Connecticut Sales tax vs service charges, electrical contractor

I am also A EC in CT. We can only charge tax on labor only. The sales tax for material should already be billed with material cost. For your sales and use you only pay what the tax was for the jobs you charge tax for labor.

Yes, I know I can only charge tax on labor only, I don't understand why CT has to make this such a pain in the ...
My question is how do I make QuickBooks take my markup on the parts (everything I charged ABOVE my cost) and add that to my labor and then apply the tax? I have been doing it manually and it aggravates me that this expensive fancy software does not seem to be able to do it automatically. I could have just stuck with using Excel....

in both your posts you indicate that you want to "take my markup on the parts (everything I charged ABOVE my cost) and add that to my labor and then apply the tax?"

my question is why? 2 things don't make sense to me. 1) why would you want mark up and tax on materials to show up as labor?

2)don't you have to pay ct any tax you charge? you already paid the material tax at the supplier, you don't want to pay it twice.

why not bill labor as labor, taxable where applicable and materials as materials?

I just make a line item for material and the a line item for labor and make it taxable. Then QB can figure out the sales tax for the quarter.

Because the auditors caught me. The state says I am not collecting and paying all of the sales taxes due. I asked "how?" and they said "because your only collecting and paying sales tax on your labor" Then they explained that everything I make as profit on the materials is taxable. My argument was that "materials are not taxable because I pay tax at the counter" To which they agreed but stated I must include the markup on materials in my labor charges.

I was doing it the same way your are Sparxx, but They say if I write up my invoices showing "materials" and "labor T" that the "materials" would actualy have to show my COST including taxes paid and still throw he markup under labor.

The state defines "Labor charge" as AKA "Service charge" and shall include labor, expenses, markup etc...."

I do not mark up my material.I include it in my labor cost. Lets say I have to run to get some T-8 lamps, they are paying me my hourly rate so that would be my mark up but no marking up the material. So my labor is the only thing that is taxable.

So you just adjust your hourly rate in QB to cover the total job profit and don't even worry about materials etc.? or do you stick with a set hourly rate for commercial jobs?

I just charge them labor rate for getting material, this is on a T+M job. If I bid then I just figure the time to get material and add that to my labor. Everything we do is all labor from material to paperwork.

I do not know if you are still looking for an answer to this question, but if so.

set up a group item called "Material - tax included". Within that group have these items (which you might also have to set up.

Material Cost

Taxable Mark up

Non Taxable Mark up

Sales Tax (you might not be able to use your standard sales tax item for this, you may have to set up an additional one)

Then, when you print an invoice, the customer it will show up as one line item "Material - tax included". But when you do an item report you will see the amount of mark up you needed to add tax to, and the amount of tax you collected for it, but the customer does not see anything screwy on the invoice and you can stay straight with the tax department.

Hi, I need to find how how to set up a sales tax receivable account ( i purchase supplies from a vendor ) thank you

Most home improvement contractors do not pay or collect sales tax, in violation of state law.

Alright, for example...As a contractor in CT, If I go to the supply house and buy some materials for $26.48 + $1.59tax (totaling $28.07). When I enter the bill from this supplier into QB I enter the $26.48 under the "cost of goods sold account" the question is how should I enter the expense of the sales tax I paid of $1.59 since a can't bill the customer for this? Do I also enter this under the "cost of goods sold account" or should I enter it as an expense under an "expense account"? And If I enter it under COGS should I set up different tax line mapping? such as "Schedule C other costs COGS"?

Did you ever figure this out???  I just started working for an EC and I am so confused about this!!