Amish craftsmanship my butt!!!

[flip flop]

Can't take any more.....
I'm a general contractor and just lost a rather large job (100k plus) to the Amish. The Amish bid was just about 6 1/2 % less than mine...hummm. Small guys like me are required to pay 7 % tax on all material purchased, the Amish do not.
I have four full-time guys and struggle to keep them busy enough to keep their families feed. I could lie and file for "religious tax exemption", but couldn't live with myself by not doing the "right thing".
How can the Amish use our road system, snarl traffic, and allow their horses to crap all over the place and not pay taxes??

Thanks for allowing me to vent.
Flip Flop

 

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[WindHarvester]

Sorry to hear that you lost the bid. Although I get along with the Amish fine and we have a lot of them here in Southeast Ohio that I often buy produce from, it does get pretty irritating when you know they pay no or nearly none into the tax system.

Whats this about "religious tax exemption"? Do tell how it's done.

 

[Frankn]

Get a retail sales tax license. This exempts you from the sales tax on your material. You only have to pay tax on the income. Frank

 

[Michigan Badger]

This doesn't really apply to your post rant but after reading all posts it suddenly occurred to me that I can't recall a time when an Amish person was in trouble with the law around here (and we have lots of those people not far from us).

There's a large Indian reservation in northern Michigan and I know their Tribal Police keep busy.

I have heard that down in the Detroit area the emergency teams don't dare respond to an emergency in a known Arab community unless they have police support. The reason being the devout Muslims are very serious about the garments their women wear. I heard of one case where the emergency team was almost killed by a husband of a sick Arab women. The team removed some of her clothing in an attempt to save her life. This outraged the husband who came out with a large knife. I've heard a lot more but that's enough.

But the Amish seem to be a quiet and peaceful people.

As for the tax exempt issue, loads of pastors of all denominations have opted out of playing the SS tax base. Some lost everything as a result and now live on charity in homes built for them by various denominations.

 

[flip flop]

Sorry to hear that you lost the bid. Although I get along with the Amish fine and we have a lot of them here in Southeast Ohio that I often buy produce from, it does get pretty irritating when you know they pay no or nearly none into the tax system.

Whats this about "religious tax exemption"? Do tell how it's done.

Don't know, don't wanna know. I know a couple guys that have done it......just not for me.

Teaxstee2007,
The Amish DO NOT pay sales tax on materials. Stood in line behind them at the contractor services desk, the register has a list of companies that have religious exemptions.

 

[flip flop]

Get a retail sales tax license. This exempts you from the sales tax on your material. You only have to pay tax on the income. Frank

Frank, that sounds like a much better option. I'll do a little research.
Thanks

 

[mikeofaustin]

Get a retail sales tax license. This exempts you from the sales tax on your material. You only have to pay tax on the income. Frank

Frank, that sounds like a much better option. I'll do a little research.
Thanks

As a business, I'm guessing he's already done this. It's kind of a 'freebee' for sales of materials you buy to use on the project. But, my guess is, that it's not because of sales tax, but also a part of tax in general, for 'income' tax. The Amish drive horse an buggy. I used to live in Canada, and they were called "Hutterites" up there. To them, a dollar goes a much longer way for them, that what we have. I mean, think of it, you have people that live by candle light. Of course they don't need that much money... but what's curious, is how they were able to undercut you by such a small margian. I think perhaps the guy needing the job done has an 'in' with them, and all they need to do it bid the job just .25 percent under you. Underhanding for sure.

 

[mrs.oroblanco]

Most folks with businesses do not pay sales tax.

The ranch doesn't pay tax on stuff purchased for the ranch - and, as a business owner - if you DO pay tax (and I don't know why you would) - you take it off your income taxes come tax time.

Amish do not, anyone with a license - does not. (because they don't have to pay any).


Beth

 

[mrs.oroblanco]

Oops, forgot to include this:

http://www.tax.ohio.gov/divisions/sales_and_use/index.stm


http://tax.ohio.gov/documents/forms/fill-in/sales_and_use/exemption_certificates/ST_STEC_CC_FI.pdf


Thats if you are in construction. Others can be found on this page. Just pick the one you need.

http://dw.ohio.gov/tax/dynamicforms/searchresults_st.asp



Beth

 

[mikeofaustin]

Most folks with businesses do not pay sales tax.

The ranch doesn't pay tax on stuff purchased for the ranch - and, as a business owner - if you DO pay tax (and I don't know why you would) - you take it off your income taxes come tax time.
Amish do not, anyone with a license - does not. (because they don't have to pay any).
Beth

Yep, it's actually two governments that collect tax. One is the federal government that collects income tax, but there is also a state sales tax, and if you sell outside the state, you don't have to collect sales tax, but if you sell within the same state, you have to collect sales tax for the items that you sell... but in this case, it's called a forward (what I call it anyway, ... I can't remember the real name of it)... But, if you buy it, and use it for the job, then it's a forward (you collect no tax). But, as an worker, you are supposed to collect sales tax on the finished project. Example, ... you pay no sales tax on the items you use in your job, but you DO collect sales tax on the job you complete. (that's why I hate dealing with people in state). So, the items you bought were probably 1K, but you never paid tax on that. But, the job you did amounted to a 5 grand sale. You collect tax on 5k. Sales tax.

EDIT: I wrote this off the cuff and it sounds confusing even after I wrote it. But, regarding sales Tax... if you buy something for a job.. the client pays sales tax, you do not. however, you do sometimes have to collect for sales tax and submit it... That's in state of course. Out of state, you pay no sales tax on purchases... and currently, you not obligated by law to gather out of state sales tax.

 

[mrs.oroblanco]

Maybe I misunderstood.

I thought he said he was paying sales tax on things that he used to DO his job (materials). That, you don't have to pay sales tax on. For instance, when I buy lumber, I pay sales tax on it. If I buy lumber for the ranch, I use the sales tax i.d., and I pay no sales tax. (same with anything else bought for the ranch vs. home)

I didn't think he was talking about collecting sales tax - though, depending on the state, and on the business, sometimes you do have to collect
sales tax on the total finished product, sometimes you don't. Here, in South Dakota, you don't pay sales tax on something someone does to
your home (like a room, or a roof, or whatever), but you do on things like heat pumps, etc.

But, every state has an sales tax id exemption for contractors and anyone who is buying materials to run their business. Even fuel for the ranch
is cheaper, because the state tax is refunded in the price.

Beth

 

[mikeofaustin]

Maybe I misunderstood.

I thought he said he was paying sales tax on things that he used to DO his job (materials). That, you don't have to pay sales tax on. For instance, when I buy lumber, I pay sales tax on it. If I buy lumber for the ranch, I use the sales tax i.d., and I pay no sales tax. (same with anything else bought for the ranch vs. home)

I didn't think he was talking about collecting sales tax - though, depending on the state, and on the business, sometimes you do have to collect
sales tax on the total finished product, sometimes you don't. Here, in South Dakota, you don't pay sales tax on something someone does to
your home (like a room, or a roof, or whatever), but you do on things like heat pumps, etc.

But, every state has an sales tax id exemption for contractors and anyone who is buying materials to run their business. Even fuel for the ranch
is cheaper, because the state tax is refunded in the price.

Beth

There is also another benefit to this. If you work the job under your name, versus your company name, you can be considered a direct contractor, where you do NOT need to charge sales tax. But, if you do business in your state under your business name, then you are obligated to collect sales tax. It's only when you work in your state as a direct contractor, versus a company, do you not collect sales tax. It's a loop hole that I use. So, ... In state, work as a contractor, but out of state, as a company.

 

[mikeofaustin]

what it really comes down to, is if he is doing a job in state (most likely). He will be able to not pay sales tax on items that he paid for in state, to do the job ( hint: buy your supplies out of state). and you will not have to collect sales tax. SO, buy your supplies out of state, first off (if you don't have a tax ID). And, when you do the actual job, make sure you do it as a contractor... NOT a business. Then, you only have to pay for income federal tax. If you do it as a business, then you are obligated to collect sales tax. So, make sure you only do contract work in state under your name or SSN. NOT as your business.

!!! Out of state, as your business... In state, as an individual. !!!

I'm sure I probably confused a lot of people by this post.

 

[FarmerChick]

I had a working farm biz and had a tax exempt sales tax ID number.
I didn't pay sales tax on farm supplies ever.

remember too the Amish live simple. the paycheck they pull doesn't have to pay for cable tv, wonderful vacations, eating in restaurants, big trucks to pull campers, etc etc etc LOL
Hard to compete with someone who doesn't have the same style of living as others.
They require less and can therefore bid lower I would think.

 

[mrs.oroblanco]

MikeofAustin,

He is not talking about charging sales tax.

He is talking about BEING charged sales tax.

Beth

 

[mikeofaustin]

MikeofAustin,

He is not talking about charging sales tax.

He is talking about BEING charged sales tax.

Beth

Yes, your right. Sorry. If he has a tax ID, he doesn't have to pay sales tax, but he IS supposed to collect it and submit it. Either way, if he pays it, or they pay it, the quote for the job still has to account for that extra fee.... so in this case, the only way I can see a way out of it, is to buy supplies out of state. That way, the client nor himself has to pay sales tax. In TX, it's around 8.25%. But if I buy out of state... you get the idea.

 

[mrs.oroblanco]

MikeofAustin,

Collecting sales tax is a simple matter of "that will be $1,000 plus tax". (of course, you also have to file quarterly if you are required
to collect sales tax).

Beth

 

[mikeofaustin]

MikeofAustin,

Collecting sales tax is a simple matter of "that will be $1,000 plus tax". (of course, you also have to file quarterly if you are required
to collect sales tax).

Beth

Yep. in this case, the Amish was under quoting him by .25 percent. So he might be able to actually get a job if............ BUT, my thoughts are, that there was an inside secrete going on.... .25 percent sound very fishy to me.

 

[mrs.oroblanco]

MikeofAustin,

Are you sure you have that number correct? .25 percent? On a thousand dollars, .25 percent is only $2.50 (1/4 of 1%). I'm going to "assume" that you mean 25%, no?

Which is $250.00.

You can lower your costs by not having to pay sales tax on components - and, since the Amish live thrifty lives, they don't HAVE to charge as
much as we do for labor costs.

Sorry to say, I used to go to Amish country all the time - just because they made quality stuff at less cost. Even two of our local stores were
Amish stores. I bought cheese at much better prices in one - made right there - and I bought my veggies through the other - they went out
every morning and picked veggies - and you cannot get too much fresher than that, unless you have that particular veggie in your own garden.
They also went every two days to pick fresh fruit - best fruit in the area, and at a better price than any of our grocery stores. Everything was
vine and tree ripened.

Beth

 

[Dave44]

I do have a stipulation. It should be the law of the land that if you do not pay taxes, AND/OR if you are not a productive part of society, you have NO vote in elections.
You are not in the game if you do not have the same burdens. I say FLAT TAX. Oh man the new roles of the unemployed cpas, irs agents, who said that change is easy?
Oh yea flat tax, no exeptions. But really want to be fair? NO tax on any company, Really. Why should companies be the man that takes the money from individuals and gives it to the government, because that is how it works now. The government expects the majority of the nation not to know they are being taxed that way.