Gotta love the IRS

[TonyHuntimer]

In the past a shop could not tax labor. This kept the cost down on a lot of mechanical repair and fabrication since you usually pay by the hour for this stuff. Well, now the IRS is telling us that we have to tax any fabrication work. If we drill a hole where a factory hole did not exist or weld something that was not welded at the factory that we have to charge sales tax...and pay the government their cut. :pat:

At 8 3/4% sales tax the cost of jobs in the shop are going way up and the amount of jobs lost due to high shop quotes will follow suit.

Tony Huntimer
RaceHome.com

[LowBuckX]

"Value Added" taxes suck bad for anyone that is affected

[John McIntire]

wow, your tax out there is 8.75%??? Ours just went up from 6% to 7% here in NJ.

[ProStreet R/T]

Yeah it's 8.25% in SoCal.

Since when did they mandate tax on labor? Is it just a vehicle "value increase" thing, or is it applying to all trades?

[landyacht67]

Canada requires 6% federal tax on all parts & labour + 7% provincial tax on all "installation" labour

I dream of 8% tax

[James OLC]

You need to move a little to the East - only 6% right across the border.

[vintageracer]

Sales tax is GREAT!!!! With sales tax you have a choice of how much tax you pay. If you choose not buy anything, you pay no tax! Is that not the American way???

In Tennessee this is important since we have NO STATE INCOME TAX, just sales tax. If you do want to pay tax to the State of Tennessee, do not buy anything! The amount of tax I choose to pay is in my control since the more stuff/service I buy, the more tax I pay. Pretty simple. Do not want to pay any tax, DO NOT BUY ANYTHING!

We always hear how "regressive" sales tax is particularly to the poor. Excellent incentive for the poor to go out hustle, get an education, make some more money and not be poor! Rest assured a family that makes $100K/year in Tennessee spends a LOT more money buying things than a family that makes $25K/year and therefore pays much more sales tax to the State of Tennessee. How could it not be more FAIR????

Just remember who wants this tax money you must now collect in California. It's not the IRS! The IRS does not collect sales tax since sales tax is a state and local issue. It is YOUR state legislature and YOUR city government that set sales tax rates and collect sales tax. That's where to complain if you do not like it. It's your fellow neighbors screwing you with big "state" income tax rates and additional sales tax rates combined!

A better idea is to complain to your legislators to repeal the state income tax in California and rely solely on sales tax like Tennessee. That way you will not have the budget crisis you are currently experiencing in California. The State of Tennessee collected $350,000,000 ($350 Million) EXTRA dollars this budget year through sales tax collections that were not budgeted/expected and now our state legislators have the "terrible" problem of what to do with all that EXTRA MONEY!!!

We, the citizens of Tennessee, would also like to thank all the visitors to our wonderful state since they have also contributed heavily to this budget surplus by paying sales tax on all the items and services they purchased during their stay in Tennessee. Because of this, the State of Tennessee does not have to tax our state residents into oblivion! By the way, our new state lottery has contributed $567,000,000 ($567 Million)to our state education system since the lottery's inception only 2 1/2 years ago. Thanks to all the "numbers" players!

Our state sales tax rate is 7% (the amount the state gets) with the local city/county sales tax option up to an additional maximim of 2.75% on any single item up to $1,600 in value. Total maximum sales tax possible is 9.75% on any single retail sale up to $1,600. The amount of tax on any single item over $1600 is the state rate of 7%. Most counties are NOT at the legal allowable local/city option maximum they could charge. With few exceptions, everything is taxed including food at the grocery store. Items sold at the wholesale level for resale is not taxed. Tax is only applied at the retail sales point. We also have NO state personal property tax that many states also apply to their residents for stuff they already own. That's really nice of YOUR state legislators in those states who make you pay personal property tax on the junk/stuff you own in your home (furniture/appliance/vehicles etc) upon which you probably already paid sales tax when you purchased the item and income tax on the money you used the buy the junk in the first place!!!

Buy the way, property tax is also cheap. In Pigeon Forge where Bill Howell lives a house with an appraised value of $300,000 will have a property tax bill of about $1,100/year! License plates are $35.00. Electricity is the cheapest in the nation thanks to TVA. Please do NOT move here as we already have enough folks moving here from California, Texas and Mexico!

I just LOVE sales tax since it makes living in TENNESSEE CHEAP!! Maybe that's why its tops on Money Magazines "Best" place for business in the USA!

[neki67]

In the Netherlands it's 19% sales tax on parts and Labour . . . . And on top of that we have to pay importtax over the price of the part plus the shipping costs. It's not much else for the rest of Europe (I guess. Having a musclecar as a hobby isn't exactly cheap here and requires a lot of dedication. Hence the lack of (decent) speedshops.

Oh and before someone decides to respond with a smart reply; I know, I have to blame my government!!!

[element180]

I found this on wikipedia,so take it for what it's worth...

Alabama
4%, but cities and counties may impose additional use taxes.

Alaska
no state sales tax (or even personal income tax) in Alaska; however, local governments (boroughs and their municipalities) may levy up to 7%, and 95 of them do so

Arizona
5.6%, but cities and counties add as much as 5% to the rate

Arkansas
6%, plus any additional local taxes.

California
7.25%, and local supplementary taxes are allowed up to 8.75%

* 6.25% - State
o 5.00% - State - General Fund
o 0.25% - State - Fiscal Recovery Fund
o 0.50% - State - Local Revenue Fund
o 0.50% - State - Local Public Safety Fund
* 1.00% - Uniform Local Tax
o 0.25% - Local County - Transportation funds
o 0.75% - Local City/County - Operational funds

Colorado
2.9% with some cities and counties levying additional taxes

Connecticut
6% sales tax, with no additional local taxes

District of Columbia
5.75%

Delaware

There is no sales tax or income tax in Delaware.

Florida
6%

Georgia
4%

Hawaii
Hawaii does not technically have a sales tax, but it does have an excise tax which applies to nearly every conceivable type of transaction (including services), and is technically charged to the business rather than the consumer. Unlike other states, businesses may or may not show the tax separately on the receipt, as it is technically part of the selling price. 4% (sometimes shown as a 4.166% tax) is charged at retail and 0.5% is charged on wholesale. The exact dollar or percentage amount to be added must be quoted to customers within or along with the price. The use of an excise tax means that tax-exempt non-profit organizations must pay the tax, unlike states where they are exempt from sales taxes.

Idaho
5%

Illinois
6.25% Grocery and non-prescription drugs have sales tax of 1%. In Chicago, the general sales tax is 9.0%, in many suburbs adjacent to Chicago, the tax is 8.75%

Indiana
6%

Iowa
5%

Kansas
5.3%

Kentucky
6%

Louisiana
4%

Maine
5% general, service provider and use tax. The tax on lodging and prepared food is 7% and short term auto rental is 10%

Maryland
5%

Massachusetts
5%

Michigan
6%

Minnesota
6.5%

Mississippi
7%
Missouri
4.225% sales tax rate. Cities and counties may impose additional use taxes. Food has a sales tax rate of 1.225%.

Montana
Montana does not have a state sales tax but some municipalities which are big tourist destinations have a small sales tax such as Whitefish, Red Lodge, Big Sky, and West Yellowstone.

Nebraska
5.5% Municipalites have the option of imposing an additional sales tax of up to 1.5%.

Nevada
6.5%. Sales tax in the Las Vegas area is 7.75% as of October 1, 2005. The added 0.25% will fund new police officers.

New Hampshire
New Hampshire is one of only five states that does not impose any form of general sales tax upon the sale or use of tangible personal property within the state. New Hampshire does, however, levy a tax on meals, room occupancies, motor vehicle rentals, cigarettes, beer, wine, gasoline, and use of electricity (55 cents per megawatt-hour) and phone services (7 percent). A transfer tax is levied on real estate sales; currently 0.15 percent.Gasoline tax is 20.6 cents per gallon. Cigarettes: 80 cents per pack. Beer: 30 cents per gallon.

New Jersey
7% This is split as 3.5% for the State, and 3.5% for the municipality. Several municipalities, such as Elizabeth, Jersey City, and Mount Holly do not collect the city portion of the sales tax (as an incentive to lure shoppers), resulting in an effective 3.5% sales tax rate

New Mexico
New Mexico does not technically have a sales tax, but it has a 5% statewide gross receipts tax which is applied on typically everything including sales of goods and services, but not sales of food for offsite consumption.

New York
4% All counties and some cities add local taxes ranging from 3% to 5.5%. The combined sales tax in Utica, New York, for example, is 9.5%. In New York City, total sales tax is 8.375%, which includes 0.375% charged for the benefit of the Metropolitan Transportation Authority (New York). As of 4/1/06, New York State has again eliminated sales tax on all clothing and shoes up to $110.00 per item. Most counties and cities have not eliminated their local sales taxes on clothing and shoes. However, 11 counties and 5 cities (most notably New York City) have eliminated their sales taxes on clothing and shoes under $110. The counties where the year-round exemption will apply include: Chautauqua, Chenango, Columbia, Delaware, Dutchess, Greene, Hamilton, Madison (outside the City of Oneida), Rensselaer, Tioga and Wayne. The cities where the year-round exemption will apply include: Gloversville, New York City, Norwich, Olean, and Sherrill.

North Carolina
There is a state-levied sales tax of 4.5%. Sales are also subject to county taxes. Most counties tax 2.5%, for a total of 7% tax, but Mecklenburg County has a 3% county tax. In addition, there is a 29.9¢ tax per gallon of gas (effective January 2006), a 30¢ tax per pack of cigarettes, a 79¢ tax on wine, and a 48¢ tax on beer.

North Dakota
5%

Ohio
5.5% Counties may charge from up to 2% and county transportation districts may also charge up to 2%. Local school districts may also charge up to 2%. In both instances (transportation district and school districts) they must be approved by a vote of citizens within the district.


Oklahoma
4.5% sales tax rate. City and county sales tax rates range from 0% to 5%. [10]


Oregon
Oregon has no statewide sales tax, although local municipalities may impose sales taxes if they so choose. The city of Ashland, for example, charges a 5% sales tax.


Pennsylvania
6% sales tax rate. Allegheny County and Philadelphia County have total sales tax rates of 7%. Food (not-ready-to-eat), most clothing, medication, and prescription drugs are among the items exempt. [11]


Puerto Rico
5.5% sales tax. Municipalites have the option of imposing an additional sales tax of up to 1.5%.


Rhode Island
7%. The rate was raised to from 1% to 7% as a temporary measure in the 1970s, but has not since been lowered. Local taxes may also apply, such as Cranston's 1% restaurant tax.

South Carolina
5% state sales tax, but a 7% sales tax on prepared food.


South Dakota
4%


Tennessee
6% sales tax on groceries, and 7% on other items. Counties also tax up to 2.75% in increments of 0.25%—most do so around 2.25%. If a county does not charge the maximum, its cities can charge and keep all or part of the remainder. Several cities are in more than one county, but none charge a city tax, thus paying only the county taxes. Tennessee does not have an income tax.


Texas
6.25%, but local taxing jurisdictions (cities, counties, special purpose districts, and transit authorities) may also impose sales and use taxes up to 2% for a total of 8.25%


Utah
4.75% Additionally, local taxing authorities can impose their own sales tax. Currently the majority of Utah's aggregate sales taxes are in the range of 5.5% - 7.0%. (Utah Sales and Use Tax Rates)


Vermont
6% Purchases of clothing under $100 are not taxed. The Towns of Williston, Manchester, and Stratton add a 1% local option sales tax. Burlington will also add a 1% local option tax in the fall of 2006. (VT Dept of Taxes).


Virginia
5% Eligible food items are taxed 1.5%. VA Dept of Taxation Cities and counties may also charge an additional "Food and Beverage Tax" on restaurant meals. Code of Virginia § 58.1-3842


Washington
6.5% It does not have a state income tax, but it does have a Business and Occupation excise tax (B&O) tax (in addition to the state sales tax), which applies to a certain percentage of the gross revenues of a company operating in Washington. The sales tax does not apply to food items (carbonated beverages are not classified as food), but no state income tax. Local additional sales taxes vary from 0.5% to 2.4%, sales taxes for the regional transit authority (for example, total sales tax in Seattle is 8.8%, and 9.3% in restaurants and coffee shops).

Residents of Oregon, Alaska, Montana and Alberta are exempt from sales tax on purchases of tangible personal property for use outside the state


West Virginia
6% state sales tax

Wisconsin
5%

Wyoming
4%

[MuscleRodz]

I guess the IRS is only trying to do what US citizens have done for years using loopholes in the laws. They figure you are fabricating a product for sale and they want their cut since they can tax products. How was you notified of the change?

Mike

[Damn True]

The solution:

www.fairtax.org

[E30M30]

Once again Denmark wins the tax competition. 25 % sales tax on EVERYTHING. Doesn't matter if it's custom fabrication or tomatoes...

[WS6]

Hell yeah Damn True, that is the solution. Once again I am glad I do not live in California. The weather is not worth it to me. That's nuts that they want to tax labor. One way or the other the government will get its money. Banks, insurance, and investment companies will too

[Bill Howell]

Sales tax is GREAT!!!! With sales tax you have a choice of how much tax you pay. If you choose not buy anything, you pay no tax! Is that not the American way???

In Tennessee this is important since we have NO STATE INCOME TAX, just sales tax. If you do want to pay tax to the State of Tennessee, do not buy anything! The amount of tax I choose to pay is in my control since the more stuff/service I buy, the more tax I pay. Pretty simple. Do not want to pay any tax, DO NOT BUY ANYTHING!

We always hear how "regressive" sales tax is particularly to the poor. Excellent incentive for the poor to go out hustle, get an education, make some more money and not be poor! Rest assured a family that makes $100K/year in Tennessee spends a LOT more money buying things than a family that makes $25K/year and therefore pays much more sales tax to the State of Tennessee. How could it not be more FAIR????

Just remember who wants this tax money you must now collect in California. It's not the IRS! The IRS does not collect sales tax since sales tax is a state and local issue. It is YOUR state legislature and YOUR city government that set sales tax rates and collect sales tax. That's where to complain if you do not like it. It's your fellow neighbors screwing you with big "state" income tax rates and additional sales tax rates combined!

A better idea is to complain to your legislators to repeal the state income tax in California and rely solely on sales tax like Tennessee. That way you will not have the budget crisis you are currently experiencing in California. The State of Tennessee collected $350,000,000 ($350 Million) EXTRA dollars this budget year through sales tax collections that were not budgeted/expected and now our state legislators have the "terrible" problem of what to do with all that EXTRA MONEY!!!

We, the citizens of Tennessee, would also like to thank all the visitors to our wonderful state since they have also contributed heavily to this budget surplus by paying sales tax on all the items and services they purchased during their stay in Tennessee. Because of this, the State of Tennessee does not have to tax our state residents into oblivion! By the way, our new state lottery has contributed $567,000,000 ($567 Million)to our state education system since the lottery's inception only 2 1/2 years ago. Thanks to all the "numbers" players!

Our state sales tax rate is 7% (the amount the state gets) with the local city/county sales tax option up to an additional maximim of 2.75% on any single item up to $1,600 in value. Total maximum sales tax possible is 9.75% on any single retail sale up to $1,600. The amount of tax on any single item over $1600 is the state rate of 7%. Most counties are NOT at the legal allowable local/city option maximum they could charge. With few exceptions, everything is taxed including food at the grocery store. Items sold at the wholesale level for resale is not taxed. Tax is only applied at the retail sales point. We also have NO state personal property tax that many states also apply to their residents for stuff they already own. That's really nice of YOUR state legislators in those states who make you pay personal property tax on the junk/stuff you own in your home (furniture/appliance/vehicles etc) upon which you probably already paid sales tax when you purchased the item and income tax on the money you used the buy the junk in the first place!!!

Buy the way, property tax is also cheap. In Pigeon Forge where Bill Howell lives a house with an appraised value of $300,000 will have a property tax bill of about $1,100/year! License plates are $35.00. Electricity is the cheapest in the nation thanks to TVA. Please do NOT move here as we already have enough folks moving here from California, Texas and Mexico!

I just LOVE sales tax since it makes living in TENNESSEE CHEAP!! Maybe that's why its tops on Money Magazines "Best" place for business in the USA!

Preach on brother, preach on. Moving to Tennessee ten years ago from Georgia saves me many dollars in taxes even though we have a higher sales tax rate. One thing Mike said that is different here than it is in his county is the auto tags. In this county, auto tags are only $18 per year, compared to as much as $1000 a year for the same car/truck in Georgia.

[shmoov69]

AMEN!! :twothumbs The fair tax/sales tax only is the way to go! It should be "fair" across the board. If you make $2,000 a year, pay 15% or whatever. If you make $20,000,000 a year, the same percentage! But, it will never happen, there is not enough "control" of the govt. then. No matter what some think, there are certain people in the govt that want you to let them do the thinking.......Ahem........Socialisim.........Ahem !:ripped:

[E30M30]

I have a low income job (teacher at the local technical college) I pay 49 % of my income in tax. If you earn 65000usd a year you pay 60% in tax. Sometimes it feels like it would be way easier to give all my income to the government and then show up to get food coupons and clothes... On top of the income tax we still have 25% sales tax.

[Damn True]

Move.

[JoshStratton]

I have a low income job (teacher at the local technical college) I pay 49 % of my income in tax. If you earn 65000usd a year you pay 60% in tax. Sometimes it feels like it would be way easier to give all my income to the government and then show up to get food coupons and clothes... On top of the income tax we still have 25% sales tax.

Doesnt this amount also pay for your insurances? It is still steep, but a little more tollerable if certain things were included.

[E30M30]

We have free healthcare, free education and good welfare, so we haven't really got "poor" people over here (of course there is always a few) I won't complain too much, but it's a bit hard to have an expensive hobby (especially when all the parts I buy in the US is close to double price when it arrives here..)

[harshman]

When you own a business you'll soon see that there isn't anything that is free. If all of us paid tax (income or otherwise) at the end of the year instead of having it taken out of your check weekly, there would be a revolution.


Income redistribution is a bad thing and those that are in power or seek it with promises to help the poor or middle class with other people's money should be beaten.


I am not rich by any means. I have been knocked down more times than I care to admit:injured: but I will continue to fight to live the life that I want. This is the land with the greatest opportunity to better yourself. Taking free handouts from the government only degenerates the taker.


Political – nope just reality.

[ironworks]

I got into this mess a few years ago, The Bureau of Auto repair said I was operating illegally with out a license. They said I was a Repair shop, I said no I'm not because I charge tax on my labor.

Well after a long phone call with the BAR CEO, I realized that if you legally have to register with the BAR, Then i will do it because that make me a repair facility. There is no tax on auto repair labor but there is on fabrication. But if I make anything not for a car it is not repair.

Rodger :rolleyes:

[TonyHuntimer]

Move.

Problem is...I've been to about 25 states and at least 15 different countries and I wouldn't want to live anywhere else (except possibly Grand Cayman). So I'm stuck paying taxes right where I am. :)

I'll pay the extra taxes if it means I don't have to breathe cigarette smoke while I eat at my favorite restaurant (sorry smokers). I can drive 2 hours to the snow. One hour to the beach. Oh, and I can drive my Camaro every day of the year. :cool:

Tony Huntimer
RaceHome.com

[Damn True]

We have free healthcare, free education and good welfare, so we haven't really got "poor" people over here (of course there is always a few) I won't complain too much, but it's a bit hard to have an expensive hobby (especially when all the parts I buy in the US is close to double price when it arrives here..)

No, your healthcare is not free, nor is your education....and welfare......well don't get me started. The best part is that you are working your tail off and a good portion of the money YOU EARN is being redistributed to people who work less.

Like I said......move.

[Damn True]

Problem is...I've been to about 25 states and at least 15 different countries and I wouldn't want to live anywhere else (except possibly Grand Cayman). So I'm stuck paying taxes right where I am. :)

I'll pay the extra taxes if it means I don't have to breathe cigarette smoke while I eat at my favorite restaurant (sorry smokers). I can drive 2 hours to the snow. One hour to the beach. Oh, and I can drive my Camaro every day of the year. :cool:

Tony Huntimer
RaceHome.com

Totally agree.
There is a lot that is wrong with this country, but it's a lot better than........um everywhere.

There is a really good reason why people want to immigrate here regardless of where they are now. Heck, there was a line of over 100 people outside the embassy in FLORENCE, ITALY all trying to get immigration visas to the US.

[paul67]

Taxes ,the UK gov is looking to tax light bulbs to make us buy the long life 1s

[E30M30]

No, your healthcare is not free, nor is your education....and welfare......well don't get me started. The best part is that you are working your tail off and a good portion of the money YOU EARN is being redistributed to people who work less.

Like I said......move.
You're right it's not "free" still I like it here...The unemployment rate is around 4 % over here, but of course there are some, who just doesn't want to work (and I pay for them..) But Denmark is definately not "a land of opportunites", I think I'll stay a while though

[StRacerDuke]

An extra $350M for the state of Tenn in one year and this is considered a lot? I think the Ca government spends that about ever 15 minutes.

[Motorhead]

An extra $350M for the state of Tenn in one year and this is considered a lot? That's $350million over what was budgeted for the year. I think the political term for that is a "Surplus":bananna2:

I wish SC would do something like this. This way the tourist areas bring in more income for the state, and those of us who live in the more industrial parts of the state wouldn't pay 7% of our check to the state every week. I realize I would still have to pay taxes, but as was said before, at least I would some control over it.

[parsonsj]

I'm digging it down here in Florida. In Maryland, I paid 7.5% income and 6% sales tax.

In Florida I pay 7% sales tax.

I'll take that deal every day. And all you tourists: be sure and rent a car!

jp