This might be a stupid question and if it is I am sure somebody on here will let me know about it, but here it is. I am not is the dozer business for a living but have a friend who wants me to dig him a pond. The question is do I have to charge and pay sales tax on doing a job like this in Mississippi.
Sales tax on a service, such as dozer work, is a local ordinance that varies across the country. Probably need to check the local city or county tax ordinances to see if your service requires a sales tax.
Generally speaking, you can only charge sales tax on materials. Labor is not taxable. So if you buy silt fence, straw bales and pipe, that is taxable. You can tax the labor if you bill it with the material. But if you bill for labor only, then you do not add sales tax. It is as clear as mud. Call your accountant, or your county, they will give you the scoop.
Taxes vary from location to location as CM1995 has mentioned. What you posted landrvrnut22 is not true where I am, every part of the job is taxable, unless it is considered a "capital improvement" which is another can of worms. The only way Bandit44 will get the correct answer is if someone here is from his town, or he checks with the agency in charge of collecting taxes for his area.
Amen to that Steve. 8% on everything but clothes(4%) and food. They search every year for new taxes instead of cutting out things.
Thanks for the suggestions, I need to get my taxes finished and get them to my tax man and I will ask him. Don't think I will ask the tax folks because we still have bad feelings about me having to pay 7% sales tax on the used dozer I bought in 07.
Not only the local county taxing authority, but you must check the state law as well. As for tax on used equipment, you are stuck or should I say we all are stuck. Everytime a machine is sold cough up the tax.
Some folks might also say it depends on payment method.. Rumor has it there is this strange old school stuff still floating around in some locations called "cash". It's mystical stuff
here is a link to sales tax in Mississippi. http://http://www.mstc.state.ms.us/taxareas/sales/main.htm Ware I am at I would have to collect the 5% sales tax and pass it on to the city. If I was to move 20 miles to the west. there is no tax at all for anything. As for collecting cash and not pasing on the tax? I make 10 times as much as I pay the city in tax's from them in return. Plus I am not the one paying the tax it is the customer as it should be. I just collect it then pass it along. Taxs are a fact of life without them there would be no govermemt. :usa
Income tax for sure!
If your just doing it on the side just report it as misc. income or if your a farmer, as farm income. Keep it simple
That sounds like my kind of advice, I can do simple reel good. I just didn't want to do the job and get stuck later having to pay the state tax on it out of my pocket. Thanks for all the suggestions.
Residing in Texas I was able to claim a tax exemption for agriculture use since my dozer was going to be used on the ranch. This is a simple one page form that is filled out and given to the seller. Saved me a few thousand dollars on taxes.
Here in the fruits and nuts state you need a license to collect tax from the state. It's a lot of paper work to. It's just been raised here to 9.75% and we don't charge sales tax on the work, shock that other people are putting up with being a unpaid servant for the tax board, and all the record keeping, fines, late fees, jail time?
I tried to do that in Mississippi Alvin Tim. But the nice lady at the tax office told me unless I used it to pull a plow or disk all the time that I could not do that. I would have thought a farmer buying a dozer to clear off his own land and make improvements to it would not be like buying it to go in the dozer business. She also asked me what I intended to do with the land after I cleaned it up, I told her the same thing I am doing now, farm it and run cows on it.
Taxes are necessary, but too much tax is a bad thing. Hold the people who keep raising your taxes instead of managing what they have accountable. If enough people are voted out, the elected officials will start managing, instead of taxing
In canada I have to charge charge 12% taxes on used auto parts but sometimes if both people have something they need & were to trade strait across ( no cash ) you would have no income to declare.
I always hear stories about how folks are sticken it to the MAN. I must be the one they get even on cause looks like the MAN is always sticken it to me. They have raised our property taxes the last four years, mine have more than tripled, they have built 3 new schools and now they are broke and the state is having to take over the school system. Wonder what happened to all that extra tax money?
Three times I've written a reply to this message and then erased it. I was starting to think with the attitude about "just passing it along" and all this other YAY TAXES stuff, that some of you were just drones for big brother nice to see some people question the taxes and perhaps the intent of our government. :usa too much of this and I'll get us way off topic but I just wanted to say I'm happy to see the spirit in this forum. Not trying to stick it to anyone... including the "MAN" but the "MAN" needs to be kept in check with our vote here in the USA.