sales tax

[ToFarGone20]

Just curious how many of you out there pay sales tax on your soap and sales tax on a wash.

Basically your inputs and the resulting wash are double taxed. I know here in Iowa we are, and car dealers are not. Many have an automatic wash on site, and yet are not held to the same rules. It comes down to the wording of the Iowa code 422.45(33)(1986), 423.3(40)(2004).

The association that I belong to is trying to fight this and make a change like other surrounding states have done.

The problem is that many don't want it changed due to the fact they are both wash owners and chemical distributors. (I recently was made aware this includes board members) So for years they have (borrowed, confiscated, secured...what ever term you choose) chemicals from their distrib business to run their wash.

So it seems as though the deck is stacked against us...

Just wondered if anyone had inside knowledge/advice of how this legislation may have been changed in their state. It would be greatly appreciated.

 

[rph9168]

In the majority of the states the operator is supposed to pay sales tax on their chemicals. The basic rule of thumb is that if you consume it you pay the sales tax on it. The problem right now is that many states are trying to revise tax codes to tax almost everything including the air you breathe to make up for tax revenue shortages.

Unfortunately local associations seldom have money for lobbyists or political clout to have much to say on tax issues. Politicians continue to say they are lowering income taxes to soothe the nerves of taxpayers and gain votes. At the same time they are taxing everything else to make up for the lower income tax revenue. In other words putting it back in one pocket and taking more out of the another. I am afraid that we are all going to be hit hard with all kinds of taxes and tax increases that we will have little to say about.

 

[Whale of a Wash]

In Minnesota- we have the sales tax on all washes. Carwashes-Movie theatres, and restaurants are exempt from paying sales tax on the WSG Utilities. That doesn't amount to much savings compared to the sales tax we pay. I think the HCA has been fighting that for as long as i can remember. A battle that will never be won, as most states are out of money.

 

[Randy]

In the state of Washington we pay 9.3% sales tax on the Soap we buy. We don’t pay sales tax on Wax, if that makes any sense. If we buy Soap or spare parts out of state we pay 9.3% use tax. We pay 9.3% sales tax on the gross from the car wash revenue. God help you if you don’t pay the use tax on out of state purchases. There was an operator that I knew who was buying everything for his car wash out of state on his personal credit card so he could get the air miles and not have to pay the out of state use tax. He thought he was pretty slick until he got audited by the state, he wound up paying almost $15000 in fines.

 

[rph9168]

In some states you do not pay tax on wax because for some reason they feel it remains on the vehicle and is not technically consumed. Go figure.

 

[Earl Weiss]

In todays economy I doubt any government will amend a code to delete a revenue source.

In Illinois the business pays on things it consumes for it's business, but there is no sales tax charged to the customer for "Services" . A few times they tried to change this and it was met with a public outcry and failed. Things like cleaning solutions and water for a car wash or laundry are considered incidental to the service so there is no tax charged to the customer.

 

[ToFarGone20]

That is to say no tax specifically collected from the customer...rather backed out of the total at the end of the month?