Deposit and sales tax on a quote, to the cent
Sales tax is charged only on the part of a quote that is taxed. In TailGateBid, a percent deposit is then taken on the total with the tax in it.
Work out the tax, the deposit and the balance
Never filled in for you. Leave it empty and no tax is added.
Leave it empty for no deposit.
Type the part that is taxed, the part that is not, or both. The answer shows here.
Before you ask for a deposit on work at a home, check what your state or province allows. Read two regulators' own words
One quote, worked through
An example with made-up numbers, not a going rate
Say a quote comes to $2,110.00 before tax, and $2,035.00 of it is taxed. At a sales tax rate of 7.25%, the tax is $147.54: 7.25% of $2,035.00, not of the whole quote. The quote comes to $2,257.54. A 10% deposit is $225.75 now and $2,031.79 when the work is done.
The sum, a line at a time
- Add up the lines that are taxed. Add up the lines that are not.
- Sales tax is your rate times the taxed part only, rounded to the cent.
- The total is both parts plus the tax.
- A percent deposit is that percent of the total, tax included, rounded to the cent. A deposit in dollars is that amount.
- The balance is the total less the deposit.
These are the same sums a TailGateBid quote does, so the cents agree.
Your tax rate
The calculator never guesses your rate. Sales tax rates differ by state and by city, and five states have no statewide sales tax: Alaska, Delaware, Montana, New Hampshire and Oregon (source: Tax Foundation).
This page cannot tell you which of your lines are taxed, labor included. Ask your state's revenue department.
How much to ask for
One way to size a deposit is from what you pay out before the job starts: materials you have to order, a permit, a rental you have to book. Add those up, and you have a figure you can explain to your customer.
This page gives no usual percent. TailGateBid has no figures on what others ask.
Two states' limits, in the regulators' own words
Below are two regulators' own words about a deposit on work at a home. Each is quoted exactly, with a link to the page it came from and the day we read it.
California
“If the contract calls for a down payment before work starts, the down payment cannot be more than $1,000 or 10 percent of the contract price, whichever is less, for a home improvement job or swimming pool, excluding finance charges.”California Contractors State License Board, consumer guide to home improvement contracts,
This is not legal or tax advice. Limits differ by state and province. Check yours.
Maryland
“A contractor cannot accept more than 1/3 of the contract price as a deposit, and may not accept any payment until the contract is signed.”Maryland Home Improvement Commission,
This is not legal or tax advice. Limits differ by state and province. Check yours.
Those are the only two we have read. No other state or province was checked, and a rule can change after the day we read it. Check your own before you set a deposit.
The California board's guide says more in the same paragraph, about special order materials and about contractors who hold a certain kind of bond. Read it there. The board publishes the guide in English (the one quoted above) and in Spanish (Términos del acuerdo).
A total that already has tax in it
Sometimes all you have is the total: a price you agreed with the tax included, or a receipt. Pick the second choice in the calculator, type the total and the rate, and it takes the tax back out.
The answer says "about" because of rounding. Work forward again from it and you can land a cent away.
What TailGateBid does
On a TailGateBid quote the sales tax is one named rate, and you tick each line as taxed or not. The deposit is a percent or a fixed amount, due when your customer approves.
When they approve, the deposit invoice is made for you, and the deposit comes off the final invoice. TailGateBid takes no money: you collect the deposit the way you do today, and record the payment.
TailGateBid does not check any state's deposit limit for you. That stays your job.
No price yet? First work out what the job costs you.
Where each number comes from
- A sales tax rate above 25% is turned away as a likely typing slip. That limit is ours, not any state's.
- The rate box starts empty and is never guessed: rates differ from place to place, and 5 states have no statewide sales tax. Tax Foundation, .
In TailGateBid you set the deposit on the quote. When your customer approves, the deposit invoice is made for you and comes off the final invoice.
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Sources
Related
By TailGateBid. .
A calculator works from the numbers you type. Check the answer against your own books.