think. Talk to a CPA and see if they will set it up for you.
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Old 05-20-2019, 11:37 PM   #4
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Re: How Do YOU Keep Track Of Sales Tax?


Don't give them a material price in your contract. Don't mark up your material just give them a price for operations.

In other words

Decking x amount s.f. ***.xx
Railing lineal feet ***.xx
etc.





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Old 08-30-2019, 06:34 PM   #5
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Re: How Do YOU Keep Track Of Sales Tax?


What I see a lot of guys doing is just giving the contract price + sales tax. and then when they get paid, the entire amount goes into the checking account, which usually ends up getting spent.

What I have found to work, is take 30% of every check that comes in, goes into a separate business savings account, right off the top. This covers most of my tax liabilities.

Quickbooks on my phone doesnt do sales taxes - its extremely annoying.
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Old 08-30-2019, 08:53 PM   #6
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Re: How Do YOU Keep Track Of Sales Tax?


Capital Improvement doesn't require a sales tax around here for residential. If it gets attached to the house in any manor it's a capital improvement. If it's a money making place, condo, business, etc it's gets taxed. If it's a table or a chair or something that doesn't get attached to the house (when you move you can take it with you) it gets taxed.
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Old 08-30-2019, 09:46 PM   #7
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Re: How Do YOU Keep Track Of Sales Tax?


Don't go tax exempt.

Pay the sales tax when you buy materials.

There is no sales tax on service/labor in California.
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Old 08-30-2019, 09:59 PM   #8
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Re: How Do YOU Keep Track Of Sales Tax?


Quote:
Originally Posted by Seven-Delta-FortyOne View Post
Don't go tax exempt.



Pay the sales tax when you buy materials.



There is no sales tax on service/labor in California.


It really is that simple. I try not to include the tax man at the end of the year whenever I can. I have to file a use form but that's a one page nothing. Because I pay sales tax when I purchase the material and charge my customers a lump sum without breaking down materials.


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Old 08-30-2019, 10:42 PM   #9
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Re: How Do YOU Keep Track Of Sales Tax?


one of the first things my accountant told was to pay the sales tax on everything i bought.

saved a lot of grief later on...

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