Sales tax or not?

[LLee]

I just took a short course on tax requirements for small businesses. The instructor said that if I buy a tree or shrub from the wholesaler (no tax) and plant it for my client that I have to charge my customer sales tax and send it in to the gov. This seems like a lot of paperwork. Is there anyone with any suggestions on ways to legally avoid this?

[RRS]

Is there anyone with any suggestions on ways to legally avoid this?

Nope, it's the law. And it's not just trees and shrubs, it's anything you sell to the customer (seed, mulch, building materials, tree stakes, etc.)

It's really not that big of a deal. Just register with the State Dept. of Taxation. They'll send you a coupon booklet you use to send in your payments. You'll have to file tax exempt forms with all your suppliers. Or, to make it even easier just retain an accountant to do it all for you.

The only way around it is to have your customers purchase all your materials for you.

[Braxton]

I just took a short course on tax requirements for small businesses. The instructor said that if I buy a tree or shrub from the wholesaler (no tax) and plant it for my client that I have to charge my customer sales tax and send it in to the gov. This seems like a lot of paperwork. Is there anyone with any suggestions on ways to legally avoid this?

LLee,

First, I'm not even in business yet, but I've been doing research for about three months in order to go into business next spring.

I don't know about NC, but I called the TN department of revenue this week and asked about getting a tax ID. I was told that lawn maintenance/landscaping is considered a service and that I do not have to have a tax ID or charge sales tax as long as I do the installation. If, however, the customer just wants to buy something from me, I would have to charge sales tax, but only if I go over $4,000 in straight sales (not service) in a year. The catch to this is that I do have to pay sales tax on anything I buy for my business.

Regardless, a business lisence is required (at least in my county).

Anyone else know about this or have any advice? With what was outlined to me above, is there any reason to get a tax ID, some benefit I'm missing?

Braxton

[RRS]

This is what the VA Tax Commissioner has to say.

Title 23 of the Virginia Administrative Code (VAC) 10-210-610 sets out the application of sales and use tax to nurserymen and landscape contractors. The regulation specifically provides that the furnishing and transplanting of trees, shrubs, and plants is a taxable retail sale, and not the provision of services with respect to real estate. Title 23 VAC 10-210-610(B) states:

When a nurseryman, florist or other person makes retail sales of shrubbery and similar items, and as a part of the transaction agrees to transplant them on the land of the purchaser for a lump sum, the tax applies to the total charge. The tax does not apply to the charge for transplanting if the charge is separately stated on the invoice. [Emphasis added.]

I don't know about NC, but I'd say if your instructor said it was required I'd probably listen to him.

If you have employees you have to have a state tax ID to pay your state withholding taxes.

[Stephen M.]

If you have employees, you also have to get a Federal tax ID # for paying employment taxes.

NOT following tax law of any sort is business suicide.

[Braxton]

NOT following tax law of any sort is business suicide.

I wasn't suggesting not following the tax codes; I was just saying what the Dept. of revenue told me here. I don't know a great deal about it, which is why I ended my post with a request for more info. And I appreciate what has been given.

In the same spirit, would anyone be able to list a brief summary of tax requirements for being in business and where to find out about complying? I'm not asking for a complete rundown of tax codes, just an outline and suggestions for how to be sure to be in compliance.

Thanks again.

Braxton

[Braxton]

Addendum to my post above:

If anyone does feel inclined to list this info, could you break it up into starting requirements for a one man startup operation and the requirements that will come into play with growth and employees?

Thanks again.

Braxton

[Stephen M.]

Get an appointment with a reputable CPA and he/she can point you in the right direction on all licensing and tax requirements. Next follow up with your Dept of Licensing; Dept of Revenue; Unemployment Security Dept. who administers both state and Federal labor law; and check with your insurance agent for your Workmans Comp requirements. Next see if your County and or City has licensing requirements.

Washington State has all of that information available when appling for a Master License. I cut to the chase by going to the State capital in Olympia and visited all of the State Offices and shuffled my own paperwork thru the process. It took 1 whole day rather than several weeks. However, most of this info is usually the best kept secret held by the State, even though the bearuecrats think you should know it all by osmosis.