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Sales Tax Question New York
I recently had my well rehabilitated because of very poor recharge rate. When I got the bill from the well driller, I was surprised to see that the he applied NYS Sales Tax on the entire bill including labor. I always assumed that a contractor would itemize labor and materials and charge tax on the materials only. Is this correct?
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Sales Tax Question New York
MacDaddy,
I'm not sure how New York's laws are written, but in most places there is no sales tax charged on labor.
I'd call the driller's accounting office. It might be a simple error, made by an illegal immigrant.
Joel
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Sales Tax Question New York
Not sure about NY either, but I'm a Michigan contractor who worked in Mississippi and they do charge tax on labor and are quite serious about collecting it too. Michigan is trying to tax certian industries, generally service type things along with entertainment---you know: the "money grab" routine.
A simple call to your state's dept of treasury about taxation would clear that up in a hurry. They may find out this guy is defrauding people and keeping the extra $ for himself.
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Sales Tax Question New York
I would doubt a business which issues a written bill with sales tax on it is trying to "defraud" anyone. Whether they should be charging it have no idea. It truly varies with the state and even possibly the county or city.
In our state there is some items that have no sales tax depending on the "use" they are sold for. How crazy is that for the retailer to keep straight?
Could the business be making a mistake, sure. kt
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Sales Tax Question New York
McDaddy; Here in Iowa, I just checked the tickets from a shed we had built this spring. All materials had state sales tax (5%), there was no tax charged on the labor. There is no state sales tax on farm equipment, food, prescription drugs, legal services from an atourney, and likely other things that I'm not aware of. On a weekend just prior to school starting the state has a tax holiday on school clothes. Frank.
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Sales Tax Question New York
Labor is taxible in NY. That is another great revenue builder for the great Empire state! 
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Sales Tax Question New York
Macdaddy
Labor in taxable. HOWEVER was your well work a home or property imporvement? NOT MAINTENENCE. There is a difference. Home improvement, materials and labor is not taxable. Maint like installing new shingles, materials and labor is taxable. Painting is maintenance. New siding is an improvement. Installing a new well is an improvement. Fixing an existing well sounds like maintenance. Installing a new leach field when the old one failed is maintenance. The rules are complicated...
Ask your contractor or driller, he is the one that has to prove it to the auditors why he did not collect tax. Sometimes it's just easier to charge tax to save the paperwork hassle.
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Sales Tax Question New York
Kenny. Kenny. Kenny.
Harvey hit the nail on head and said it in a more politically correct way.
If tax IS collected---either "accidentally", or because it was "easier" or "simpler" paperwork-wise, or otherwise such as fraud-- and no one from the State is standing there with their hand out saying "you owe us" where do you think that "tax" goes? It surely doesn't get returned to the taxee nor sent to the Feds --it goes right in the pocket of the seller.
The Arabs in this part of the country, of which I'm well acquainted who own the majority of stores from food to gas to furniture, were running scams doing just that.
And here's something to think about too: years ago I had a joint-venture plastics manufacturing business which sold retail. Under my state's sales tax laws I had to collect sales tax. Oddly though when my taxes were prepared by a CPA, and I lost the business, that collected tax was considered "income". However, in short, that income which included the collected tax ended up falling short of my needing to paying taxes (no profit) and became a total business loss for me. Bottom line, all the tax I collected was legally written off and I did not have to send any to the state. True story. My business loss was a genuine situation---but that said, how many schemers and con-men are out there that fold up shop and never pay taxes at all?
And yes, I'm jis' sayin'...
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Sales Tax Question New York
One thing you do not have to worry about in New York is the tax man with their hand out.
Businesses that do capitol improvements and maintenance have to justify to the state why they did not collect. It is all signed documents. That's why I said it is easier to tax than to try and justify improvements vs maintenance.
If you collected tax in NYS you are gonna pay it to the state. This state is extreamly greedy and is always looking for more.
RANT ON: These commies want to tax and catch people that barter.
This state really hates the internet and is working hard to collect sales tax on material being shipped into the state. RANT OFF:
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Sales Tax Question New York
This is a bit off the subject, but with holding taxes from an employees paycheck and then failing to send them to Uncle is not a good idea either. Severasl years ago a busness in our aeria was failing badly so the owner wasn't sending the with held taxes to the IRS. Needless to say he got caught and spent some time mowing grass at a federal facility somewhere. Frank.
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