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Sales Tax Paid - Contractor

  • 1.  Sales Tax Paid - Contractor

    Platinum Most Valuable Member
    Posted 12-09-2018 11:14
    Hi Friends

    i just got a new client who is a home heating repair servicemen. he is independent and also a new start up business.  He is registered  for and charges sales tax.
    The question, is what about the sales tax that he pays on all of his purchases.
    Does he take a credit on his ST 100 sales tax return in the period he purchases the parts as inventory, or does he take the credit when those parts are included on an invoice where they have been sold to a customer. ?

    all comments appreciated.


    Abby Alhante
    Melville NY

  • 2.  RE: Sales Tax Paid - Contractor

    Bronze Most Valuable Member
    Posted 12-10-2018 04:36

    Here is a link for a guide on the sales tax reporting for repair and service contractors.

    The answer really depends on how he orders his parts. Does he order them by job, or does he purchase them in stock, and then cost them out to a specific job?

    If he orders them by job, then he needs to determine when he orders whether or not the job is taxable or not, and if taxable, then he should issue the vendor a resale certificate.

    If he stores the items and then charges out by job the specific items go to - then he should obtain a direct payment certificate so?? he doesn't pay tax on purchase, but then charges and collects

    sales tax as he applies them to a specific taxable job.

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  • 3.  RE: Sales Tax Paid - Contractor

    Posted 12-10-2018 06:26
    The contractor  may choose to take a credit for sales taxes paid on purchase made for sale to a customer on his ST-100 or exempt himself from paying sales tax on purchase for customer by submitting a blanket resale certificate with his vendor.

    Alan Gellerman
    gellerman associates
    flushing NY

  • 4.  RE: Sales Tax Paid - Contractor

    Posted 12-10-2018 10:43
    NYS Tax Department has a publication dealing exactly with this matter.
    Google "NYS Tax Sales Tax Contractors"

    Perry Paletta CPA

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