Windshield Repair Forum

I am in New Mexico. Does anyone know how we are suppose to treat taxes? How do you treat it on the invoice when billing an insurance company if they have agreed with you on a rate?

You must charge a sales tax on all repairs. Each county has its own tax rate and you must charge the sales tax according to which county you are doing business in.

Where I am in Northern CA., there is no sales tax on repairs because repairs are classified as a service. The guideline on the CA.gov website states that if there have been no tangible goods exchanged and only supplies (e.g., resin) are used during the course of a business transaction, no sales tax has to be collected. In fact, because all I am selling is a service, CA State would not even issue me a Board of Equalization seller's permit which entitles and requires retail businesses to collect sales tax. They even provide an example which says that an auto glass shop that replaces a windshield has to charge tax because in addition to installation, they are selling the customer an inventory part -the windshield. With WSR nothing has been sold except the repair service itself.
I would check with your local state's business and sales tax guidelines. If you charge sales tax inappropriately you can get yourself into just about the same trouble as you can find yourself in for not charging sales tax when you were required to.

In Indiana where I am.....sales tax is NOT collected for labor services. Definitely check with your local department of revenue.

No sales tax in the state of NC at the moment: Howevr many states are starting to tax auto mechanics, Beauty shops, Barbers, etc... just to raise revenues for the states short falls. Please note that if you sell a product to a customer then your do need to collect tax in NC and most other states. General supplies that you use to make repairs are not considered taxable.

New Mexico is kind of wierd. You have to charge tax on goods and services. The state of New Mexico collects tax just for the right to do business in the state. I am from Texas originally and In Texas you do not charge tax on services. Makes me really want to move back to Texas.

So I just got off the State of New Mexico Taxation and Revenue Department web site and in the section of the overview of business taxes it states " Gross receipts tax: An excise tax on the gross recepits - not net- receipt of persons who sell property in New Mexico, perform services in New Mexico, lease or license property in New Mexico, grant a right to use a franchise employed in New Mexico, or sell research and development services performed outside New Mexico when initial use of the product of the services occurs in this state Note: state and local governments selling gas, electricity, and cable television services are liable for gross receipts tax.

Here's a link for sales tax requirements in New Mexico: http://www.online-tax-id-number.org/New ... venue.html
It states that if you are in business and you sell a product you need to collect sales tax. If you do not sell a product, you do not need to collect sales tax. These days, as with many states that are trying to find alternative revenue streams in order to balance their budgets, they have (or will very soon) impose a gross sales tax to the business owner. In Oakland, CA for example, you need to pay either a minimum of $60.00 per year or $1.80 per thousand dollars that you earn. This is not a tax that is charged to the customer though it is a tax. Most businesses adjust the cost of their services so that this amount of money is covered in the service price.
This can be confusing because each state has its own requirements. The one thing most states do have in common is this: If you own a business that does not sell tangible products, (inventory, parts, etc) the state will not issue you a resale permit. A resale permit is in effect your license to buy inventory without paying tax because you intend to sell it and then collect tax at that time from the customer. If you are not selling something tangible most states will not issue you are resale permit. Without one, there is no legal way for you to collect sales tax.
Since state websites are often confusing and loaded with information, the easiest thing to do to clear up tax requirements is to contact the local state business tax office...

Thanks Paul for your opinion. I recently wrote that you have collect sales tax in New Mexico but I was wrong since it is not a sales tax. Each county here has a gross receipts tax on goods and services. We must adjust our prices here to cover the tax or else pay it out of pocket. It is not a sales tax it is Gross Receipts Tax. Four years ago the Govenor of New Mexico repealed gross receipts tax on groceries and medical expenses. During the legislative session earlier this year the legislators tried to bring it back but our Govenor vetoed it again. Our state is in the hole a few million dollars so I wouldn't be surprised if sometime down the road they try to pass it again.