[Jacey]

I just got off the phone with the Texas Sales Tax Office who told me I didn't owe on the labor I paid a sub to do a flagstone job..but if I had done it as part of a landscape job, I would owe sales tax as a landscaper. Can anyone out there make that make sense? So any masonary work I do is taxed and people who do nothing but that are not?

[PSUscaper]

That will be a state/local tax code. I know in NJ we don't have to tax masonry, but starting last year, have to tax just about everything else.

[Jacey]

I was just chatting with a local Texas Contractor who said that the sub had to pay sales tax on his own stuff which sounds reasonable..but you are saying that masonary in NJ is not sales taxable at all..even if a landscaper does it? My local Tax Office said I had to put it all in writing to even read the code for myself..which sounds to me ludicrous. Seems like this should be public record for the asking..but what do I know..

[Cochran]

Visit the State Comptroller's website, it will give you all the useful information you need to know. If not, call a DIFFERENT Regional Comptroller's office--some are more helpful than others.

Let me see if I can help you clarify the sub work:

If you subcontract out to do work in Texas, the subcontractor would charge just as if he was working directly with the homeowner, and you would pay him as such as that is the subcontracted price he submits. You owe him NOTHING in sales tax, but he must collect that from the homeowner which he has to file with the State Comptroller. Even though you have a Sales Tax Certificate, you don't do tax exempt on a sub because you are not purchasing goods for resale, rather he is providing a service, through you, to a homeowner. If you would have performed the masonry work yourself, you would have charged the client sales tax on the materials and, in turn, filed those materials as a Taxable Sale on your Sales Tax Return.

You have to file that amount in the TOTAL SALES column of your tax return, but do not include it in the TAXABLE SALES column--the subcontractor would include the subcontracted amount in both the total sales and the taxable sales column as he is providing the taxable material and you are not.

Unfortunately our big helpful, friendly state has seemed to forget to inform the Comptroller's office they are here for HELP and not INTIMIDATION. "Everything's bigger in Texas" applies to the Comptroller as they want you to be as scared of them as the IRS. The Comptroller is actually required to get all information either in writing or record all verbal information you give in your file for CYA purposes. Also, from what I understand our new Comptroller, Susan Combs, is planning on implementing even more stringent requirements regarding sales tax. I forsee soon enough that residential will have to be taxed on both labor and materials......

Hope this info helps!