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 pricing book 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.
