I lived in Maryland. Im about to starting mobile detailing business I have question about pricing for service. If my regular wash is $39.99 then how much sales tax should I apply? also Do I FIN to open business account?
They charge tax on labor in Maryland? In California you can only charge tax on supplies (tangible products) and not labor. Most places even auto body shops have to create an itemized invoice separating the two hardgoods/labor; and the hard goods they tax on from what I have seen is body parts, everything else is consumable and considered overhead. How are you going to tax an ounce of wax? In fact I'm pretty sure detailing supplies are non taxable consumable goods, falls under overhead and shop supplies, unless you are going to itemize each and every chemical, product etc that you used you really cannot tax them. You end up paying taxes at the end of the year, but write off supplies, towels products etc. Make sure you keep your receipts and your invoices of products you buy and the customers you charge.
Taxes depend on state regulations. There should be ample instructions on the web and a phone call to your state taxing authority. You don't want to get it wrong, it could get expensive. In theory, you shouldn't have to pay sales tax when you buy your cleaning supplies since they're used up in the service that you're charging for. If you did, then sales tax would be charged twice on the same product. Other items, like your tools, and possibly your towels etc., would have to be taxed when you buy them because they aren't incorporated into the product you're selling. If you have a mobile detailing business, you're providing a premium service so you need to charge a premium over a normal hand wash. If a quality hand wash at a shop is $39.99, then you need to charge more than that because you have to cover your vehicle expenses and travel time not to mention all the setup and cleanup time required at remote locations. The customer should expect to pay more because they are receiving a considerable benefit of having the car washed while they work or while they're at home. Careful, you may find yourself working for effectively less than minimum wage.
