# Tax ? Minnesota



## PTTP08 (Dec 9, 2009)

I am new to the biz and I am a really small outfit but I seem to be getting bigger and I want to have my "ducks in a row"

should I be charging sales tax on my invoices? I read for snow removal is not taxable and lawn care is taxable. Is this true? 

also I am getting 1099ed at the end of the year on my commercial accounts so do I tax these invoices? Or am I paying the tax at the end of the year so to speak?

I think I am going to hit the books!

Thanks much!


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## PTTP08 (Dec 9, 2009)

I also am doing the right offs for gas and maintenance repair and all that jazz. I forgot to say this before.


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## PTTP08 (Dec 9, 2009)

After some extensive research on the MN.Tax web site we figured it out!! But the hard and annoying part was getting my quick books to stick on a dam invoice!! Ya gatta love uncle sam!!


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## lazyike (Dec 23, 2005)

Yep, very confusing when you are starting out. No sales tax on snow removal, but there is sales tax on lawn cutting, Tree trimming, shrub trimming, but if you leave the shrub trimmings it's not I think. But yea it gets confusing, also if you salt or sand that is taxable. Best thing you can do is call a tax preparer, they can help you usually for free. Good luck.


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## Mike_TT&L (Feb 21, 2009)

lazyike: Are you sure on the salting and sanding being taxable? I saw this post and brought it up in our office. Our office guru checked and can't find where it would be taxable. If you are sure these are taxable can you point me in the right direction to find out more information? Much thanks for any help/direction.

Mike @ TT&L


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## Camden (Mar 10, 2007)

You definitely don't have to pay tax on plowing but I'm not sure about de-icing. I haven't been but because it's such a small amount of my overall revenue I'm not too concerned about it.


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## Deershack (Feb 19, 2009)

Just as crazy is hauling black dirt and such. If you order it and I dump it in your drive, I have to charge you sales tax. However if I spread it, there is no tax. Since there is nothing said about how much needs to be spread, in theory, I can just pull the truck ahead for the last little bit or for that matter, get out and throw a couple of shovel fulls and I'm in the clear.


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## qualitycut (Jan 13, 2008)

There is no taxing on salt of deicing, heres a link my accountant gave me.

http://taxes.state.mn.us/sales/Documents/publications_fact_sheets_by_number_content_BAT_1100109.pdf


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## tuney443 (Jun 25, 2006)

Deershack;1234801 said:


> Just as crazy is hauling black dirt and such. If you order it and I dump it in your drive, I have to charge you sales tax. However if I spread it, there is no tax. Since there is nothing said about how much needs to be spread, in theory, I can just pull the truck ahead for the last little bit or for that matter, get out and throw a couple of shovel fulls and I'm in the clear.


You might want to check on that.The state of Mn. wants their cut,whether it comes from you,the contractor, or the vendor.The product is 100% taxable,the trucking of it I'm not sure in your state,In NY years ago there was a loophole regarding just that because trucking was non-taxable[now it is],so excavators would and could legally come up with all sorts of different creative ''bottom line figures'' on the invoice to lessen the sales tax collected.


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## Mike_TT&L (Feb 21, 2009)

Thanks QualityCut, that clears it up for sure.


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## Camden (Mar 10, 2007)

qualitycut;1235018 said:


> There is no taxing on salt of deicing, heres a link my accountant gave me.
> 
> http://taxes.state.mn.us/sales/Documents/publications_fact_sheets_by_number_content_BAT_1100109.pdf


I bookmarked that, thanks!


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## Deershack (Feb 19, 2009)

tuney443;1235066 said:


> You might want to check on that.The state of Mn. wants their cut,whether it comes from you,the contractor, or the vendor.The product is 100% taxable,the trucking of it I'm not sure in your state,In NY years ago there was a loophole regarding just that because trucking was non-taxable[now it is],so excavators would and could legally come up with all sorts of different creative ''bottom line figures'' on the invoice to lessen the sales tax collected.


You may be right. I am going by advice I received from the MN Revenue Dept. in a phone call asking if I should be charging sales tax. They told me the above. I pay the sales tax when I purchase at the pit and collect it from the customer. They apparently make a distinction between me selling a product (in this case black dirt) and providing a service, the spreading of the dirt.


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## lazyike (Dec 23, 2005)

qualitycut;1235018 said:


> There is no taxing on salt of deicing, heres a link my accountant gave me.
> 
> http://taxes.state.mn.us/sales/Documents/publications_fact_sheets_by_number_content_BAT_1100109.pdf


Now I have to check with my Tax person. I was told you had to charge tax on the material that you were applying but not the service. I guess with all the confusing wording and complex mumbojumbo your hosed with the IRS no matter what you do.:realmad:


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## Dr Who (Dec 16, 2010)

I know all this is state to state, but if you buy your salt and pay sales tax, I would think that you could not charge sales tax for it. it would be double taxed, unless you can tax for the spreading of the salt, not the salt it self.

Like I said, its differnet in every state, but here I buy salt, sand, or anything else for that matter and I pay the sales tax on it. I can not charge sales tax on it leagly, it would be double taxed. Now here Service is non-taxable, I would be very careful with this, you could end up wiht a lot of fines..

best thingto do is talk to a GOOD tax person, someone you trust...


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## qualitycut (Jan 13, 2008)

lazyike;1235508 said:


> Now I have to check with my Tax person. I was told you had to charge tax on the material that you were applying but not the service. I guess with all the confusing wording and complex mumbojumbo your hosed with the IRS no matter what you do.:realmad:


You are paying tax on the material when you buy it so they are already getting their cut.


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## tuney443 (Jun 25, 2006)

Deershack;1235493 said:


> You may be right. I am going by advice I received from the MN Revenue Dept. in a phone call asking if I should be charging sales tax. They told me the above. I pay the sales tax when I purchase at the pit and collect it from the customer. They apparently make a distinction between me selling a product (in this case black dirt) and providing a service, the spreading of the dirt.


Well that would be a double taxing of the same sale which isn't right.For instance: I have annual resale certificates filed with all the gravel banks/quarries I do biz with.I do not pay sales tax to them,the vendor for any load because I'm collecting it from my customer.


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## Mike_TT&L (Feb 21, 2009)

If salting a parking lot was taxable, you would then buy your salt as tax exempt and then charge customers with tax. being that it is not a taxable charge, you buy your salt with tax included and charge your customer appropriately to cover your tax paid which is "use tax" for the local where the work was done. Get into a community where tax rates are different (more) than state minimums, have fun...., get your accountant involved. You now owe that difference in that community that charges different tax rate for the use tax.

Tax is almost always due at some point, it is just how it is distributed at the final sales point end. Tax that the customer pays or a service that is nontaxable that has materials paid for with use tax.


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## qualitycut (Jan 13, 2008)

tuney443;1236096 said:


> Well that would be a double taxing of the same sale which isn't right.For instance: I have annual resale certificates filed with all the gravel banks/quarries I do biz with.I do not pay sales tax to them,the vendor for any load because I'm collecting it from my customer.


Just out of curiosity does that benefit you in any way? Reason I ask is seems like more work for you


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## lazyike (Dec 23, 2005)

Well then I guess the state owes me mony back then


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## Deershack (Feb 19, 2009)

Sounds like I didn't make myself clear. I buy the product from the pit and pay for it plus the tax. When I bill the customer, they pay the total I paid the pit. There is no double taxation since they are just covering my out of pocket. Since the tax has been paid, there is nothing to report to the State. It is no different then the customer going to the pit in person. I charge for my delivery of the product and that is not taxable.


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## qualitycut (Jan 13, 2008)

lazyike;1236216 said:


> Well then I guess the state owes me mony back then


Haha good luck. Try to collect the interest also lol.


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## Advantage (Nov 7, 2007)

Deershack;1236220 said:


> Sounds like I didn't make myself clear. I buy the product from the pit and pay for it plus the tax. When I bill the customer, they pay the total I paid the pit. There is no double taxation since they are just covering my out of pocket. Since the tax has been paid, there is nothing to report to the State. It is no different then the customer going to the pit in person. I charge for my delivery of the product and that is not taxable.


Why would you not add an up charge on the cost of the material?


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## Deershack (Feb 19, 2009)

An upcharge would require collecting the sales tax on the difference to stay legal. This way the only extra money in the transaction is my delivery charge. This way I have nothing to report to the State and no forms to fill out, with the exception of once a year telling them I have no sales tax receipts to report.


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## tuney443 (Jun 25, 2006)

qualitycut;1236194 said:


> Just out of curiosity does that benefit you in any way? Reason I ask is seems like more work for you


Benefits? Well,2 things.I just believe it looks more professional on the invoice not to show the customer what that 8 yd. load of mason sand cost me at the gravel bank.That is what you would have to write down + the sales tax that was already paid.Then, you would have to put down your trucking fee which is also taxable[I'm talking NY].To me,the customer isn't on a need to know basis regarding my costs and if I put a small markup on that sand plus the delivery charge and then add in the sales tax,all is good.IMHO,from a businessman's point of view,the client should see the tax on the invoice and pay it.No different than when you buy a TV,water heater,or new plow from a retail store.

Yes,it's the privilegeof doing biz--collecting sales tax for the state.It is a little work but not bad.Actually,NY has now a ''vendor collection credit'' of 5% which lets me take off $50 for every $1K I'm giving NY when I do my quarterly return.Seems fair enough.


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## tuney443 (Jun 25, 2006)

lazyike;1236216 said:


> Well then I guess the state owes me mony back then


There should be a credit part of your return you can fill out and just subtract that credit from what you collected and are reporting.Just have all your paperwork in order to back your play should you get audited someday.


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## lazyike (Dec 23, 2005)

tuney443;1236433 said:


> There should be a credit part of your return you can fill out and just subtract that credit from what you collected and are reporting.Just have all your paperwork in order to back your play should you get audited someday.


This monkey can only f$#% a football so many times.I am just going to give it all to my tax people, that's what they get paid for. If I have to deal with our big, fat, top heavy, liberal, tree kissing, government I will puke.


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## Deershack (Feb 19, 2009)

lazyike;1236488 said:


> This monkey can only f$#% a football so many times.I am just going to give it all to my tax people, that's what they get paid for. If I have to deal with our big, fat, top heavy, liberal, tree kissing, government I will puke.


Is that anyway to talk about our new Gov? After all he is fond of saying "To those whom much is given, much is expected" Don't know about you but I have never been "given" anything. I work damm hard for what I have and it's up to me to decide what I choose to give to others.


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## tuney443 (Jun 25, 2006)

lazyike;1236488 said:


> This monkey can only f$#% a football so many times.I am just going to give it all to my tax people, that's what they get paid for. If I have to deal with our big, fat, top heavy, liberal, tree kissing, government I will puke.


Don't really understand your gripe.If you think about it for a minute,sales tax is actually one of,if not the fairest taxes of them all.Not like income tax at all.Whatever you pay for that Boss plow,Mr. corporate America lawyer will pay the same sales tax,all in the same county of course.And once it's explained to you how to collect and report it,even your monkey can do it.There's no reason at all you have to ''give it all to my tax people.'' But,I digress,to each their own, it's your coin to piss it away if you wish.


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## lazyike (Dec 23, 2005)

My problem is that we are the ones responsible to collect and send in their tax. If I have a customer or customers that refuse to pay the sales tax, I am left holding the bag. In case of an audit do you think the IRS would say "oh dont worry about that tax if they refused to pay it"? Again why should I be doing their work and figure out their tax code and law that changes all the time. I know you will say that's part of doing business but why should it be? At least I am working instead of collecting state aid to support my smoking, drinking and lazy habit.


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## tuney443 (Jun 25, 2006)

lazyike;1236745 said:


> My problem is that we are the ones responsible to collect and send in their tax. If I have a customer or customers that refuse to pay the sales tax, I am left holding the bag. In case of an audit do you think the IRS would say "oh dont worry about that tax if they refused to pay it"? Again why should I be doing their work and figure out their tax code and law that changes all the time. I know you will say that's part of doing business but why should it be? At least I am working instead of collecting state aid to support my smoking, drinking and lazy habit.


Whether I give a verbal quote on the phone to Joe Homeowner or a written proposal to corporate America,SALES TAX gets mentioned.Sure,I get the griping once in a while ''there's tax on dirt?'' remarks.I just answer yes there is and I'm obligated to collect it.At that point,if there's further discussion,I will give the client the NYS sales tax phone # which is on my ''contacts'' on my cell.That usually ends it right there,they just believe me and they will pay it.Now,the deadbeat who won't pay it because you didn't tell him there's tax involved ? I would threaten him that you'll be dropping a dime on him to your sales tax dep't. and see what shakes out. It will probably work,but if it doesn't, you the contractor are responsible for paying it so suck it up and learn from your mistake.The IRS has nothing to do with sales tax.You're now mixing apples and oranges.


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## lazyike (Dec 23, 2005)

Your right must be my fault....


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