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Can I price my services as tax included?
I run a small business from home fixing garden equipment. To make pricing easier, i want to post all my services as tax included, so i can round them to the nearest dollar, and don t have to carry change. Can I do that, or do the customer receipts have display sales tax? I would still pay my state the gross receipts tax.
9 Answers
- Coffee DrinkerLv 75 years agoFavorite Answer
Reciepts or invoices should show the sales tax separate from the charge.
however there's nothing stopping you from setting your base price at an odd number so that when you add sales tax it comes to whole dollar amounts.
For example where I live sales tax is 8.6%
If you price something at $23.02 then sales tax is $1.98 and the total comes to a nice round number of $25.00
You can advertise that your rate is $25 including tax, but when you give invoices or reciepts you should show all the numbers.
- troLv 75 years ago
if you want to invoice your services with tax included you can do this however the customer has the right to know what he is paying in sales tax so you may be required by the customer to show
if you are rounding out for your convenience then your charges for services will actually cost more thus you will also pay more sales tax on the taxable portion of your work
check your state laws, most states do not tax services, only products
- curtisports2Lv 75 years ago
You can. It's better to show the breakdown on the customer's receipt - saves them from having to do the math if they take a sales tax deduction on their taxes - but you aren't required to. The state only cares that you accurately report your sales and pay them the correct tax due them. They don't care which method you use. Just make sure you stick with whatever method you choose for the entire year. If you decide that for next year, you would rather charge and collect tax on your price, you may, as long as your account and record keeping is accurate. In that case, I would be certain to itemize both on all customer receipts.
- ?Lv 75 years ago
Get off your duff and determine your prices such that the price plus the applicable tax equals an even dollar amount. For example, if you wanted to charge $1.00 tax included and tax were 10%, the price would be $0.91 + $0.09 tax or $1.00.
- ?Lv 75 years ago
NO. you have to determine IF your services are even taxable in your state - and maybe only PARTS are taxable. and yes, receipts have to show tax, so you know how much you have to send to the state when you file sales tax returns. FIRST of all you need to get a state sales tax license. STATES usually don;t have a GROSS RECEIPTS tax if they have sales tax - you would pay state and federal INCOME tax (based on profit) and maybe a local business Privilege or gross receipts tax. you better keep really detailed records of all sales, sales tax and expenses
- anonimitieLv 75 years ago
Sure, you can do that. If your state has a six percent tax rate and you charge $10 then it breaks down:
10 / 1.06 = $9.43 Revenue and $0.57 in tax.
- A HunchLv 75 years ago
Sure.
But is there tax on fixing garden equipment in your state?
I'm guessing that there is not.
- Anonymous5 years ago
Make sure your receipts show the breakout. Otherwise the state can claim that the sales tax is on the total and make you pay more.