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Services taxes
Bill in Utah going through that would tax services (like surveying).
For those that work in like taxed areas, how much time does it take to comply?
One issue is that Utah has up to 300 different tax rates in various jurisdictions. So someone that gets around would need to look up the tax rate almost for every invoice.
I’m not as opposed to the tax as much as having to be the agent that collects it for the state. Just one more thing taking my time, more regulations to deal with. Should the client be billed for the time to collect the tax and deposit it with the state?
Here is one take on the subject:
https://docs.acec.org/pub/be0fe25f-c20d-94c6-5fbe-f80903293fda
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6 Replies
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They imposed a professional services tax in Fl about 20 years ago. This included Doctors and Lawyers (the cheapest people on earth besides used car salesmen.)
Everyone threw a sh*t fit and the tax was abolished about 6 month later. It wasn’t a paperwork nightmare, just some regulations but a pain nonetheless. ????
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Gotta love how they name legislation. They need more money so they call it a reduction Act.
H.B. 441 Substitute — Tax Equalization and Reduction Act
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LRDay stated the problem – if you collect both state and local taxes, you have to know and comply with the regulations for every tax district you do work in. This becomes a compliance nightmare and the only person happy about it will be your accountant because you’ll be paying him a lot more money.
In Louisiana there’s a state tax, every parish has its own tax, and cities like Houma also have their own tax.
I didn’t read the proposed legislation; if they treated it as a separate tax rather than lumping it in with sales tax then they could only collect it at the state level and eliminate most of the compliance nightmare. But there’s no way the local jurisdictions would let that fly.
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We pay sales tax at the rate oforthe location of the point of sale. For services it may become more complicated. Surveyors do part of the work in the field and then part in the office. If you bill for travel you could go though a bunch of places. I know they would sort it out, but do I tax at my office and the town gets their share of the tax or do I tax at the location of the project and that place gets the tax, OR do I have to split it up and tax for all the places I touched doing the work?
I know the lawyers are against it but haven’t seen where they been exempted (yet)?
Taxing causes some weird things. Trucking (at least for now) is exempt from sales tax in Utah. Ready mix shops figured this out a while back. So when you buy some concrete they bill about half for trucking (no tax) and the rest for aggregate and cement. So how much of a survey project is trucking? Might not matter if the service, trucking, becomes taxed.
Why don’t they just directly tax the taxpayer, make them keep track of everything they buy and send the money in from there? It’s all being kept track of by various computer systems anyway. Leave me out of it!
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Been collecting sales tax for boundary survey in Texas since 1992. Present rate at my location is 6.5%. In town it is close to 9%. There is a state web page that will give sales tax rate by zip code.
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