atcomsystems.ca/forum Forums Wiring - Telecom Carriers - Trunks & Services Cabling Telephones Systems Wiring Wire made Simple

Ok, that certainly makes it easier. I assume then that you do not pay any tax when you purchase the materials. You just give them a price then show the tax and bottom line total or you can just give the price and say "prices shown are less any applicable taxes".

-Hal

No we do not pay sales tax on the materials. It is my understending that if we did pay tax on the materials we would have to collect tax on the marked up price. For example we paid 5.00 for an item and resold it for 10.00 we would have to pay sales tax for 5.00 of the item. Also spoke to a customer that owns an electrical business in town and he always charges sales tax for electrical cabling.

This is how it was explained at the Contractors Law class I am taking.

If you don't have a resale number you must pay sales tax on what you buy and you can not mark it up if you resell it. You must charge the same price you paid for it (minus sales tax, selling it at the cost plus sales tax would be marking it up)

If you have a resale number you can do like above or you can pay sales tax on the purchase, resell it at a markup and only collect sales tax on the difference

OR you could just use your sales tax number when buying it and collect sales tax on whatever price you resell it at.

Your states rules might be different.

That is the biggest factor. You need to know your states tax laws. All we have is our knowledge of our states laws.