Are vendor services taxable

[john1]

My vendor does hole drilling, routing of flat signs and substrate cutting for me.

Should these be taxable on the customers end for the given sign they are getting done? I am a business so the vendor doesn't sales tax me.

Thanks!

 

[MatthewTimothy]

this is business 101, if you are charging X client than what ever you charge them should be taxed if they are in local and federal regulations of the tax. Any vendor you hire, the vendor should have your tax id. If your vendor does charge you tax you should claim it on your taxes. You should really consult a local accountant or take a local business class. Your county clerk also may have guides and stipulations.

 

[Gino]

I'm not sure about Maryland. Many places are different as to how this is interpreted, but here in PA..... each and every item and service can only be taxed once or you'll be guilty of double taxation. If you are tax exempt.... you need to charge the tax on the final billing to the end-user. Then you need to send those taxes in monthly... or according to how much in taxes you collect a month. It might only be every other month if your numbers aren't high enough.

 

[Malkin]

As a general rule of thumb in most places, tax is charged on the final purchase price of a product. This would include the labor involved to make the product.

If you live in an area that does not charge labor when itemized seperately, then in some cases it makes sense to do just that, esp when the labor is in addition to actual production, such as installation.

 

[john1]

Thanks guys, I had been on the right track just making sure.

What would you guys classify design time under, production too?

 

[Gino]

Ya get paid for it ??

 

[john1]

http://business.marylandtaxes.com/taxinfo/salesanduse/fabricationlabor/default.asp

Is the production labor of jobs taxable? Looks like it is according to this right?

 

[Malkin]

Just like a car or anything else I imagine. Most everything involves some amount of labor before it hits the shelves to be sold.

 

[SightLine]

We only charge sales tax on materials. I am not a taxable product nor is my time. Artwork/design time and install labor are always a separate non-taxable line item. We also sell ad space - that is not taxable either. No actual product - no tax. Now labor for running the printer, laminating, etc are built into the taxable selling price of the materials. As far as I know we are doing it 100% correct as about a year ago we went through a rather painful state sales tax audit that went back 3 years. That was a pain but in the end I had less than $1000 liability (started off at near 30k ) then had to prove this and that etc. In the end the liability was all on internet purchases for company use that we did not report and pay use tax on.

 

[john1]

Still confused since this says production labor IS taxable http://business.marylandtaxes.com/taxinfo/salesanduse/fabricationlabor/default.asp and i called the state and they said it's not

 

[Christian @ Visual Graphx]

In AZ to the extent of the tax code anything claimed as Labor is non taxable even if it goes into final assembly of a product... But you must bill accordingly and have a paper trail.

 

[john1]

Alright, i am pretty sure i figured this out finally after doing research.

Production of a job is taxable UNLESS it's listed as a separate line item on the in state customers invoice.