I moved (again)

[StarTech]

Originally I from Alabama where we had state income tax, personal property tax, and real estate tax (but the real estate tax went away when you turn 65). Now here in Tennessee we have no state income tax but the real estate tax is forever. Alabama had a homestead exemption but not Tennessee.

In Alabama they don't require sales tax on labor but in Tennessee they do; unless, it is on-site labor. Even after five years it still bugs me that they tax labor but that their of getting state income tax. In Alabama I got a 10 % discount up to $100 on the sales tax collected when I paid them in. In Tennessee no such discount. In Alabama you have business license fee plus the state income tax. In Tennessee I just pay a business income tax annually which is my business license fee.

Bert I have a minor accounting question. When say the GST paid is base on what collected vs what you paid out. How in the world you find out what all the other suppliers has tacked on the invoices or is the just what you paid the last vendors you got parts from?

 

[bertsmobile1]

GST is listed as a separate item.
Every business in the supply chain is supposed to add it so for each business it is a case of GST paid Vs GST collected and it does not matter if the goods had been through 20 hands before I get them as that is reconsiled at every step in the chain on an cost price Vs sale price. All I need to know is the GST my suppliers charged me and the GST I collected from my customers.
This is good in some ways as some goods could have better than 50% of tax added to them but Joe public just sees 10% tax on their invoice.
Business moaned & groaned about it but in reality it made things a lot easier because everything gets a 10% tax added to it
Prior to this there around 300 different sales tax rates so a mower might be taxed at 5 % but the catcher gets taxed at 25% and labour was not taxed at all .
Petrol & oil was taxed at a differet rate so each different 2 stroke mix had a different tax rate
So life now is simple as all you do is sub total then add 10% to it.
The down side is you have to keep the receipts from your suppliers to prove you paid the 10% on your inputs so you can claim that as a deduction against the GST you collected from your customers.

Now the stupid thing is there is a threshold turnover , under which you do not have to collect GST which currently is $ 75,000 and shortly will be increased to $ 100,000 .
SO I do not add GST to any of my invoices thus all of my repairs are 10% cheaper than the big box stores because they have to add GST to their invoices.
In theory I still pay my suppliers the GST but am not allowed to charge my customers GST so in theory my suppliers remit the GST on the stuff I buy & I get 10% less profit because I have paid 10% more for my stock.
In practice you have to make sure that no invoice has a final price that is a whole division of 11 so when the tax man audits it does not look like you have been adding GST and not declairing it

This loop hole was introduced for the benefit of white collar workers who are employed as a company or contractor & not a PAYE wage earner despite actually being an employee and for the benefit of the businesses who employed them, most of which would be considered suporters of the Liberal party ( who introduced the GST ) which are rather similar in platform & policy to your Republicans , thus the workers at the lower end of the income spread pay the bulk of the taxes.

 

[PTmowerMech]

After two trips to HF, I realize I need more customers. LoL. Yesterday's trip I picked up the 5 drawer General box. I wasn't too impressed with the quality. But, I think it'll work out fine. Now I have a place for the tools that won't fit in the other box. And maybe a couple of drawers to separate a few things like needle nose from regular pliers, torques bits from Allen heads, etc etc.
And especially a place to put diagnostic tools.
Today marks my first week in this shop. So far I've taken in 4 chainsaws, 2 trimmers, two riders, a tiller and a push mower.
2 of those customers were from the competition. The rest were just passer byers. This location is awesome.

 

[StarTech]

Bert, That where our two tax systems differ then as I don't normally pay a sales tax on purchases for resale; unless, it a very small purchase which write off at the end of the year. Customers just pays the local and state sales tax rate on the markup items. No multiple taxation. Just a final tax rate on end users.

It sounds like the VAT is scheme to tax everything multiple so the enduser actually ends paying more as they are actually paying all the taxes one final time. Otherwords they are paying taxes on taxes. Great system for the government; terrible system for the consumers in my opinion.

PT, I think you probably brought the 5 drawer mobile cart and yes they are not that well made but heck they are partially screwed together and not welded solidly as the bigger tool boxes and cabinets.

Those 2 cycle handheld here are a lost leader items. I do them to get to the more profitable equipment. I can spend a lot time of them and get very little return; basically just make a profit on the parts and maybe an hour of labor. Might spend several hours doing the repairs as some has to be completely torn down to get to the problem areas.

HFT can make you poorer if you go for all the eye candy they have. That is why I carry no more cash then need for items I am needing on each trip.

 

[bertsmobile1]

In theory the Tax passes through and the final customer pays 10% on the final purchase price.
But of course do I add my 30% to the untaxed or taxed price, nobody knows .
What is important for the government is If you vanish without sending the tax you have collected to the tax office theyget nothing whee as here I the final seller does a bunk the tax man only looses the tax on the final mark up.

 

[PTmowerMech]

After 1 week, I paid out over $1000, Parts, my helper and tools. I collected $70. LMAO.
A man could go broke doing this. Especially with HF close by.
But I digress. I have equipment that'll be fixed this week. The customer I finished and got paid on was pleased that it was done in one day. And according to my facebook page, he's spreading the word about me. He told me that the last time he had his mower serviced, it took them 6 weeks to get it finished. So when I delivered it back to him the next day, cleaned & serviced, he was surprised and happy.
I got a message this morning from an old customer I had when I was here before, who was glad to see me back in town and had a mower for me to fix. Says the wait time for the two other shops here are just too long.

 

[StarTech]

See that why you got to watch the expenses and customers wonder why I charge $45/hr. My brother it was easy to run a business too until he lost over $6000 the this year and that was after I stepped in and raise his rates. Just as I got profitable he quit so I continued the business and got accused of stealing his business. I feel that you can't steal something that was just thrown away.

As for tools I just make do until I can afford to purchase them. Not going to pay $80 for a 22mm wrench but now I got one coming that is under $10. I already had one but needed a second one for a pressure washer pump fittings this week.

Oh I lost some money at the beginning too but it was making good on repairs that my brother had collected payments on. I had to as the my brother business was in my name legally. I even lost a few customers because I was finishing the repairs that brother failed to do. But I was taught how to manage my money well before I started doing this. I may not be making a killing but at least I am profitable.

I do have a vendor that has become a pain due the new ridiculous shipping charges on small orders so need to reroute orders to a vendor that has slightly higher prices on the parts but much lower shipping charges ( total overall costs are less). The current retail prices from the first vendor are having to be increase by 15% GPM but the other vendor I can go back to regular list prices. Just another 200K of part numbers that got to be added to the software SKU database here. I reckon A&I just don't want small shops as customers as Sunbelt did. When you from $10.50 max on shipping to what ever UPS retail rate is rough. I just paid $16 shipping to get $45 belt. Still cheaper than JD on the belt but I can do better on the shipping costs. A&I has already lost $2000 in sales to me so far this year.

 

[tom3]

Don't know where you are located but that Amazon Prime looks to be a sweet deal these days. Lots of parts for about anything, good prices, free quick shipping. I see USPS trucks running around here on Sundays and they are stuffed to the ceiling with those boxes. Not sure how it works for a resale type operation though. Be interesting to compare their prices, along with Ebay sellers, with your supply chain prices and shipping. Paying that shipping on one belt seems absurd.

 

[PTmowerMech]

I use Amazon sometimes. If the supplier doesn't have one and I can't find it from the other suppliers. Seems the suppliers like Stens, are always cheaper than Amazon sellers.

 

[PTmowerMech]

See that why you got to watch the expenses and customers wonder why I charge $45/hr. My brother it was easy to run a business too until he lost over $6000 the this year and that was after I stepped in and raise his rates. Just as I got profitable he quit so I continued the business and got accused of stealing his business. I feel that you can't steal something that was just thrown away.

As for tools I just make do until I can afford to purchase them. Not going to pay $80 for a 22mm wrench but now I got one coming that is under $10. I already had one but needed a second one for a pressure washer pump fittings this week.

Oh I lost some money at the beginning too but it was making good on repairs that my brother had collected payments on. I had to as the my brother business was in my name legally. I even lost a few customers because I was finishing the repairs that brother failed to do. But I was taught how to manage my money well before I started doing this. I may not be making a killing but at least I am profitable.

I do have a vendor that has become a pain due the new ridiculous shipping charges on small orders so need to reroute orders to a vendor that has slightly higher prices on the parts but much lower shipping charges ( total overall costs are less). The current retail prices from the first vendor are having to be increase by 15% GPM but the other vendor I can go back to regular list prices. Just another 200K of part numbers that got to be added to the software SKU database here. I reckon A&I just don't want small shops as customers as Sunbelt did. When you from $10.50 max on shipping to what ever UPS retail rate is rough. I just paid $16 shipping to get $45 belt. Still cheaper than JD on the belt but I can do better on the shipping costs. A&I has already lost $2000 in sales to me so far this year.

Since I don't have a lot of mark up on parts, parts prices aren't that important to me. Of course, I'll always spend a couple of minutes looking up the best price. But the customer is going to pay it anyhow. Unless it's just outragious. But they already know beforehand, about what the cost of the repairs & parts are gonna be, before I order anything.