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Old 08-10-2004, 11:26 AM   #1
sygyzy
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Default Can labor (ie mechanic, plumber, etc) be taxed?

I was always under the belief that labor cannot be taxed. I am not talking about wages but labor. Like if you take your car to the mechanic and they charge you for parts and labor, only parts should/can be taxed.

I ran into an interesting situation last week. I went to get a picture framed and they did not itemized the charges. It was basically a one line charge then it was taxed. I asked them how labor plays into it and they said that labor was part of the charge. Then I was charged tax on it.

Doesn't this mean that labor was now taxed?

Isn't this illegal?
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Old 08-10-2004, 11:40 AM   #2
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Default Can labor (ie mechanic, plumber, etc) be taxed?

It's different for each state, but usually there are instances where labor can be taxed. For example, sales tax info states that:

Quote:

Services employed in manufacturing, assembling, fabricating, or processing products, even when the customer provides the raw materials, tools, or equipment. Examples of taxable labor include developing photographs, producing artwork, printing, calligraphy, custom sewing or tailoring, catering, and assembling products such as toys, furniture, or equipment.
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Old 08-10-2004, 12:08 PM   #3
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Default Can labor (ie mechanic, plumber, etc) be taxed?

Couldn't they just say something like if the total was $100; $90 was parts with tax and $10 was straight labor costs?

Just give it up. It makes no real difference.
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Old 08-10-2004, 12:22 PM   #4
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Default RE: Can labor (ie mechanic, plumber, etc) be taxed?

Sure they could say that but it'd be obvious they are lying. It's the principle.
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Old 08-10-2004, 12:25 PM   #5
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Default Can labor (ie mechanic, plumber, etc) be taxed?

Don't ALL products take some labor to produce, transport to the store, and sell? Using your logic, ALL products would have to be itemized and then you only pay tax on some portions. People will start demanding that McDonald's burger was 11.9% labor thus they deserve 11.9% of the sales tax back (in the states where fast food is taxed).

The laws vary from state to state, but in most cases the state requires you to pay sales tax for labor with a few exceptions for services like mechanics.
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Old 08-10-2004, 12:26 PM   #6
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Default Can labor (ie mechanic, plumber, etc) be taxed?

each state decides which services are taxed and at what rate

some tax at the same rates as goods, others not

it just depends
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Old 08-10-2004, 12:29 PM   #7
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Default RE: Can labor (ie mechanic, plumber, etc) be taxed?

Since it would be to the store's advantage to avoid you paying tax, I doubt they were going out of their way to make you pay more.

Where I live, labour is taxed less than goods, but I have no idea in other places.
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Old 08-10-2004, 12:34 PM   #8
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Default Can labor (ie mechanic, plumber, etc) be taxed?

Quote:
Originally posted by: dullard
Don't ALL products take some labor to produce, transport to the store, and sell? Using your logic, ALL products would have to be itemized and then you only pay tax on some portions. People will start demanding that McDonald's burger was 11.9% labor thus they deserve 11.9% of the sales tax back (in the states where fast food is taxed).

The laws vary from state to state, but in most cases the state requires you to pay sales tax for labor with a few exceptions for services like mechanics.
I don't think you quite get the question. First of all, I am not suggesting something radical or unbelievable. In some states labor cannot be taxed. This is fact. I was just asking for clarification in situations where they don't itemize it.

There is not a case of "using your logic" here at all. Your example is absurd but I think it's probably due to your misunderstanding of my question/argument.

I will reiterate that I am not talking about buying a pre-made product. I am talking about a situation like getting your car fixed, a sink installed, a picture framed. In the cases where there is a clear seperation between parts and labor. I am not talking about buying a computer or McDonald's.
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Old 08-10-2004, 12:36 PM   #9
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Default RE: Can labor (ie mechanic, plumber, etc) be taxed?

Yes


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Old 08-10-2004, 12:38 PM   #10
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Default RE: Can labor (ie mechanic, plumber, etc) be taxed?

Local laws apply. Here we have a GST (goods and services tax) and a PST (provincial sales tax). The PST applies to things, GST applies to any sale. That is any good or service (read: labour) provided. So it depends on where you are.
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Old 08-10-2004, 12:47 PM   #11
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Default Can labor (ie mechanic, plumber, etc) be taxed?

Quote:
Originally posted by: sygyzy
I don't think you quite get the question. First of all, I am not suggesting something radical or unbelievable. In some states labor cannot be taxed. This is fact. I was just asking for clarification in situations where they don't itemize it.
Ok then, first things first. What state do you live in, and does it allow sales tax on labor?
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