i work in pa.he is charging tax on labor and materialsI'd have a few questions (and tax laws are particular to the state where the work is being done). Is he invoicing for tax on labor, material or both. Is he itemizing the cost of materials and invoicing for a reimbursement on the tax he paid on those materials?
Check with your state department of revenue to see if labor and material are taxable, and also see if the sub has the appropriate tax certificate.paying tax on materials is one thing....he is taxing me on labor and material
Why pay tax on physical service? Not required in my state. Just on products installed, my friend.i'm a GC and i just got a bill for rough in work by a plumber.
we agreed time and material.well he is trying to charge me tax.i never payed additional tax.i never deal with t&m so i'm asking what you guy's think.
i did not know that about not needing a 1099 if he is incorporatedRay -
I work in PA. The law can be interpreted a couple of ways. If it is repair work, he can charge tax (he almost has to because he will be taxed for it at the end of year) because it can be accounted for in a different way depending on how he does his taxes.
However, if this is a rough-in by a plumbing contractor, he cannot charge tax on labor.
He can on materials, but he has to show you that he is simply passing the sales tax on - for example, T&M billing, labor is $100.00 and materials (that he purchased) were $100.00 plus $6.00 for tax (total of $106.00). He cannot tax you on top of the $106.00.
I would request one of his material invoices to see if he is merely passing the tax on via an itemized value on an invoice, or if he is in fact purchasing materials and paying tax on them, then charging a sales tax on top of that - illegal - can only be taxed once.
Also, someone on here mentioned a 1099. If he is Incorporated, no 1099, but if he is a sole proprietor or LLC, must receive a 1099 after $600.00.