# Ohio considers collecting sales tax on SNOW Services



## Lawn Lad (Feb 4, 2002)

House Bill 95 proposes adding snow plowing services to the list of services where sales tax would be collected. This is a bad idea and needs to be stopped in its tracks now.

Because snow plowing revenue comes from an irregular and unpredictable source (weather), revenue will be unpredictable. As well, as a smaller cottage industry and unregulated, operators who often just strap a plow on their trucks for a few extra dollars are difficult to track down. Such independent operators would be difficult to locate in order to enforce a snow removal tax.

If you live in Ohio please contact either SIMA or the ONLA (Ohio Nusery Landscape Association) to get more information on how you can contact your state legislators to voice your opinion on how sales tax on snow services is a bad idea.

SIMA: (814) 835-3577 (www.sima.org)
ONLA: (800) 825-5062 (www.onla.org)


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## Chuck Smith (Dec 30, 1999)

Snowplowing is taxable in NJ (and other States I am sure), and has been for a long time. I agree, it sucks, but it is the law. No way to stop it here now. Best of luck to you boys in Ohio. :waving: 

I'm curious as to why weather being unpredictable is a problem when it comes to sales tax? Sales in general are unpredictable (somewhat) too, no?

~Chuck


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## Ohiosnow (Sep 20, 2001)

*Lawn Lad*

One good winter in the last 7 yrs. & some state legislator wants to see if they can get some extra $$  so they can pi$$ it away on some porkbarrel projects :realmad: Just what we need more paper work


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## Snow Biz Inc. (Dec 10, 2002)

Lawn Lad,
Got the same fax today as you, we all need to write our State Senators and Reps. Customers are not going to be too happy having to pay more for any reason

Tom Beyer


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## Lawn Lad (Feb 4, 2002)

Chuck... in answer to why the unpredictable nature of snow fall makes for a poor revenue stream - I was paraphrasing a letter faxed out by SIMA and I believe ONLA. But I would answer it this way because I believe that snow services make for unpredictable revenue. 

Since revenue is generally tied to work being performed and work is based on quantity and frequency of snow fall, the volume of snow greatly affects the revenue by which sales tax is calculated. Once the budget makers begin counting on or betting on sales tax generated by snow fall they will be making bets as to how much snow fall will occur. What happens in a short fall snow year? What happens if for five years straight snow fall is below average? We know what will happen. There will be a budget shortfall since they don't understand or care to understand the nature of snow fall. 

I also think the tax unfairly penalizes businesses for operating a more snowy environment. The northern half of the state will paying a larger portion of any tax dollars collected than the southern half of the state. Will the northern half of the state benefit proportionately when tax dollars are budgeted? One could argue that we already do as a result of increased services when snow falls the state has to pay out $$ for trucks, drivers, salt and additional repairs to roads in those areas that get more snow. But I wonder how the dollars really balance out. And I don't hear this as a reason or argument for adding the tax. It's simply a money grab.


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## Lawn Lad (Feb 4, 2002)

For those of you in Ohio.... attached is a letter addressed to each of the senators on the finance committee and the leadership of the senate. If you want to use this letter you simply need to insert your name and position on each page and print the letter off on your letter head.


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## Chuck Smith (Dec 30, 1999)

Ok, that explains why it would be a problem counting on sales tax revenue. I thought it would somehow be harder for you as a business to manage it because it is unpredictable revenue. Your explaination makes perfect sense, I was not thinking of it that way.

~Chuck

EDIT: Here in NJ, Sales & Use Tax is 6%. What is the rate in Ohio? Just curious.


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## Lawn Lad (Feb 4, 2002)

Depends on the county. Cuyahoga is 7%. I think it is as low as 5.25 state sales tax and then each county can add to it for their tax and spend plans.


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## CT18fireman (Nov 30, 2000)

I don't see what the big deal is. I tax my customers (as do all contractors here) and pass the tax onto the state. When I go to pay income tax my sales payments go with my receipts to my accountant. You are not fotting the bill and if all contractors face the same tax then the field is still level.


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## wxmn6 (May 23, 2001)

I don't think this is a real big deal as you may thought. Here in NYS, if you have DBA, you need to collect sales tax. If not, you don't have to collect sales tax (you can't, it is illegal). I explained to all of my customers and they all understood that I charge sales tax. You either have to file quarterly or annually, depending on your business income. Nope, I don't like doing paperwork, but it is part of doing busiess. Just have to live with it.


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## Lawn Lad (Feb 4, 2002)

It's not that we pay sales tax out of our pockets perse. Ultimately we do, but that's another point. 

First and foremost raising taxes is not the solution to state budgetary problems. What do we do as business owners when our revenue is down as a result of a sluggish economy or other factors? You cut expenses until you can increase revenues through increased efficiency or growth. The politicians don't see cutting costs as an option - they only say raising taxes as the solution since they don't want to slice programs and pork that bring them votes. Personally, I'm opposed to any more taxes than we already have to pay. 

Second, the collection of sales tax from "independent" snow plow businesses will be difficult and sporadic. Therefore the additional overhead from paper pushing falls on the responsible, established contractor which does not represent the industry as a whole. Further, the 7% or so automatic increase in cost to the customer might encourage them to seek snow plow operators who fly under the radar scope to avoid paying taxes. These are the same contractors who likely don't carry liability insurance and workers' comp, etc. Those who hire legitimate contractors (by choice or not) will be those that must pay the tax. The tax will not be evenly distributed as a result. 

Third, collecting sales tax from a business that is dependent on the irregular snow fall does not make fiscal sense. The sales tax will be an inconsistent revenue source for the government. The very lack of predictability makes it a poor choice to tax.

Lastly, ultimately the consumer pays the bill. As a consumer I do not want to pay more for goods and services because the state has increased taxes. It does not directly come out of my pocket as a contractor when I collect the sales tax and pass it on to the Governor. Rather, I pay it when businesses must increase their prices to cover the increased costs as a result of the taxes. 

I find it disheartening that some would use the justification of "I have to collect sales tax, why not you?". Just because some states have already passed laws allowing it does not make it right or just. 

Unfortunetly Ohio carries the not so distinct honor of having one of the highest tax rates in the country while ranking at the bottom of the list when it comes to growth and development. What the folks in Columbus and other state captials fail to understand is that no state, country or government entity can tax it citizens into prosperity. 

At what point in time do we as individuals stand up and say enough is enough. Tax amnesty day is nearly around the corner. On the average, each American works 5 months of each year to pay their "fair" share of taxes. Until this point in time we have been working to pay taxes. Come June you will be working for yourself. I simply am tired of having to earn $1.50 to spend $1.00 on something. When does it end? It won't unless as individuals we send the message to our elected officials that increasing taxes is not the solution to the current problems.


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## Pelican (Nov 16, 2001)

Stephen, you've oversimplified your statement a bit. Those who perform a taxable service and do not collect sales tax are in violation of the law. That's the trouble with the system, those who abide by the law have to do all the bookkeeping involved with the sales tax collection while those who do not escape the inconvenience. Who do you think the Department of Taxation is going to audit? Not the guy they know nothing about!

In my County the rate is 7.25%, soon to increase to 8.5%. I'm required to make quarterly statements which take about 6 hours to complete, and require logging my receipts for the deductions and keeping them on file, all with no compensation.

Add to this the hassle of collecting tax from those who feel they do not need to pay it, it's just a plain nuisance. Again, with no compensation and you are acting as an agent of the State.

Best of luck to you Ohio guys fighting this.

This Bill wouldn't happen to be sponsored by a Democrat?


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## wxmn6 (May 23, 2001)

Pelican, here in NYS, if you do not have DBA (no offical business name), you are not required to collect sales tax. Yep, that is correct, no need to collect sales tax. You MUST collect sales tax if you have DBA. Alot of residential snowplowers here are just plowing for extra cash, they don't collect sales tax, and don't always report on their income tax. They are supposed to report on their income, but are not required to collect sales tax. They even cannot collect sales tax at all or it would be illegal (such as collecting "sales tax" money as extra profit). But once again, if you have DBA, you MUST collect sales tax. 

I have been in lawn biz for many years and I report them on my annual income tax, but never collect sales tax until my business became offical two years ago.


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## Great Lakes Snow Removal (Jan 19, 2002)

> _Originally posted by Pelican _
> 
> Best of luck to you Ohio guys fighting this.
> 
> This Bill wouldn't happen to be sponsored by a Democrat? [/B]


No Pelican, We get to blame the "tax cut and spend" republican govenor "taxin" bob taft for this one.

steve


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## Pelican (Nov 16, 2001)

Too bad, Great Lakes, sounds like he's Republican in name only!

Stephen, my point is these "unofficial" businesses (or gypsies) are in violation of various laws including tax laws just by their existence and should not be providing services in the first place. I understand that you must have a tax ID number to collect sales tax, but without this ID number, you may not legally provide a taxable good or service. This is called the "underground market". 

The other point I made is the State has no interest in investigating these gypsies, but be a couple weeks late in filing your return as a registered business and they're all over you.


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## Big Nate's Plowing (Nov 26, 2000)

> _Originally posted by Great Lakes Lawn & Snow _
> *No Pelican, We get to blame the "tax cut and spend" republican govenor "taxin" bob taft for this one.
> 
> steve *


I wish that we still had Voinivitch as govenor


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## Michael F (Oct 18, 2000)

Pelican & Stephen as for debate about sales tax if I recall, if you have a DBA your tax ID number is your social security number. A friends accountant tried to tell him no sales tax on snow services here in NY a couple years ago, I called to double check with state they said its taxable. 
I just called to check with state social secuity number is no longer tax ID #, BUT I asked about no DBA =no sales tax collecting. Said you still have to collect tax, & get number you might want to check their # is 1-800-225-5829. Will they chatch you probably not, is it fair to all the legal contractors that yor price is 8.5% lower, right off the top I don't think so. Good luck.


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## John Allin (Sep 18, 2000)

I thought that "no d/b/a - no sales tax" thing sounded wrong, so I had our financial guy call NY Dept of Revenue. Sales tax is sales tax - don't matter what you call yourself, or how you're set up. It's collectable and owed. Don't collect it ? It's still owed - by you.

By the way, we just got our notification that the NY Sales tax went up 1/4 percent across the board.


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## CT18fireman (Nov 30, 2000)

It does mean a bit of extra paperwork, but IMO it makes you look more professional. Your customers will know that you are following the rules and paying the tax. Many customers want to be sure they are doing business with "good" companies.


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## wxmn6 (May 23, 2001)

Ok, I am sorry if I misunderstood the way the law is for here in NYS regarding sales tax. If that is the way it is supposed to be, that's fine. But I did not know that, until now. But heck, I was doing lawn care and snow removal since before I was teen, so who expected them to collect sales tax then send to the state?  Does not really matter anyway because I was not making that much money at that time to make a difference in sales tax. 

But ever since I offically started my own business (DBA), I have been collecting sales tax. Recently the state (NYS) has raisen the sales tax by 0.25% thanks to state's 6 billion dollars budget deflect. Sales tax right now are at 8.25%


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## Pelican (Nov 16, 2001)

We took a double hit here in Dutchess County, County raised sales tax by .25% too for a total of 8 1/2%.

Last week our school taxes went up 10%, after last year's 9%, after the previous year's 8%....anyone see a trend here?:realmad:


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## Sno (Jan 12, 2002)

Pelican, the last two governors called themselves republican but they are democrat, no denying it.

Some scam but that is another story.

Sales tax would add up real quick and thats an expense my business and customers will not be able to compete with.

It would put me out of the snow business im sure.

First, I would either have to lower my prices to compete with those who dont charge them or charge them and loose them anyway. Remember, the "Rats" are already bidding half price.


When I bill out an investment property owner a fair 800.00 Mo
Now, I have to add another 50.00? At the same time the "Rats" are offering the service for 400?

The only thing that customer will see is Im automaticaly 50.00 more expensive than 75% of the other plowers right off the start.

Thats enough to skip my add in the phone book right off the bat.

Doesnt matter if we get only an inch all year, to the customer im 50.00 more than Little JR down the street.

I'd be dead in the water if it passes.


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## J&JProperty (Nov 28, 2001)

Has any one heard an update on if it went through or not, I've been looking but have not found any new info.


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## Sno (Jan 12, 2002)

I have not heard either, kinda sitting here butt cheaks puckered myself.

The whole sales Tax increase and all burns me.

While we all cut costs due to the economy, the state feels immune.



:angry:


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## Sno (Jan 12, 2002)

Pelican,

We are now at 7% from 6% State tax.. Williams county where I live is also pushing for another 1/2%

Thats 7 1/2 % up from 6%

What a crock!

Thats a huge pile of pennies.

Maybe they will salt with pennies this year?

They would still have enough to spend like mad.

Thats like a 20% increase in sales tax.

They want profesional snow plowers $ too?

Only 10% of the plowers?


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## Lawn Lad (Feb 4, 2002)

To the best of my knowledge it passed in HR 95. Only I have not verified this for sure as I'm not exactly certain as to whom I need to check this out with. 

If I was a betting man I would say that it passed.


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## BWhite (Sep 30, 2002)

*R.I.N.O.*

"Republican in name only" RINO There are VERY FEW real Republicans in this country. Here in MA. we have a so called Republican governor and his sneaky way of raising taxes to to double,triple or more the fees of this state .


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## Great Lakes Snow Removal (Jan 19, 2002)

> _Originally posted by Lawn Lad _
> *To the best of my knowledge it passed in HR 95. Only I have not verified this for sure as I'm not exactly certain as to whom I need to check this out with.
> 
> If I was a betting man I would say that it passed. *


I just received my copy of the O.L.A., the growing concern publication today and the way i read the legislative hotline, the bill was signed on June 26.
The snow removal service tax is indeed law, oh well thats politics, it makes proud to say that i voted for hagan.

Steve


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## cat320 (Aug 25, 2000)

Don't you guys get it they have to raise the taxes to pay for there pay increase.We are so high tech today with computers doing alot more work than people alot of stuff is made overseas for cheap and they,we pay higher health,sewer,and increase in all taxes .But they still don't have enough money  Oh I get it it's like the airlines that was in the news not long ago have every one take a pay cut so the executives can increase there paychecks .


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## Lawn Lad (Feb 4, 2002)

I could stomach higher government pay if they ran the government with better fiscal controls. I'd call it incentive pay. 

The problem is the lack of accountability when it comes to spending money. There is so much money being wasted on programs that duplicate one another with very little reciprocity between programs that could benefit from being tied together with others. Each program is separate and autonomous and therefore has it's very own infrastructure or overhead. It's all about creating more government jobs. It's political payback in some ways and in others it's simply creating a greater core constituency that votes for "you" when it comes to election time since their paycheck is based on the program that "you" put into place. 

It's complete crap that they need more money for education, for the seniors, etc. It's a scare tactic to use our own compassion against us and divert us from the real truth that people in government can't run a business to save their own lives. 

We have to balance our checking accounts. If times are tight we eat out less, don't take family trips, hold off buying the new living room furniture, get rid of the movie channels on cable, etc. Whatever it takes to make the budget balance we do this because we must. The politicians don't see this as being the case with OUR money. They think it's free to spend on whatever misguided policy or program they want to implement to broaden their base. 

I'll stop before I blow my top. 50% of my income goes to taxes in one form or another... 50 frickin percent. When will people say enough is enough.


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## Sno (Jan 12, 2002)

Enough is enough!

I agree, they are just buying votes.

Plain and simple.


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## Sno (Jan 12, 2002)

Thats it, its law starting August 1st..

Get this, only taxable if you make over 5000.00 per year..

UNBELIEVABLE!!!!!

The rats are scott free!!!!

Legaly!

I hope you all in Ohio think long and hard about a state contract or state help in Emergency this year.

Let em dig themselves out.


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## Sno (Jan 12, 2002)

Sorry, forgot the link...

http://www.state.oh.us/tax/Publications/Sales Tax Fact Sheet.pdf


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## Sno (Jan 12, 2002)

Wait a minute!

I dont do snow removal, I do snow plowing..

Found a loop hole!


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## Lawn Lad (Feb 4, 2002)

Thanks for the link Sno. 

The definition in the industry for snow removal is the hauling of snow off site. But let's just say this includes snow plowing so we're not greedy.

But I don't think the bill specifies ice control or sidewalk snow shoveling does it? 

Maybe this is a loop hole. I'd be interested in looking at the specific tax law. I'll have to look into this and do a little research. Sure would hate to have my customers pay any more than need be.


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## Sno (Jan 12, 2002)

Greedy?

 

I think thats only possible if you make under 5000.00.


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## Sno (Jan 12, 2002)

Greedy?


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## Lawn Lad (Feb 4, 2002)

Using the term greedy so that the state isn't too quick to close the loop hole. If we have snow revenues but report only those for Snow Removal they'll most likely catch on quicker and change their definition. The question is do you use a loop hole to it's fullest extent (read: abuse) or do you use it with some regard?


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## Sno (Jan 12, 2002)

No, after giving it some thought and consideration.

I can see where tax on removal of snow could be justified.

Your hauling snow on public roads etc.

Snow plowing costs the state little or nothing.

I dont see it as a loophole.


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## lb59 (Feb 22, 2005)

Chuck Smith said:


> Ok, that explains why it would be a problem counting on sales tax revenue. I thought it would somehow be harder for you as a business to manage it because it is unpredictable revenue. Your explaination makes perfect sense, I was not thinking of it that way.
> 
> ~Chuck
> 
> EDIT: Here in NJ, Sales & Use Tax is 6%. What is the rate in Ohio? Just curious.


In Ohio It varies By County.
Whashington County where I live it's seven and one half percent.


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## lb59 (Feb 22, 2005)

Great Lakes Snow Removal said:


> No Pelican, We get to blame the "tax cut and spend" republican govenor "taxin" bob taft for this one.
> 
> steve


My dad used to gripe about the Tafts in Ohio politics way back in the mid forties.
60 years later the Tafts are still at it.


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## lb59 (Feb 22, 2005)

In Ohio there are 2 numbers to deal with.
The first is your Tax Id number. It applies and is used for Your Federal and or state income tax only and has nothing to do with State Sales Tax. Some on here are referring to this incorrectly as a DBA No.
Whither you are a DBA Partnership or corporation or a (sole proprietor I.E. DBA) has nothing to do with the issue as these terms merely describe how a business is structured.
The Number applicable to State Sales Tax is The number on a venders license.

Remember this
ID number - Federal Income Tax.
Vendors license number - State Sales TaX.

***************
GET THE BASICS HERE.
http://consumers.creditnet.com/straighttalk/board/showthread.php?s=&postid=410243#post410243
*****************
>


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## SkykingHD (Jan 31, 2002)

*Ohio sales tax on snow plowing*

Where have you all been? This law has been in effect. We have been collecting sales tax and sending into govt of OHIO for 2 seasons. Here is the bad part. If you do not claim your income from snow plowing the Ohio sales tax dept will not go and look for you. They will only act if someone drops a dime on you. Look out on the road when a large storm comes. You see so many plows out doing snow plowing. I would love to know how many claim and pay taxes on this income.

Yes you see it right. The legit snow plower will be operating at a 6.75% disadvantage in Summit County Ohio. The govt will not go out and enforce the law. I contacted the state govt sales tax division and ask them what they were doing to enforce the tax law. The response was we are to busy enforcing the law to go after snow plowers who don't conform to the law, but if I would give them names and license numbers, then they might go look into it. I responded I am not the tax police but they could hire me. His response was he would not pay me to give him the names and license numbers of the law breakers.

If you are a larger company you have computer programs to keep track of you tax collected. This law IF ENFORCED will cause some small contractors to quit. The book keeper has another task.

Dave


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## SkykingHD (Jan 31, 2002)

*I didnt read start date*

This is old thread with new posts. Sorry I didnt read start date. I still dont like paying taxes. So many people inline with hands out before I get my money and I do all the work!

Dave


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## JPMAKO (Dec 10, 2003)

wxmn6 said:


> I don't think this is a real big deal as you may thought. Here in NYS, if you have DBA, you need to collect sales tax. If not, you don't have to collect sales tax (you can't, it is illegal). I explained to all of my customers and they all understood that I charge sales tax. You either have to file quarterly or annually, depending on your business income. Nope, I don't like doing paperwork, but it is part of doing busiess. Just have to live with it.


Yep this is a pain the A**. I have been telling all of my client's that I am simply collecting sales tax, I am not charging it...
Also it is a good idea to have everybody sign contracts that state in the terms that all payments are subject to NYS sales tax.
But beware there are certain things that you have to carefull of like salting/sanding I don't know how to charge sales tax on these items because you cannot charge on the mark-up of the salt or something???  
Maybe someone can elaborate on this?
Jason


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