Windshield Repair Forum

In my area of Michigan U.S., our state is implementing a 2% labor, service tax starting in 2008. Anybody already paying this tax in their location and have you had any problems passing this charge on to insurance or networks?

I get faxes from them often for updated rate changes but so far haven't seen anything that addresses new tax issue.

Thanks,

Starquest

Is this just a sales tax on labor or is this a tax on top of the sales tax you already pay? In Kansas we pay 7% sales tax on labor and the net works pay it no problem.

Currently, we are not charged tax on labor, starting 2008 we will be. Guess I should be thankful it's not at your 7% rate. Of course not knowing your area other applied taxes could be higher.

Thanks for your response!


Starquest

Salestax on labor , never heard of it, I mark that line zero point zero !

We have 8% here, sales. I tried to go with the labor only but the state requires we pay the sales tax so....
Oh and the networks pay it to us, they also report via 1099 to the IRS.

Talk to your accountant. Mine says that the new tax does not apply to windshield repair.

Yeah, New Mexico makes us pay sales tax on labor. I have to charge 7.5625% to my customers (that includes fleets - I have a friend who works in the state tax office)

According to the Legislative Inquiry Service, Michigan Department of Treasury, if the windshield repair business separately itemizes parts and labor they would not be responsible for payment of sales tax on the labor portion of the bill. "Section 1 of the General Sales Tax Act [MCL 205.51 (1)(d)(B)] states that sales price includes charges by the seller for any service necessary to complete the sale other than, amongst other things, labor or service charges involved in maintenance and repair work on tangible personal property of others if separately itemized. If you have any other questions, you may contact Treasury's Technical Services Division in Michigan, William Sawyer, at (517) 636-4357.

Arizona has no sales tax on labor. Iowa does.
Depends on the state, I don't think California does either.

What!!
I have never heard of any tax on labor. I did not know it exists on a "service". Now i need to check into it in Utah. I know in California we never had any such thing as a labor or service tax.