Sales Tax Issues
In some states a contractor is not required to collect sales
taxes from their customers when a repair job is completed. The contractor
pays sales tax on the parts when he/she purchased them. This is obviously
the preferred way of the contractor to do business if possible
because it eliminates a great deal of administration work and expense.
In some states a contractor must collect sales tax
on parts and on labor from their customer when a repair job is done. It is
important for a contractor to check with their local, county, or state taxing
authorities to determine what tax laws apply in their areas.
The goal of flat rate pricing is to give the
customer an upfront price that includes any and all costs including sales
taxes.
If your area requires you to charge sales taxes on
all parts and materials then there are two ways to handle that. One way is to
not include any sales taxes in your flat rate prices and your
technicians can quote a repair price from your flat
rate pricingbook and then say “plus tax.” This is one of
the many ways Accu-Pricing™ is designed to work.
The other way to
handle sales taxes, is to include it in your flat rate price sheet and
your technicians will say “this price includes all sales taxes.” This
is also one of the many ways Accu-Pricing™ is designed to work.
If your area requires you to charge sales tax on only
parts or only labor then Accu-Pricing™ will also work that way so that your
technician will say “this price includes all sales taxes.”Accu-Pricing™
has a “field” for sales tax amounts and percentages already built into it which
automatically calculates the amount of tax due for each repair.
Of course
Accu-Pricing™ data can be imported into most of the
common accounting programs on the market to help facilitate
record keeping. Some states will have sales tax rules that differ when
different kinds of work are being done. For example; the state
of Texas currently requires tax on parts and labor when
doing commercial work but only tax on parts when doing residential work.
The great thing about Accu-Pricing™ is that it will conform to the way you want
to run your business and to the way tax is collected in your state.
