Sales Tax

[fishmanz]

Still doing my homework. I just learned that my location in rhode Island is 1 of the only 7 states that charge mat owners sales tax on their income.
To make matters worse, I fall into the 2% of mat owners that track their incomes with card equipment and won't be hideing any of it. Perhaps I should rethink the card system? Coins seem like a pain in the neck. /ubbthreads/images/graemlins/mad.gif

[JamesD]

A card system will make it much easier for you to pass along that 2% tax to your customers. You can even create materials to show customers why you are charging a few cents extra. I am sure that your customers aren't even aware that you have to pay sales tax.

[fishmanz]

Hi James, The tax isn't 2%. It's 6% of your gross recipts. The 2% is the percentage of mat owners that utilize card systems. When you use a card system, it really isn't a cash business because you have a running record of everything. It's still cash but with a paper trail of how much. Normally I wouldn't mind except the # of states charging this is so small it seems unfair. Particularry since I'm in the smallest state there is.
This is just my kind of luck. I fall into the 7% of states that charge it and the 2% of all owners that can't combat it either. You would think I would have had better luck in the powerball drawings all these years /ubbthreads/images/graemlins/grin.gif

[Howard]

Boo Hoo! You think you live in a state with high taxes, try NY, NJ or CA. My property taxes and income taxes and sales taxes that I pay are probably more than your mat nets a year - but that is a story for another day. Having a card system you are much better able to deal with the tax than a coin store. If you want to vend a washer at $3.00 just post the price like all other stores do $3.00 a wash in big bold letters and then a little plus tax, then have your card system charge $3.18 a load.

Those that have coin systems are as we say S.O.L. - they cannot collect a tax on top of the price they just have to deduct it from their revenues. Stop whining and play the hand you have been dealt - it is not like the state is charging tax only on your mat they are changing everyone else equal so the playing field is level. You don't compete in the other 93% of the states so why is that an issue?

[fishmanz]

I'm just learning the ropes here Howard. Since I fall in the small percentage of the states that charge sales tax to mat owners, it seems pertanant to me. Also, I'm only talking about sales tax, not real estate tax or income tax. Those are charged everywhere.

I do see the way you were able to pass that cost on to the customer. Do you get many complaints that it takes more off their card than they expected?

[DuboisLaundry]

Here in Wyoming there is no sales tax on self service laundry, but sales tax does apply to vending machine sales and WDF. 4% in our county, higher in those with new jails and rec centers

edited for spelling

we have no income tax either, but a hefty property and business equipment tax

[mjwalsh]

How long has the tax been on? If you are in a referral state hopefully you can get it referred like they have done in other states. Taxing gross receipts on a service oriented business such as coin laundry is not the best model for any state or on the federal level. It might be time to get acquainted with some better leadership for your state & work together as a group.

[neal]

You guys make Nevada look really good, No state income tax and low taxes for business and homes. I guess thats why so many are moveing here from California and opening new laundromats. I think I would rather have the taxes!!

[mjwalsh]

Neal, you seem to have us confused with South Dakota. We do have an income tax in North Dakota. Reasonable income & property tax makes more sense than a tax on the gross receipts of the service portion of our business. Remember on your gross receipts... means before your expenses are taken out. In other words, if someone has a rough year because of health or whatever they will more likely not make it on the gross receipt model. I have been in a third world country & from what I have gathered part of the third world countries' problem is too much property wealth in too few of hands. In that sense property tax helps prevent that. Tax on retail items is different in the sense that our landfills will not be filled quite as fast if actual material items are not quite as cheap. Even charities & churches do not ask for tithing before expenses are reasonably considered. Also charities & churches do not carry with them the heavy hand of auditors, law inforcement & actual fear of physical imprisonment etc.

[fishmanz]

Here in RI, the goverment does whatever it wants. We are very small so they hit us with every tax they can. Neil, you may be interested to hear that we are still denying the local Narraganset indians their casino. The state wants all gambling revenue for itself(as well as coin taxes). Perhaps you saw on the national news last year when the govener sent in the state police to beat all the indians and shut down their tax free smoke shop they were running on their soverign land. If I tried to dodge the sales tax requirement, I could be getting the beating next! hehe /ubbthreads/images/graemlins/wink.gif We are 35 miles from Foxwoods casino in Conn. The largest casino in the world, so they say. Not even 1 appartment building in that town, crappy demographics for sure.

[neal]

In Nevada the casinos provide lots of of good union jobs that pay well and pay most of the states taxes. We just got a tax refund this year over 800.00. If the people that gamble want to pay my taxes thats great. I feel bad for people in states that charge so much for every kind of tax

[mjwalsh]

Fishmanz, this sounds like a classic example of people getting the government they deserve when they don't take a strong enough interest in making the necessary relationships with the process & the media etc. They put that service tax on us in North Dakota back in the 60s so we can relate to how hard it is to get it off once it is put on but it is not impossible. The state of Washington & Wisconsin are more recent examples. How they enforce the law is another consideration. "Do they want to bring out the best in people" or something of a lesser nature.

Neil, do you really feel & think deep down that the answer is more gambling & sales taxes on fragile services is a good fit for most of the states of the country?

Howard, I know you are in love with your card system but the ease with which we can transfer extra money from our customers to the "party" or the government should not be our first priority.

Our friends in leadership roles at the CLA must be very decisive if & when the Uniform Sales Tax (Streamlining) across the country starts to get too close to services.

[fishmanz]

Well said! It is difficult to battle the goverment and change things from the status quo.
When uniform tax comes around, and it will, I think we will suddenly see interest in this topic.
After Howards insulting answer, I no longer pay any attention to his ramblings. He seems to have forgotten what it is to be new to the buissness. This is a discussion forum the last time I checked.

[Howard]

fishmanz -- perhaps owning your own business is the wrong move for you if you have such thin skin that you have a problem with my response. If you go back and reread it you will find that your question about taxes and the use of a card system was fully addressed.

And yes, boo hoo that you are in a state with a sales tax -- so are all your competitors so it is really a non-issue.

[fishmanz]

Thank you Howard for your answer. It was good. Your knoledge is vast. It's your personality that needs some work. Let's just start over. Truce?

[mjwalsh]

For the benefit of the viewers from across the country: When it comes to gross receipt taxes or sales taxes we need to be unified to keep the number of states that have them on coin op &/or card laundry services to as few as possible. The "I got a nickel attitude or competitive edge attitude of the card stores vs the coin stores" is not ideal. That level playing field argument is a trap that people can fall into. For example when will it end: Gross tax on natural gas therefore tax on water, electricity & fuel oil mentality. It is different than broadening the tax base with more services & more healthy & ideal options. It is adding more taxes pretending that government can provide a level of education & services better. The tease of getting rid of a reasonable tax on our net income in exchange for tax on our gross & every service that we use should be stood up to with courage.