Sales Tax - InspectionNews

Joe Dach · #1 (**permalink**) 03-10-2010, 04:38 PM

Hi, I'm just preparing to get started as an inspector and this may sound like a dumb question, but are home inspectors required to charge sales tax? and if not why? I'm in Wisconsin if that helps.

Thanks, Joe.

Philip · #2 (**permalink**) 03-10-2010, 04:45 PM

In KY sales tax can only be taken on materials, not labor. Doctors and lawyers are professional and they will charge you everything but a sales tax.

Jim Luttrall · #3 (**permalink**) 03-10-2010, 04:47 PM

That is a state and local thing that you need to find out from your local officials.

Rick Hurst · #4 (**permalink**) 03-10-2010, 05:52 PM

Quote:

Originally Posted by Jim Luttrall

That is a state and local thing that you need to find out from your local officials.

I agree with Jim.

On the other hand, here in Texas home inspections are not taxable but the WDI report itself is taxable cause ALL pest and termite services are taxable.

Rick

Ted Menelly · #5 (**permalink**) 03-10-2010, 06:33 PM

Quote:

Originally Posted by Rick Hurst

I agree with Jim.

On the other hand, here in Texas home inspections are not taxable but the WDI report itself is taxable cause ALL pest and termite services are taxable.

Rick

Treatment/pest control are taxable. I work with 2 companies that questioned and audited about the WDI tax and neither had to pay the tax on WDIs alone. You apply no product. You can not be taxed if it is not pest control or treatment or termite treatment, fire ant, waht ever. You may say that you are not always applying product on pest control but at some time you are. WDIs you never apply product. You are treating nothing with a WDI.

Again. No tax on just a WDI. Question all you want. I was there for one of the audits. No products with a WDI, just a report, no tax. Same as a home inspection. No products, no tax. If you are paying tax on a WDI report then you better rethink it.

I also know a company that divided. One partner went one way and the other the other way. Neither paid tax on WDIs alone. Both were audited shortly after the split. Neither pay tax on just WDIs and never had.

Jim Luttrall · #6 (**permalink**) 03-10-2010, 07:36 PM

That is the beauty of Texas sales tax! No one but the comptroller really knows who's on first. I have heard it both ways and since I don't do WDI, it makes no difference to me BUT if you collect tax on ANYTHING, you had better send it every last cent. The state takes a dim view of anyone keeping any of their money!

Rick Hurst · #7 (**permalink**) 03-10-2010, 09:40 PM

http://www.window.state.tx.us/taxinf...s/tx94_114.pdf

Ted Menelly · #8 (**permalink**) 03-11-2010, 12:39 PM

Quote:

Originally Posted by Rick Hurst

http://www.window.state.tx.us/taxinf...s/tx94_114.pdf

Ok

I guess I have to inform a few folks that they better be charging sales tax for the joke of leaving a piece of paper behind. I called the comtrollers office. They first read a section (don't have it in front of me) that pretty much excluded non treatment or contract for treatment. Then she read another section that simply states you pay tax on anything even remotely related to any kind of pest service. My question to her after she said if you perform a service you pay tax I said "I am a home inspector, I perform a service and I do not pay tax" shea says "well that's different"

If a maid cleans a home she must pay state sales tax. I said that they are using products and leaving them behind.

Anyway some folks will want to know this. They have been going by the premise and have been audited that they do not have to pay tax on just a WDI. That count of who I know goes up to about six companies. I just talked to a few other folks I know.

Rick Hurst · #9 (**permalink**) 03-11-2010, 03:00 PM

Ted,

If you charge separately for the WDI, you have to pay sales tax.

If you do it for free, you don't have to report it.

Do you catch what I'm saying?

rick

Ted Menelly · #10 (**permalink**) 03-11-2010, 05:24 PM

Quote:

Originally Posted by Rick Hurst

Ted,

If you charge separately for the WDI, you have to pay sales tax.

If you do it for free, you don't have to report it.

Do you catch what I'm saying?

rick

Uhhhhhhhh..............Yup

Lots of ways to do it for free.

Richard Stanley · #11 (**permalink**) 03-12-2010, 05:43 AM

If a maid cleans a home she must pay state sales tax.
Ha. Ha.
Joke de jour.

Randy Aldering · #12 (**permalink**) 03-12-2010, 05:04 PM

Joe, that's actually a very good question. Here in Michigan, services are not subject to sales tax - yet. However, the money-hungry, revenue-seeking politicians in Lansing have been proposing a service tax for several years now. A recent grab at physician's pockets vis-a-vis a tax on their services was halted. If Michigan were to enact a service tax, to include home inspection services, then Wisconsin inspectors performing inspections in Michigan would be required to collect, and submit to the authorities in Lansing, a service tax. It amazes me to see how much taxation we the People allow. We let them tax us when we bring it home, tax us on the interest it earns if we bank it, tax us when we spend it, and tax it if we have any left when we die. No wonder the economy is in the condition it is in. Check with your local and state treasurer's office. They will be more than happy to let you know if there is a tax on professional services. Good luck with your business start-up, and welcome to the profession.

Scott Jarvis · #13 (**permalink**) 03-13-2010, 06:56 PM

In Wisconsin, we don't have to charge sales tax. We're considered in the service industry. The state was trying to pass a tax law last year to make us charge sales tax, but fortunately it was not passed, at least for the time being.

John Ghent · #14 (**permalink**) 03-14-2010, 05:52 AM

In CT we had to charge state sales tax on larger than 4 family, commercial inspections, or paid termite inspections. One to 4 family, no tax.

Randy Aldering · #15 (**permalink**) 03-15-2010, 01:19 PM

This makes me think about inspectors who are close to the state line, particularly where one state requires licensing and the other does not. How is reciprocity working in states where inspectors are located ear the state line, and both states require licensing, but the licensing requirements are such that neither state will grant reciprocity? The same thing will happen with sales taxes or service taxes. It becomes a headache.

Joe Dach · #16 (**permalink**) 03-18-2010, 07:12 PM

Thank you everyone for your help.

Joe.