This is for the Pros
When I, as a DIY’er, buys stuff at the home center, I pay sales tax.
I assume that a builder is tax exempt since he is “reselling” those same items.
Do you then charge sales tax to your customers and then pay the gov’t?
Do you pay the sales tax at the original purchase?
Is there some sort of exemption on this stuff?
Just curious.
Replies
You need to check with your state.
There are probably 45 different variation on this (a few states don't have any sales tax).
Some state labor is taxed, in other it is not.
In some state new construction is treated different from remodeling and in others it is not.
In New Jersey only people who make things like welders and cabinet makers are exempt. They pay tax on the whole thing called use tax.
in PA ...
no I pay the tax at HD just like U do.
I don't charge sales tax as a rule in the remodeling biz.
The rough guildline is ... another "built in" ... or permanent.
If I bought lumber to make a chair .. then sold that chair ... I should charge sales tax.
My mechanic, on the other hand ... charges me sale tax.
I pay no sales tax on my income.
Jeff
In Maine most of us pay sales tax just like anyone else. We're not considered retailers.
Beat it to fit / Paint it to match
Jim,
In WA state, materials that are to be used in the final product(lumber, windows, paint, plumbing, electrical, etc) are without tax when I buy them as a GC. I fill out a tax exempt form that is good at each location for 4 years. Tools, or things that don't get incorporated into the job, I pay sales tax on when I buy them. I charge sales tax to the customer on the value of my product (service or durable good that I created) and then I send the state a check for the amount of salex tax quarterly. I become a sales tax collector for the state.
Jim-
In Illinois, a builder pays sales tax when he buys his materials to build a house. No sales tax is collected from home buyer. Same with simple construction jobs.
If a builder was to sell 2x4s to a homeowner, he would not pay sales tax to the lumber yard and would collect sales tax from the homewoner.
If you buy tools on the internet and don't pay sales tax, you are Suppose to turn around and pay sales tax to ILlinois for those purchases.
If you would like the real dope on Wisc sales tax, call this number 608-266-2776.
You get out of life what you put into it......minus taxes.
Marv
I'm in Michigan and I pay the tax at the store. If I was in a manufacturing process, I could purchase tax free and the ultimate retail buyer would pay it.
blue
In California, one can obtain a resale certificate to defer sales tax on consumable items, then charge the tax to the customer for the finished product.
It's wierd here in New York.
Plumbing and electrical contractors will happily supply you with the state form, "Certificate of Capital Improvement," which, when filled out, exempts them, and you, from paying sales tax on fixtures and equipment "built into" a house, i.e., screwed down.
I have taken this to my lumberyards, and asked, "why is a toilet or a faucet, which I can easily replace, more "built into" my project than, say, the mudsills, studs, sheathing, rafters, joists, etc.??????
They tell me that their attorneys have advised them to not go there. I don't get it.
Thanks to all who responded. It sounds like it really varies state to state. I was curious about it since 5-6-7% of the cost of the materials in a home is a substantial amount of money - then to have to pay recurring property taxes on those same purchases . . . just seems extra burdensome to me. At least there is no sales tax to the buyer when you sell the home.
Kind of brings into focus how much of our income is actually taxed.