# Markup on supplies



## Kartracer0 (Apr 27, 2018)

How do you markup supplies? I am constantly being asked for receipts on materials that i am a retail dealer on and they want my invoice from supplier? What do i do?


----------



## griz (Nov 26, 2009)

Who & Why do they want your supplier invoices?

T&M job? owner has the right to see receipts.


----------



## mstrat (Jul 10, 2013)

I don't ever recall being asked for material receipts...is there more of the background you care to share for us to help you out? I can see T&M deals wanting them, but if you've got a contracted price, then they have no need to ask for them...the price is the price. 

Are you in a dispute, is that why someone's asking for lots of details? I think the only time someone kinda hinted to me they wanted cost details was when they were upset about how much the extras ended up costing...


----------



## Fishindude (Aug 15, 2017)

Unless you are working open book T&M you have no need to show your material receipts. If you are working open book T&M, then you should have an agreed upon material mark-up in the contract. 10-20% plus sales tax wouldn't be out of line at all.


----------



## sidemouse (Apr 19, 2018)

I don't mark up supplies since I'm in the service business and don't feel like dealing with a retail sales tax and exemption paperwork nightmare, my customers pay what I pay and if they want to see the receipt I have no problem with that thou I don't think anyone's ever questioned me (again not that it matters, I keep the receipts until the job is done as well they can just run to the store I just went to and double check so it really doesn't matter).

I do, however, since I'm in the service category charge service fees.
For example, I usually charge an $xx delivery fee.
I also charge labor if I have to do anything with said supplies (such as installation).

But for the landscaping portion of my business there is no mark up in that sense, otherwise I'd have to set myself up a separate retail portion.


----------



## Bull Trout (Dec 6, 2016)

sidemouse said:


> I don't mark up supplies since I'm in the service business and don't feel like dealing with a retail sales tax and exemption paperwork nightmare, my customers pay what I pay and if they want to see the receipt I have no problem with that thou I don't think anyone's ever questioned me (again not that it matters, I keep the receipts until the job is done as well they can just run to the store I just went to and double check so it really doesn't matter).
> 
> I do, however, since I'm in the service category charge service fees.
> For example, I usually charge an $xx delivery fee.
> ...




how are you exempt from charging sales tax if you don’t mark up materials?


----------



## Inner10 (Mar 12, 2009)

Bull Trout said:


> how are you exempt from charging sales tax if you don’t mark up materials?


Here you can not collect/remit tax if you do less than 30 grand in business per year. IIRC.


----------



## Tinstaafl (Jan 6, 2008)

Bull Trout said:


> how are you exempt from charging sales tax if you don’t mark up materials?


Because you already paid the tax when you purchased them. :blink:


----------



## Big Johnson (Jun 2, 2017)

Bull Trout said:


> how are you exempt from charging sales tax if you don’t mark up materials?


I’m guessing he pays the sales tax on his invoice of which gets passed on to his customers. No requirement to double charge sales tax. Maybe in commiefornia and the east coast.


----------



## Bull Trout (Dec 6, 2016)

Tinstaafl said:


> Because you already paid the tax when you purchased them. :blink:




Doesn’t that require the paperwork the OP claims to trying to avoid? 

I find it much easier to set up resale certificates at suppliers and than to have to track and claim the sales tax spend on materials that we resell


----------



## Bull Trout (Dec 6, 2016)

Big Johnson said:


> I’m guessing he pays the sales tax on his invoice of which gets passed on to his customers. No requirement to double charge sales tax. Maybe in commiefornia and the east coast.




So who pays the B&O taxes? Or is that not done in every state?


----------



## cwatbay (Mar 16, 2010)

Big Johnson said:


> I’m guessing he pays the sales tax on his invoice of which gets passed on to his customers. No requirement to double charge sales tax. Maybe in commiefornia and the east coast.



Yes, in Commiefornia, everyone is taxed as many times as possible. 

However, what we do is to just go ahead and pay the sales tax at time of purchase. Less paperwork for my accountant and me. 

When I quote projects, it's a "Project Price", which means all costs are wrapped up in one price: labor, materials and tax. 

Now, if the state gets a bug up it's butt, and, wants to know how much tax I charged the client, I simply have the total price, the price we paid for the materials (which includes the tax we paid on them), deduct the cost (with tax) of the materials from the total price. The left over monies are labor. Which is not taxed. 

So far, no audits and no one ever asked.


----------



## illbuildit.dd (Jan 7, 2015)

My bids are "labor and materials =$X" I never get asked for reciepts. The only time I give them a receipt is if it was something they were suppose to cover and I go ahead and pick it up. A friend of mine just went through a nightmare of showing receipts on a complete house build. The guy was being an a$$hole and kept questioning whether he could've gotten this or that cheaper and was trying to screw him on it. I was standing there at the end of it and it turned into a very heated screaming match. The customer was way in the wrong.


----------



## Tinstaafl (Jan 6, 2008)

Tinstaafl said:


> Because you already paid the tax when you purchased them. :blink:





Bull Trout said:


> Doesn’t that require the paperwork the OP claims to trying to avoid?
> 
> I find it much easier to set up resale certificates at suppliers and than to have to track and claim the sales tax spend on materials that we resell


In the OP's case, as a retailer he has to collect sales tax and remit it to the gummint, so he's doing the paper dance no matter what.

In my case, if I mark up materials, I have to collect and remit sales tax the same way. 

If I don't mark them up, and don't purchase them using a tax exemption, the only paper game I need to play is to show receipts to the client if it's a T&M job.

I've never had anyone ask to see them, but I wouldn't have a problem with it.


----------



## sidemouse (Apr 19, 2018)

Bull Trout said:


> Doesn’t that require the paperwork the OP claims to trying to avoid?
> 
> I find it much easier to set up resale certificates at suppliers and than to have to track and claim the sales tax spend on materials that we resell


Wait...

First off my business is licensed under a Service category (no this is not a joke) so if I wanted to charge sales tax I would have to file for a separate retail license.

This is a "Contractor" board...
That could be anything from roofing to paving to swimming pools and golf courses, a contractor could even be someone who all they do is procure materials whereas another contractor does almost all the work (as in manual labor).

In my business, 90% or more of all sales are service-based. So if you're in construction things might be different but I'm in landscaping which is almost all agricultural, looking up construction I see those folks cross into ag as well thou I'm not sure what their main classification would be...

So...
I suspect the bottom line has a lot more to do with your actual business classification. Come to think of it, I believe someone who has to ask this "sales tax" question should be thinking really hard about calling a CPA for advice.


----------



## Big Johnson (Jun 2, 2017)

Bull Trout said:


> So who pays the B&O taxes? Or is that not done in every state?


“The business and occupation tax (often abbreviated as the B & O tax) is a type of tax levied by the U.S. states of Washington, West Virginia, and, as of 2010, Ohio,[1] and by municipal governments in West Virginia and Kentucky.[2]”



https://en.m.wikipedia.org/wiki/Business_and_occupation_tax


----------



## Bull Trout (Dec 6, 2016)

Big Johnson said:


> “The business and occupation tax (often abbreviated as the B & O tax) is a type of tax levied by the U.S. states of Washington, West Virginia, and, as of 2010, Ohio,[1] and by municipal governments in West Virginia and Kentucky.[2]”
> 
> 
> 
> ...




Well then I guess I should feel special


----------



## Bainbridge (Apr 18, 2017)

Bull Trout said:


> Well then I guess I should feel special


We are so special! And now required to provide paid sick leave, yay!


----------



## daffysplumbing (Oct 16, 2017)

Bainbridge said:


> We are so special! And now required to provide paid sick leave, yay!


Paid Sick Leave is another tax added to your business.. The Paid Sick Leave money you pay alleviates the government from having to pay your employees when they file claims for when they are sick and not working.

The problem my company has is I have been paying some of my employees (not all) commissions that are so high I have been wanting to lower their commissions for a long time, but did not. These employees are making more than $3,000 per week. Now, I have to pay them 3 days of Paid Sick Leave every year and I really don't want to pay it because I feel that what I am already paying is maxed out. So, thanks to the Paid Sick Leave I will eventually have to lower their commission, or they will price themselves out of their jobs.

In California, we have to pay 1 hour of Paid Sick Leave for every 40 hours the employee works. The maximum is 3 days per year and the employee can accumulate up to 6 days. The question I never could find an answer to was whether or not the employee is entitled to getting paid when he never gets sick. The Paid Sick Leave has to be paid even when the employee has to take off work for family problems. The amount paid is based on the previous 90 days the employee worked. I don't know if that is work or calendar days.

Another serious problem is it can be difficult to do the calculations, tracking and accounting to the employee for the sick days. I give my employees 3 days at the beginning of every year and they have a form to fill out and can request to get paid any time they want even when they are not sick. An employer must put the number of days paid and the number of days available on the employee's Wage Earning Statement every time you pay the employee. The fines for incorrect Wage Earning Statements are fairly high. 

It got to the point where I had to develop a software program to create Wage Earning Statements so my company is protected against lawsuits. My Wage Earning Statements include a table showing the number of hours the employee works each day of the week and my employees sign their Wage Earning Statements every week. This way, my employees cannot come back with a lawsuit and claim that I worked my employees more than 8 hours on any one day and my company owes his for overtime pay.

Incidentally, I terminated two employees 8 weeks ago because they had several issues and both employees filed post-termination worker comp claims. I even paid the two workers 6 full weeks of pay for severance pay. Lucky for me, I knew I was going to terminate these employees several months ago. So, I sent the two employees to our company's clinic for x-rays for their feet and for a general medical evaluation. You can legally send your employees for health evaluations when you are thinking about giving them a promotion, or when you want them to start performing a new type of duty that has physical requirements.

Now, I lost track, but I think I've had 15 or 17 post-termination worker comp claims since May 2016. I think about 50% of the billboards in California are for worker comp attorneys and almost every bus is plastered with signs telling employees to sue their employers.


----------

