# New Michigan Service Taxes



## brunosplace (Dec 30, 2004)

All of us here in Michigan have been hearing about the possibility of having to charge sales tax on services for awhile now. As part of the state budget settlement they are now requiring certain service businesses to collect the 6% sales tax. In todays Detroit Free Press was a list of taxed businesses. I see in the list that Commercial landscaping is listed, does that cover only landscaping on commercial properties, or does it mean any landscaping services performed by a contractor, such as snowplowing, lawn mowing, retaining walls, etc?

Anybody have a good interpretation of this yet?


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## Crash935 (Sep 3, 2003)

Yup, pretty much anything that falls under the landscape/landscape maintance area.


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## lawnmasters2006 (Sep 19, 2006)

stupid u ask me....gezz....wht else make us go broker than we are livin in this stats w her running it....


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## QuadPlower (Jan 4, 2007)

Does anyone have a link to the Detroit news article?

Is the tax going to be on just the labor? Just the profit? Will it be on the expenses like gas, materials? Will it be on the total bill?

Lets see. I already pay taxes on my employees income. I pay taxes on the profit, because it is my income. I pay taxes on the gas and/or materials when I buy it. Sounds to me like double dipping. 

Is she going to take away our requirement to pay taxes when we buy the gas and/or materials? Then have us pay taxes on the total bill?

We now have to raise our prices to cover the tax. Take the time to re-bill everyone. Take the time to keep track of all the money coming in. Then remember to send it to her probably every quarter.

How many commercial landscapers are not going to do this either because they don't know about it or refuse to. There are a bunch of laws that I didn't know about until reading trade mags, and being a member of Plowsite and Lawnsite. There are probably a bunch I still don't know about.

Is there going to be a minimum income level that won't have to pay it? Like the business tax she got rid of didn't effect me because I didn't make enough. I would hate to fudge my income taxes just to stay below a certian amount so I won't have to go through this hassel.


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## grandview (Oct 9, 2005)

Come over here 8.75% sales tax


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## Mark Oomkes (Dec 10, 2000)

Come on Quad, they've been double dipping for years. Just think about paying sales tax on a used vehicle. Someone paid when it was new, why a second, third or fourth time. How about corporate taxes. The corporation is taxed, the payroll is taxed. Investment dividends are taxed even though you bought them with income that was taxed. Interest income is taxed even though that is from income that was taxed. Need I go on?

So why shouldn't the bastards double dip on everything else that they can?

Just think what happens if we get a Dem as president? 

And you're right, a 6% tax doesn't cost the customer 6%, because we have all the additional overhead involved in charging it, recovering it, giving it to the state. 

Remind me, why did anybody vote for this idiot that is our 'governor'?


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## framer1901 (Dec 18, 2005)

Mark, the man that always knows the answers - we've been screamin busy and I haven't had the time to check:

I heard "landscaping" was taxable but lawn mowing wasn't. Does anyone have the offical take on this?/ Are we taxing landscaping services such as snowplowing, fertilization, bark etc but not taxing mowing????

It's more of a PITA than anything, add a new line item to the bill but fill out five or more tax forms - probably cost us what 200 to 400 per year, oh yea it's money I want to keep and the more I type - what about the freakin DOT numbers and that added cost for the plates>>>>>>>>>>>



Time to go home Jennnnnnyyyyyy


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## Mark Oomkes (Dec 10, 2000)

http://www.census.gov/naics/2007/def/NDEF561.HTM#N56173

I don't know how accurate this is, it came from another green site. It appears to make sense though.

Rumor has it that this whole deal may be unconstitutional as the Legislature bypassed the Headlee Amendment when they increased and levied new taxes without a vote of the citizens. Wait and see.

PS Who invited Jenny to MI anyways?


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## brunosplace (Dec 30, 2004)

So, right now it looks like the whole thing is about as clear as mud, time to call the accountants to get their interpretation on it.

Here is the article, business list is on right side of page:

http://www.freep.com/apps/pbcs.dll/article?AID=2007710020324


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## brunosplace (Dec 30, 2004)

Mark Oomkes;410083 said:


> http://www.census.gov/naics/2007/def/NDEF561.HTM#N56173
> 
> I don't know how accurate this is, it came from another green site. It appears to make sense though.
> 
> ...


Looks like the above is correct, as it is linked from the Michigan Dept of Treasury site here:

http://www.michigan.gov/taxes/0,1607,7-238-43529-177121--,00.html

So it looks like it covers everything that we do.


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## Mark Oomkes (Dec 10, 2000)

Gotta love it. The repubs are running a radio ad here in GR about how this is all the Dems fault. Frickin politicians, if a few of the repubs hadn't voted for it, we wouldn't have it.


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## Snowpower (Sep 2, 2007)

QuadPlower;409783 said:


> We now have to raise our prices to cover the tax. Take the time to re-bill everyone. Take the time to keep track of all the money coming in. Then remember to send it to her probably every quarter.
> 
> .


Try once a month.


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## jcesar (Sep 14, 2006)

The first is the actual bill. Look up what industry is being charged, and there is a NAICS number assigned. The sacond is the Version of the NAICS that they are using, which will have a corresponding number to define the industry.

http://www.legislature.mi.gov/documents/2007-2008/billenrolled/House/htm/2007-HNB-5198.htm

http://www.census.gov/epcd/naics02/naicod02.htm


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## bltp203 (Nov 5, 2006)

Ok, so now I am confused.

Plowing has NACIS #561790

Landscaping has NACIS #561730

So, the way I am reading it, is that plowing will not fall under the service tax. Am I off base here?


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## QuadPlower (Jan 4, 2007)

Seasonal property maintenance services (i.e., snow plowing in winter, landscaping 

Snow plowing services combined with landscaping services (i.e., seasonal property 

Snow plowing is a "Seasonal property maintenance service" so yea, its included.

Its my take that if you have a MI sales tax number we should be getting something in the mail about this. 

If you don't have a MI sales tax number you have to apply for one if you plow snow, trim shrubs, run a Fortune-telling services,Dating services, Balloon-o-gram services and about a 100 other things.

Along with our DOT # maybe we should have to post our MI sales tax number. Half kidding here, but it would make the non-insured, non-tax paying, lowballers easier to spot.


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## jcesar (Sep 14, 2006)

QuadPlower;410947 said:


> Seasonal property maintenance services (i.e., snow plowing in winter, landscaping
> 
> Snow plowing services combined with landscaping services (i.e., seasonal property
> 
> ...


I agree, I agree, I agree!!!


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## Mark Oomkes (Dec 10, 2000)

QuadPlower;410947 said:


> Along with our DOT # maybe we should have to post our MI sales tax number. Half kidding here, but it would make the non-insured, non-tax paying, lowballers easier to spot.


Good point, I believe I will start adding that to the list of things I include when sending proposals.


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## grandview (Oct 9, 2005)

Being from a heavy taxed state sometimes it gets hard following what other states do. It's like services are not taxed but labor is and this is and this isn't. It's simple here.

snowplowing 1,000.00
tax 8.75% = 87.50
total due 1087.50

plain and simple!payup


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## Billz (Jun 15, 2004)

so what will happen to the customers I already have signed on for this winter? Anything paid to me before Dec 1 is tax free, and anything they pay later is taxed?


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## Mark Oomkes (Dec 10, 2000)

Guess so. But who knows.

I'm curious if shoveling and salting are taxable. Under the landscaping, it has all the individual services, but only specifically lists snow plowing???????


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## lmarine (Aug 25, 2006)

screw gram let her get the money from the casinos and leave the working man alone all my cash now goes to the state or the insurance company just what we need anthor tax to keep track of how easy could one cheat this system who is keeping track ok i plowed one time this winter yeah it was slow(wink wink) just dose not seem like its going to work but we will deal with it, i think the consumer is going to get it in the end. looks like my accountant gets a raise again cheers!


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## QuadPlower (Jan 4, 2007)

It does say "Plowing" and not "Removal" but my guess would be on the total bill, no matter how it was broken down. 

I did not notice if Lawn Maintenance included mowing, weed wacking & blowing, but I would again guess it is on the total bill.


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## CNY Plow (Sep 12, 2007)

*you do not pay sales tax*

your customers pay sales tax on what you charge them.
you collect it for the state.
if you feel that you need to charge your customers more to cover the extra paperwork then add it on.


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## Billz (Jun 15, 2004)

that is not entirely true...if I plow $10,000 in December...I owe Lansing $600 on Jan1, even though I haven't collected it yet...right?


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## CNY Plow (Sep 12, 2007)

*it's a matter of bookkeeping*



Billz;412222 said:


> that is not entirely true...if I plow $10,000 in December...I owe Lansing $600 on Jan1, even though I haven't collected it yet...right?


if you're willing to pay tax on monies you haven't collected then do it.
I don't pay tax until i actually collect - up to that point it's just play money - if I can't spend it I ain't pain' for it.
Unlike the government I can't use make-believe-money and rack up a million dollar deficit and tell every one to...........
Until the money is in the bank it's just an IOU and you don't pay tax on IOU's.


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## Snoroller (Dec 9, 2006)

Today I spoke with Senator VanWorkam's Chief of Staff (who just so happens to own a lawn maintenance business) about all this as well as the Treasury Dept. As it sits right now, come December 1, all aspects of lawncare and landscaping as well as snowplowing will be taxed. If you mow, edge the driveway, or clean up the leaves, doesn't matter. Anything that has to do with a lawn, except irrigation, gets taxed. Landscaping and snowplowing however seems to be in limbo. The wording as of right now is that companies that do the lawn maintenance and obvious landscaping as the primary services will have to tax snow removal, salting, shoveling, as well as hardscapes (brick paver patios, driveways, sidewalks, retaining walls, and brick edging). The big kink in things is that if your company does only hardscapes or if you do something other than lawn care for your primary and snowplowing, you won't have to tax it. This is a serious kink for those of us that do the lawn work because we will have to charge the tax and those that offer the snowplowing or hardscapes but have a different primary service, they won't have to tax. Talk about an unlevel playing field. Makes it really hard to compete when we have a 6% higher bid from the start. So anyway, there are lawsuits that have been filed against the state claiming the tax is unlawful as well as many organizations such as the Michigan Nursery and Landscape Association, Michigan Chamber of Commerce, and the Michigan Small Business Association that have been hitting Lansing hard to get this thing repealed before it starts. I have been told that if it stays as is right now that they will describe in more detail who has to pay and it will be fair accross the board. Everyone that does a certain service will have to charge it. They are also looking at a way to track it kinda like the Department of Agriculture does with fertilizer applicators and such. If you are listed under snow removal, lawn maintenance, landscaping, etc. in the yellow pages then they will be looking at you to pay tax, or something to that effect. The guy I talked to says that's the good news. The bad news is that we may not find out until the last minute kinda like the budget. In other words, don't hold your breath. Last thing is he said that it will be a total ticket tax. Everything you invoice to the customer that has anything to do with these categories, add the 6%. Payments to the state will be either monthly, quarterly, semi-annual, or annual for the tax based on the amount of tax you collect. The Treasury has the schedule and chart on their website. Overall this sux. I think I heard we have the second highest paid legislature of all the states and yet they can't pay the bills, go figure.


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## Mark Oomkes (Dec 10, 2000)

Isn't our buddy Jerry one of the Republicans that voted for this tax? It was either that or the income tax increase. Either way, he ought to be recalled and out on his butt as soon as is legally possible. :realmad:


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## Snoroller (Dec 9, 2006)

Yup, you got it. I emailed his office the day I found out and they sent me back a generic cut and paste response that was identical to his press release. Lazy arse. It was kinda interesting hearing that his own chief of staff was getting screwed too.


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## CNY Plow (Sep 12, 2007)

I haven't read your MI law on this matter. 
In NY (like most other states) sales tax is not included in your bid, it is added on to the bill after all items are totaled.
Do not issue a comprehensive contract that includes lawn service and snow removal on the same contract. Issue two seperate contracts- one is taxed and the other is not.


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## Snoroller (Dec 9, 2006)

The new tax is for lawn service as well. There will be tax on everything lawn and lansdscape related as well as everything associated with plowing. Just wanted to also give an update that I will be at a meeting tomorrow with Granholm so hopefully I'll have more useful (but doubt it) info after I get back. Supposedly I'll be the first non politician/lobbyist person in the business to talk to her. Cross your fingers.


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## bribrius (May 5, 2007)

the states are transfering the tax burden from sales of goods to sales of services. as we become a more service driven economy they are adjusting to keep the revenue flow.
percentage wise, sales is dropping while services are increasing.
not that the reasoning matters much its still not enjoyable. especially knowing we will still be paying sales tax in most of our home states. guess foreign goods became too cheap and we didnt buy enough.

:crying:


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## Mark Oomkes (Dec 10, 2000)

Gee brib, thanks for adding to this thread too. Care to tell me how or where retail sales have dropped, creating less sales tax revenue? Since the reports just came out the the 'experts' are once again surprised because retail sales increased once again. 

Service taxes have about >< this much to do with declining revenue from products. It has to do with government not having a clue how to be efficient or figure out that they don't need to be involved in about 3/4's of what they are involved in. They don't know how to cut anything. Their definition of a cut in a program is instead of increasing the funding 5% this year, they're only going to increase it 3%. There's still an increase, but in their minds it's a cut. They are inefficient, bloated, and overstaffed. That is why they think they need to raise taxes. It's also because many of them are socialists.

And if they had half a clue, they'd be able to figure out that tax cuts work every time they're tried. If only they could control spending--on both sides of the aisle--we'd be doing better. I lay the blame on both sides, not just the Dems. It's just that the Dems are the ones who want to increase taxes to cover their spending.


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## bribrius (May 5, 2007)

Mark Oomkes;412993 said:


> Gee brib, thanks for adding to this thread too. Care to tell me how or where retail sales have dropped, creating less sales tax revenue? Since the reports just came out the the 'experts' are once again surprised because retail sales increased once again.
> 
> Service taxes have about >< this much to do with declining revenue from products. It has to do with government not having a clue how to be efficient or figure out that they don't need to be involved in about 3/4's of what they are involved in. They don't know how to cut anything. Their definition of a cut in a program is instead of increasing the funding 5% this year, they're only going to increase it 3%. There's still an increase, but in their minds it's a cut. They are inefficient, bloated, and overstaffed. That is why they think they need to raise taxes. It's also because many of them are socialists.
> 
> And if they had half a clue, they'd be able to figure out that tax cuts work every time they're tried. If only they could control spending--on both sides of the aisle--we'd be doing better. I lay the blame on both sides, not just the Dems. It's just that the Dems are the ones who want to increase taxes to cover their spending.


perhaps you would be inclined to research it yourself a little further and come to your own determination. perhaps you may agree.


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## Mark Oomkes (Dec 10, 2000)

Why don't you just save me the time and show me your proof?


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## bribrius (May 5, 2007)

Mark Oomkes;413006 said:


> Why don't you just save me the time and show me your proof?


State Notes
TOPICS OF LEGISLATIVE INTEREST
July/August 2004
Michigan's Changing Economy: The Impact on State Sales Tax Collections
By Gary S. Olson, Director
Much has been written in recent years regarding the changes that have been occurring in both the United States and Michigan economies. One of these changes involves the fact that personal consumption expenditures have been gradually shifting from the consumption of goods to the consumption of services. While Michigan consumers still purchase a large number of goods, there clearly is a trend toward the purchase of a greater level of services as a percentage of overall consumer expenditures. Purchases of such services as medical services, legal services, home services, and numerous other services have become an increasingly important component of the average consumer's overall expenditures.
This trend toward the purchase of services, at the expense of the purchase of goods by consumers, does have an impact on the collection of State tax revenue. This article examines this trend in the context of collections of the State sales and use tax. In Michigan, with few exceptions, the statutory base of the State sales and use tax includes the purchase of most goods, but excludes the purchase of most services. For example, if a Michigan consumer buys a lawnmower to mow his or her lawn, this purchase is taxable under the State sales tax. If the same Michigan consumer decides to have his or her lawn mowed by a private lawn care provider, the charge the consumer pays for this service is not subject to the State sales tax. This type of scenario affects the level of State sales and use tax collections.
In an effort to explore this shifting of consumer expenditures and its potential impact on State tax collections, the Senate Fiscal Agency has compared the taxable base of the State's sales and use taxes with the level of personal consumption in the State, measured by Michigan personal income, for the period fiscal year (FY) 1976-77 through FY 2002-03. Table 1 provides the data. During FY 1976-77, the base of the State's sales and use taxes equaled 49.8% of Michigan personal income. During FY 2002-03 the base of the State's sales and use taxes accounted for only 41.9% of Michigan personal income. As one can observe by carefully reviewing the data in Table 1, there has been a distinct downward trend in this percentage over the past 27 years. If the data are broken down into three periods of nine years each, the average for the FY 1976-77 through FY 1984-85 period equals 47.1%, the average for the FY 1985-86 through FY 1993-94 period equals 45.1%, and the average for the FY 1994-95 through FY 2002-03 period fell to 43.3%.
The overall trend toward the purchase of fewer goods and more services cannot entirely explain the decline in the taxable base of the sales and use tax. Other factors that have contributed to this decline include statutory exemptions to the base of the sales and use tax that have been enacted during this time period, and the trend toward consumers' purchasing goods by remote means, including catalog sales and internet sales. In most instances, these remote sales, while legally subject to collection under the State use tax, are made tax free by consumers. However, the trend toward the purchase of services by consumers is a significant part of this change.
This decline in the base of the sales and use tax as a percentage of Michigan personal income has had a significant impact on the level of sales and use tax collected by the State. For example, if during FY 2002-03, the base of the sales and use tax as a percentage of personal income had equaled the average level in the FY 1976-77 through FY 1984-85 period, total sales and use tax revenue in FY 2002-03 would have increased from the actual collection of $7.65 billion to the collection of $8.61 billion, an increase of $955 million or 12.5%.
Gary S. Olson, Director - Lansing, Michigan - (517) 373-2768 - TDD (517) 373-0543
www.senate.michigan.gov/sfa
State Notes
TOPICS OF LEGISLATIVE INTEREST
July/August 2004
As the Governor and the Legislature review State tax policy, it is important to understand that changes in economic behavior by consumers do have an impact on State tax collections. This point will have to be considered when any comprehensive review of the State tax structure is undertaken.
Table 1
Michigan's Sales and Use Tax Base
(millions of dollars)
Fiscal Year
Sales/Use Tax Base
Michigan Personal Income
Sales/Use Tax Base as % of Personal Income
1976-77
$35,175
$70,666
49.8%
1977-78
39,673
78,812
50.3%
1978-79
43,480
87,544
49.7%
1979-80
43,408
93,265
46.5%
1980-81
46,018
101,114
45.5%
1981-82
45,450
104,608
43.4%
1982-83
49,463
109,162
45.3%
1983-84
56,058
120,635
46.5%
1984-85
62,100
131,316
47.3%
1985-86
66,848
140,998
47.4%
1986-87
68,655
145,970
47.0%
1987-88
71,593
154,344
46.4%
1988-89
77,278
166,096
46.5%
1989-90
78,630
174,411
45.1%
1990-91
78,655
179,536
43.8%
1991-92
80,453
189,586
42.4%
1992-93
85,880
199,577
43.0%
1993-94
93,758
213,413
43.9%
1994-95
97,118
226,193
42.9%
1995-96
103,442
234,309
44.1%
1996-97
108,034
245,823
43.9%
1997-98
112,943
260,778
43.3%
1998-99
119,745
274,918
43.6%
1999-00
127,215
291,485
43.6%
2000-01
128,098
294,537
43.5%
2001-02
129,105
298,153
43.3%
2002-03
127,540
304,593
41.9%
Average Percentage FY 1976-77 through FY 1984-85
47.1%
Average Percentage FY 1985-86 through FY 1993-94
45.1%
Average Percentage FY 1994-95 through FY 2002-03
43.3%
Source: Michigan Senate Fiscal Agency and the U.S. Department of Commerce, Bureau of Economic Analysis
Gary S. Olson, Director - Lansing, Michigan - (517) 373-2768 - TDD (517) 373-0543
Page 2 of 2 www.senate.michigan.gov/sfa


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## Mark Oomkes (Dec 10, 2000)

OK, maybe I was a tad wrong, how about a story about how much state spending has increased in the same time frame? Bet that's gone up way more than the 4% they've 'lost'.

Maybe if they tried the same concept as everyone else when they don't have as much money, they could balance the budget without thinking that raising taxes solves the problem. Which it doesn't.


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## jcesar (Sep 14, 2006)

Mark Oomkes;413011 said:


> Maybe if they tried the same concept as everyone else when they don't have as much money, they could balance the budget without thinking that raising taxes solves the problem. Which it doesn't.


Sure it does. If they spend more money, and we pick up the tab, then they are in essense cutting the budget due to the fact that they dont have to pay it.

So therefore, lets spend more yet!!!

Even my kids can figure out that it wont work!!!!!

BTW,
My oldest is only 11 !!!!!!!


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## QuadPlower (Jan 4, 2007)

bribrius;413008 said:


> State Notes
> TOPICS OF LEGISLATIVE INTEREST
> July/August 2004
> Michigan's Changing Economy: The Impact on State Sales Tax Collections
> ...


To make sense of this all they have to do is take it ONE step further.

Guy doesn't buy a lawn mower for say $1000 to mow his grass. State looses $60. Instead he hires me and I charge him $20 a time to mow 30 times a year = $600. I take that $600 and buy gas, pay my labor, take the wife out to eat, pay my home taxes, buy a used truck, what ever. All of which is taxed. Not a lot of it is sitting in the bank. I also bought a $7,000 lawn mower the same year the Home Owner was thinking about it. The state got $420 in sales taxes.

Lets say his lawn mower last 10 years. That is $6000 he has paid me and I bought a new mower every 2.5 years so theirs another $1,680 in sales takes if the mower cost $7K every year.

They are getting more money by the Home Owner NOT buying the lawn mower and hireing me to do it. The same thing with plowing can be said, just the example above said lawn mower and mowing.

Like I said before, they are double dipping on taxes to make up for their bad spending habbits.


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## framer1901 (Dec 18, 2005)

Quad - I was sorta thinking the same thing...........

Michigan, probably has been hit with less income maybe due to the high rate of unemployement and the decreased wages - who knows - it just sucks..

Unless that is - if it's really true that non landscaping based companies don't have to charge the tax - wooppeee. But that's freakin wrong and I'm sure the loophole will be closed and those that don't collect it will still owe it.

I'm Construction based and will charge it and pay it, I can't afford to get bent two years down the road when they fix the loop hole.....


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## OBRYANMAINT (May 20, 2001)

in ohio we used to collect tax on just "summer maintenance stuff" not plowing for many years it was that way

a few years back plowing along with other items were added


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## lawnmasters2006 (Sep 19, 2006)

I THINK WE SHOULD CHARGE THE SATE OF MI. 20% BACK FOR ALL THE BALL JOINTS STRUTS ECT . THAT I HAVE TO REPLACE DUE TO AOUR CRAPPY ROADS WE HAVE...IN MY AREA THER GETING WOSRE AN WORSE...


WERS THE MONEY GOIN TO FIX OUR ROADS..????


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## Snoroller (Dec 9, 2006)

Just wanted to give an update to share the results of my visit with Granholm. No surprise but I got the blow off. She said the same stuff we've heard before about it being necessary, Republicans that voted against it suck, and the future looks great now. Yeah, ok. However, she did clarify that the tax will be across the board. Everyone that does the specific service, no matter what their primary business is, will have to tax that service. So, for the record, everybody that plows is going to be required to tax. She said that they are hoping to have the final list that is specific and exact ready by the end of the month. Snowplowing and lawn services according to her will for sure be on it. She says that all the attempts to repeal the tax or restrict it will fail so don't even think abou it. I'm not so sure of that but it looks for sure that we all need to be prepared to charge it December 1. The other thing is that it is going to be enforced to a degree. They are thinking about enforcing anyone that advertises in any yellow pages under the new taxed headings will be followed up with by the Treasury Department to verify compliance. So if you advertise under snow removal/snow plowing then they are going to verify your taxes to confirm you are taxing. So there it is. Sux but hopefully it can get dropped but I'm not holding my breath. Counting on politicians to take the tax away is no better than counting on them to not agree to it in the first place. Let it snow!!!!!!!


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## magnatrac (Dec 22, 2006)

So let me get this right. If I do job ,and pay tax on materials at my supplier. I have to charge the new service tax on my total bill, not just my labor? If this is true I am going to become a supplier first, then do the job!


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## bribrius (May 5, 2007)

magnatrac;414649 said:


> So let me get this right. If I do job ,and pay tax on materials at my supplier. I have to charge the new service tax on my total bill, not just my labor? If this is true I am going to become a supplier first, then do the job!


i dont get it.


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## QuadPlower (Jan 4, 2007)

magnatrac;414649 said:


> So let me get this right. If I do job ,and pay tax on materials at my supplier. I have to charge the new service tax on my total bill, not just my labor? If this is true I am going to become a supplier first, then do the job!


Yea, you pay the tax of 6% at the supplier on lets say $100 per ton. So you walk out with a bill of $106. The supplier sends the State $6.

You raise the cost of the salt by your materials mark up, lest say 30% (if you do that) you add on your labor cost to spread it, lets say $50 /ton.

Now the customers pill prior to December 31 is $187.80/ton. After Jan 1 the state wants 6% of the bill. Now the custmer is paying $199.07/ton. State gets another $11.27.

So for a ton of salt, at the above prices, the state gets $17.27.

Then you file your income taxes with the state. Your profit of $80.00/ton, less fuel, ins, etc. gets taxed at I think 3%, (correct me here if worng, my software has it in there, but couldn't find it) So there is another $2.40.

State gets $19.67 on a ton of salt. Thats 10% of the total bill goes to MI.


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## QuadPlower (Jan 4, 2007)

Here ara my new questions.

How many plowers are not listed in the yellow pages and therefore can't be found by the state?

How many plowers don't currently have a MI tax number and therefore won't be informed of this increase by mail with a new tax statement?

How customers are going to go with the Low Baller without the tax instead of someone who is paying the tax? Either because they are lower, or to stick it to the state.

How many of you are going to absorb the 6% and not increase your rate?

A $30 driveway turns into $31.80 driveway. Or does it turn from a, lets say $25.00 profit, into a $23.20 profit if you absorb the cost?

How many of you are sending out letters informing the customer that due to a tax increase by the state, the cost of your driveway will increase by $1.80?

How many of you plow non-profit business parking lots, churches, good will, etc.? I don't think you can tax them. I sub-contract sidewalk plowing for the local City and I don't have to charge them.


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## bribrius (May 5, 2007)

QuadPlower;414862 said:


> Here ara my new questions.
> 
> How many plowers are not listed in the yellow pages and therefore can't be found by the state?
> 
> ...


what they ought to do is take the money from the service tax and use it to start a health insurance account that self employed individuals can buy into for health insurance. get lots of kids off state medical cards, keep some people off welfare and unemloyment. save the hospitals from ending up with bills that go completley unpaid. if jobs cant be found help people to create their own. i know in maine they started dirigo which isnt cheap but does supply health insurance to business/self employed people at a lower than full cost rate. the program could be improved but its better than nothing. just a idea.


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## Billz (Jun 15, 2004)

I sent out notices that any money I receive for any services after Dec 1 will be taxed, so to avoid it this year, pay early. I am already getting checks in...that is still legal, right?


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## framer1901 (Dec 18, 2005)

Billz - I asked that question of the accountant, they don't have a straight across the board answer yet but they said yes you can do that, as far as they knew. The disadvantage of doing that is you have to claim the income this year (cash basis accounting) .

We do a bit of HUD work and was wondering how that works with taxes??

As for buying salt and paying sales tax?? I coulda swore that I've always been asked if I had to pay the tax, I'm in construction and pay sales tax on all materials, I've always paid it. That's another good question for the bean counters, are we paying sales tax on material? That'd be double taxation, so my inital thought is no we won't pay it or we would deduct it somehow tax wise.


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## bribrius (May 5, 2007)

framer1901;417249 said:


> Billz - I asked that question of the accountant, they don't have a straight across the board answer yet but they said yes you can do that, as far as they knew. The disadvantage of doing that is you have to claim the income this year (cash basis accounting) .
> 
> We do a bit of HUD work and was wondering how that works with taxes??
> 
> As for buying salt and paying sales tax?? I coulda swore that I've always been asked if I had to pay the tax, I'm in construction and pay sales tax on all materials, I've always paid it. That's another good question for the bean counters, are we paying sales tax on material? That'd be double taxation, so my inital thought is no we won't pay it or we would deduct it somehow tax wise.


lets say you pre pay your cell phone bill. then they come out with a new fcc tax after that. does that mean you dont have to pay the fcc tax because its prepaid during that period? no. you still have to pay the tax because the service wasnt provided until that period. just my take on it. im not a lawyer.


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## Mark Oomkes (Dec 10, 2000)

framer1901;417249 said:


> As for buying salt and paying sales tax?? I coulda swore that I've always been asked if I had to pay the tax, I'm in construction and pay sales tax on all materials, I've always paid it. That's another good question for the bean counters, are we paying sales tax on material? *That'd be double taxation*, so my inital thought is no we won't pay it or we would deduct it somehow tax wise.


Ya mean like they collect sales tax every time a vehicle is sold and resold? Or how about your corporate income being taxed and then your salary from the corporation. :realmad: :realmad: :realmad: :realmad:

I wouldn't put it past the ripoff artists AKA our elected officials, but it seems to me that this won't happen.


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## Snowpower (Sep 2, 2007)

I just heard today that there is a 20 day hold on this deal, and it can not start now until the 21st of December. And, that the lawmakers are really taking a second look at this thing so hold on to your tax forms fellas.


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## Snowpower (Sep 2, 2007)

Sounds like the service tax is dead. The house voted it down today and the senate needs to vote still is what I hear but they say its dead.

But. They now want to raise the business tax.

Someones gonna pay them 750 million a year. Who's it gonna be.


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## Mark Oomkes (Dec 10, 2000)

Snowpower;426995 said:


> Sounds like the service tax is dead. The house voted it down today and the senate needs to vote still is what I hear but they say its dead.
> 
> But. They now want to raise the business tax.
> 
> Someones gonna pay them 750 million a year. Who's it gonna be.


Granmole needs to sign the repeal before it's gone, unless they can override a veto. A replacement will probably be in the form of a surcharge on the new MBT which replaced the stupid SBT, so we're probably back to where we started. At least we wouldn't have to collect sales tax.

Also, from what I am hearing and reading, the only time snow removal would be taxed is when it is part of a seasonal maintenance contract. So if you have separate contracts for landscape management and snow management, you don't need to collect it. This came from the MNLA and if I can sort of comprehend the Dept of Treasury analysis.

Which once again begs the question to be asked, how in crap's name could they estimate revenue when they don't know what was going to be taxable ahead of time? :realmad: :realmad: :realmad: :realmad:


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## jcesar (Sep 14, 2006)

so as of right now, do we have to collect the tax, or not? I am confused in this whole stupid thing!!!!!!


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## brunosplace (Dec 30, 2004)

Bump back to the top, anybody have any updated info yet?, Looking at this: http://www.michigan.gov/documents/taxes/SubjectIndex_214564_7.pdf pages 16 & 17, it looks like as long as snow and ice management isn't combined with landscape services, there shouldn't be a tax on it.

Salting parking lots, NOT combined with any other service: NAICS code 561790: Exempt
Snow plowing services (dirveways and parking lots) NOT combined with any other service: NAICS code 561790: Exempt
Snow plowing services combined with landscaping services (ie:, seasonal property) : NAICS code 561730 : Taxable

Since salting and plowing have the same NAICS code I would think it doesn't count as a combined service.
Any one have some input on this?

Just found this: http://www.michigan.gov/taxes/0,1607,7-238-43519_47834_48232-179448--,00.html so it looks like my interpretation of it is correct. No landscape work = No tax.


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## Runner (Jul 21, 2000)

Ok guys, I didn't even realize this thread was even on here, or I would have been here earlier to help clear some of this up for you. On Nov. 5, we held a rally at the capital in Lansing and had a great turnout of literally hundreds of landscape companies and owners there. We took up the whole entire 4 block area around the capital, and took up both sides of the streets in parking using every meter and not allowing anyone else to park. These were all paid ahead of time and reserved for us. It was a show of force representing the green industry. This was by the MNLA and some 40 something other groups that have made up a coalition played some parts in it as well. This coalition is headed by L.Brooks Patterson who is out of Oakland County. We were separated into small groups (of about 4) and spent the afternoon going around all the representatives and legislatures offices and explaining who we are and how this tax would adversely affect us. Many were very understanding, and explained just why they had to vote for this - even though many didn't want to. This was just to sort of put faces to our cause, and explain some of our points. Many, didn't even THINK about some of the stuff we told them (like illegit companies taking more work from us income tax paying comanies). It was shortly after this rally, that the suspension was put on. Then, we got the news...as long as some other income was put on the table for Jennifer, she is not against it...she just wanted to fill the gap in her budget. Well,...a 1% increase in sales tax would have MORE than did this, but that is not what they shot for. They have now proposed a business tax that would affect medium sized businesses of 18 million dollars or more annual income. Well, many of these businesses, including our auto manufacturers, are all for it. Why? Because it also puts a cap on their allowed taxable income...so THEY come out on the winning end, also. Granholm is for it, and everyone has agreed. They just have to vote on it now, but there is still some disagreement on whether this should be temporary or permanent. Other than that, most everyone is in favor of this. The service tax is not dead all the way yet, but it is on it's way out. We are currently circulating petitions and are continuing to, even though we are rather sure it may be out. We need 300,000 signatures to disable Granholm from vetoing any repeal. this would NOT be that hard to get if everyone pitched in and got their customers signatures. 
Of course, this doen't just affect our customers, it affects EVERYONE...not just in paying a service tax, either. You can rest assured that EVERY cost of every product wil be affected, because even these companies like let's take Kelloggs for instance. They will have to pay taxes on services for their facility - maintenance, cleaning, computer repair, etc.. Well, these costs are going to be conveyed down the line. The end user will pay. This is just one example. This is excluding the trucking companies, etc..Anyway, you are encouraged to join us and be active in this cause. The site for this is http://www.axthetax.com.


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## Mark Oomkes (Dec 10, 2000)

Should've told the legislators that 'had' to vote for it that their constituents are just going to 'have' to vote their worthless butts out of office because of their inability to do their jobs, shortsightedness, and being idiots in general. They didn't have to vote for it, their just doing a CYA. 

Worthless idiots. :realmad: :realmad:


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## framer1901 (Dec 18, 2005)

What's everyone doing for November billing?? 

IF they don't repeal the tax, I'd assume we're supposed to collect it and pay it. 

We do everything monthly billing, so instead of sending bills out Monday Am, I was going to wait till Friday. The plan was to add a line item for the tax and attach a letter explaining how the tax may be up in the air and that a refund/credit would happen if the tax is repealed and that I'd followup with them during Decembers billing...

You landscapers with the huge fall cleanup bills gotta be in a bind. Any payment received after the 1st should be taxed, or just change the date received I suppose.


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## Mark Oomkes (Dec 10, 2000)

Framer, I would guess that work performed in Nov. is not taxable. Shouldn't be anyways. 

As for Dec, who knows, jackasses took 9 months to screw it up, take 'em that long to unscrew it. 

I'm going to send out bills before Dec 1, if I have to tax it later if they don't repeal it, so be it.


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## Snowpower (Sep 2, 2007)

As of right now my understanding is that there is a 20 day reprieve on the tax. You dont have to start collecting it until December 20th.

I do not have any links or confirmation but my accountant claimks the same thing.


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## Mark Oomkes (Dec 10, 2000)

Snowpower;440849 said:


> As of right now my understanding is that there is a 20 day reprieve on the tax. You dont have to start collecting it until December 20th.
> 
> I do not have any links or confirmation but my accountant claimks the same thing.


Well, well, well. Didn't even try to be right about it and I was. Stupid, moronic, idiots that are in our state gov't are killing us.

Went back to work for 2 whole days and couldn't agree on the repeal and the surcharge on the MBT so we still have the service tax. And our lovely legislature has an approval rating of something like 17% right now and Grandmole is at 34%.

We're being taxed and 'led' (using that term very, very loosely) by incompetent idiots.


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## Snowpower (Sep 2, 2007)

So do we charge it or not.

Jesus Christ.


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## Mark Oomkes (Dec 10, 2000)

Snowpower;441249 said:


> Jesus Christ.


At this point in time, I think He's the only one that knows. :realmad: :realmad: :realmad: :realmad:


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## framer1901 (Dec 18, 2005)

Mark - I'd suggest De Caf with cream only till they're all voted out 

I just amazes me at what happens in Lansing....


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## brunosplace (Dec 30, 2004)

*It's repealed!!*

News story from the Detroit Free Press. http://www.freep.com/apps/pbcs.dll/article?AID=/20071201/NEWS05/712010367


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## RYDER (Sep 19, 2005)

While I was out plowing today my wife was watching the news and she said the MICHIGAN SERVICE TAXES ARE DEAD. So you do not have to deal with it. But we do not know what thay are putting in its place.


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## Runner (Jul 21, 2000)

What they are putting in it's place is a 26% surcharge added the the SBT (small business tax).


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## toyman (Dec 4, 2007)

OK going back to the first page someone said something about DOT #. You should not have to have DOT# if you stay in the state. Am I missing something. 

Toyman


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## Eclipse (Dec 9, 2004)

toyman;445913 said:


> OK going back to the first page someone said something about DOT #. You should not have to have DOT# if you stay in the state. Am I missing something.
> 
> Toyman


In the state of Michigan you do need a DOT# even if you do not leave the state. They are free and not difficult to get.


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## Leisure Time LC (Jul 1, 2007)

I got my DOT number in the mail today. The letter that was with it states not to put the numbers on my trucks. Is this right??


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## toyman (Dec 4, 2007)

Is this a fairly new law, I've had a CDL for 20 years and have never had to have a DOT# on a truck unless it crossed state lines. I worked as an on site mechanic and it wasn't required until we took on a couple of accounts in Indiana and Ohio, until then we never had to have numbers even on file. This was back 10 years ago. 

I am asking so many questions due to the fact that I just bought an excavating company, the only thing that has been required on that truck is the name of the company. 

Toyman


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## Eclipse (Dec 9, 2004)

toyman;446112 said:


> Is this a fairly new law


IIRC it started in 2006 but has not been enforced much up to this point. From what I understand they are going to enforce it more in 2008.


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## Runner (Jul 21, 2000)

Yes. We are required to have them - even for intrastate travel. We are required to have the numbers for all existing trucks by Jan 1, 2008, and we will be required to have them all displayed by Dec. 31, 2009.


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## ServiceOnSite (Nov 23, 2006)

wow after reading much of this i have to remind myself that not every state rapes you as bad as ny does. NY DOT dont even get me started. tax hahahahaha everything here gets it @ the rate of 8.75:realmad::realmad:


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## turbo5560 (Apr 6, 2007)

Eclipse;445925 said:


> In the state of Michigan you do need a DOT# even if you do not leave the state. They are free and not difficult to get.


what was the website for the DOT # ?


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## Runner (Jul 21, 2000)

http://www.fmcsa.dot.gov/


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