Saturday, February 12, 2005

Tighten internal controls in your business

Installation of Trees, Shrubs, Plants, and Sod Taxable in Virginia

BackgroundThe taxpayer is a landscape contractor performing a full range of services such as grading, mulching, fertilizing, transplanting, mowing, and clearing. For each job the landscaper purchases materials, and pays the sales tax to the vendor. He maintains no inventory. Also the taxpayer does not hold himself out to the public as a retailer, and does not have a retailer’s business license.

Taxpayer's PositionUpon audit, the Department assessed sales tax on the sale and installation of trees, shrubs, plants, and sod. The taxpayer maintains that he operates as a contractor of real property, and therefore is the consumer of the landscaping material. As a result he is not required to charge sales tax on his landscaping sales and installations.

AnalysisTitle 23 of the Virginia Administrative Code (VAC) 10-210-610 sets out the application of sales and use tax for nurserymen and landscape contractors. Sub part (B) of the regulation requires tax to be charged when for a lump sum price shrubbery and similar items are transplanted on a purchaser’s land. If the installation is separately stated, no tax would apply to this service. Sub part (C) of the same regulation states that if the service goes beyond the sale and planting of shrubbery etc., and entails grading, seeding and fertilizing lawns, and weed killing the service provider is considered the consumer of the material and is required to pay tax at the time of purchase.

RulingIf the service entails the sale and planting of shrubs, trees and plants for one lump sum price the entire charge is subject to tax. If the services go beyond the latter sales and planting, as stated in the regulation, the service provider is considered the consumer. The audit assessment was sustained.

This ruling may be viewed at: http://policylibrary.tax.state.va.us/OTP/Policy.nsf

A sales tax solution for small companies

Tuesday, January 25, 2005

AvaTax ST - making sales tax less taxing for small business

AvaTax ST helps companies that manage their business with MAS 90, MAS 200, Accpac Advantage, or Great Plains in four very significant ways:

First, by saving significant data entry time in adding new customers, maintaining tax schedules and details for existing customers, and distribution and accruals of payables transactions to multiple accounts.

With AvaTax ST you have only ONE schedule and FIVE details - instead of hundreds or thousands. Different from other tax calculation solutions, there is no need to research and assign each customer to a specific tax schedule. There is just one single schedule that applies to all customers: AvaTax. As a result, setting up new customers takes much less time, NEVER have to research a tax jurisdiction or rate change again.

AvaTax ensures 100% accuracy for each and every transaction, first we verify and correct the address, validate the jurisdiction, and then calculate your transaction using the correct rate. Let our address and tax experts research and maintain the data, and NEVER have to worry about making a tax choice decision again.

AvaTax ST provides you "best practices" in sales and use tax compliance. Reporting includes complete detail of every transaction, along with reason and location codes, whether it was taxable on not, and revenue and cost account reconciliation.

Integration Service activation takes minutes, and integration is seamless which means no end user training is required. We integrate with more accounting, eCommerce, and 3rd Party applications than any other sales and use tax solution. There is no risk to your data or accounting system integrity, AvaTax ST populates sales and use tax information which is then incorporated into your ERP internal process.

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