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Do Lawn Care Companies Charge Sales Tax In Texas

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Why Is Landscape Edging Important To Install

LAWN CARE BUSINESS TIPS [How to Sell Additional Services]

Landscape edging is a key element to a well-maintained lawn.

Edging creates a clear and attractive line separating the grass from garden beds.

There are many different types of lawn edging materials, and if youre having edging professionally installed the cost will depend upon the linear feet of edging installed, and the material youll use.

Popular types include stone, wood, plastic, concrete, or brick.

Landscape edging usually costs between $700 and $1,700, installed. Again, the size of your property and the type of edging youll use will impact how much youll pay.

Either Stay Small Or Scale Up The Right Way

Russell keeps his service area small by design.

Most million-dollar companies only have a 10 to 14% margin because they have a lot of overhead. However, he says that companies who do less than $2,000,000 worth of business annually have a 50% to 60% profit margin.

If youre a small company and your profit margins are less than 50 to 60%, youre doing something wrong.

Thats why he doesnt want to get too big.

Although there are advantages to staying small, you can scale up if you do it right. No matter how big you get, stay lean. Heres a video weve done on that topic:

As you grow your business, you might have the desire to branch out into more directions. Thats what Russell is doing right now.

He has big ambitions, and he has plans to give his company a makeover:

You might start out with a broom and a single push mower. But, if you do fantastic work and continue to rake in the cash, theres no telling how high you can fly.

The skys the limit!

Is The Texas Sales Tax Destination

Texas is a origin-based sales tax state, which meanssales tax rates are determined by the location of the vendor, not by the location of the buyer. The origin-based method of determining sales tax is less complicated for vendors than destination-based sales tax, because all in-state buyers are charged the same sales tax rate regardless of their location.

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Materials Supplies And Equipment

Give a resale certificate to the supplier when purchasing fertilizer, plants, flowerbed edging, herbicides, and processed dirt, sand and gravel used in taxable landscaping or lawn care. These materials are transferred to the care, custody and control of your customer as part of your taxable service. When landscaping a new residential structure for a contractor or homebuilder, keep in mind the difference between lump sum and separated contracts in paying or collecting tax on these materials.

You must pay sales tax on the supplies and equipment used in landscaping and lawn care. There is no exemption for the purchase or rental of wheelbarrows, lawn mowers, string trimmers, gloves and other equipment, tools, and supplies.

What Is The Growth Potential For A Lawn Care Business

Getting Started  The Essentials  The Market at Sawyer Yards

Many operations start out with a single person, perhaps one helper, and a single pickup truck. The ability to expand depends on the acquisition of more equipment and being able to hire more crew members.There are very large commercial companies in this business that serve an expansive area. There are national companies as well. Realty Biz gives a list of the top 50 lawn care companies in the USA. TrueGreen is the largest lawn care company in America. They are headquartered in Memphis and serve over 1.7 million residential and commercial customers from multiple locations across the country. If you add landscaping services, ValleyCrest Landscape Companies is the biggest in the USA with international operations also. They have over 100 locations, more than 10,000 employees, and earn over US$1 billion in revenues each year.

Not sure if a lawn care business is right for you? Try our free Business Idea Generator and find your perfect idea.

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What Makes Lawn Care And Landscaping Nontaxable In Texas

Lawn care and landscaping are nontaxable when done by a self-employed individual who: 1 does the actual lawn care or landscaping services 2 has no employees, partners or other persons providing the services 3 has gross receipts from the services of $5,000 or less during the most recent four calendar quarters.

What Happens During A Typical Day At A Lawn Care Business

The days start very early. Before going to the customers job sites, the equipment needs to be inspected and to make sure it is in proper working order. Typical activities of this type are cleaning the mowers and sharpening the cutting blades. Additionally, all equipment that uses gasoline needs to be filled with a mixture of gasoline and the appropriate amount of oil required. After all the equipment has been checked, the trucks are loaded and the crews are assembled and given the days job orders that have been prepared in advance.The rest of the day is spent working at customers job sites. Naturally, any problems that come up, like truck breakdowns or equipment troubles, need to be dealt with. When the crew return to the office, they should fill out a report of the work completed, making note of any special conditions or requests by the customers. This information is added to the system for billing purposes, and to help in the preparation of future job orders for those customers.At the end of the day, equipment should be cleaned and checked for damage to see if it needs repairs. For some owner/operators, these can be very long work days, until they can hire enough crew to reduce their workload.

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Avoid Lawn Care Price Increases During Selling Season

The worst time to raise prices is when all of your competitors post ads and try to steal your clients.

Try to raise prices only near the end of or after your mowing season. As a good general rule of thumb, many lawn care owners increase their prices during the end of summer or beginning of fall.

The only exception here is for no-profit or low-profit clients. In which case, feel free to raise your lawn care prices on these zero or minimal profit clients whenever.l

Know Your Operational Costs

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Your lawn care business costs money to run, and everything you do, from sunup til sundown, drinks some of your revenue.

So, find your operational costs:

  • Fuel
  • Equipment Maintenance
  • Cost of Labor

For example, if you offer lawn mowing services, you need to factor in the cost of materials and material transportation.

Add up all of these costs. Then, you’ll have a baseline dollar amount that must be made on every job to break even. By the way, you can easily find this information using Service Autopilot.

But heres the good news because you know you get to keep every dollar after this number. The key is to figure out what the perfect profit margin should be

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Lawn Care Sales Tax Regulations Vary By State

Like carrying liability insurance for your lawn care company, the laws around taxes vary by state.

Sales tax normally applies to all sales of goods and services that are exchanged for monetary value. Though these tax rules can vary widely from state to state. It is safe to assume that all lawn mowing services are taxed unless the states tax rule states otherwise.

For example, cutting grass in Chesterfield, Missouri, may yield a 7% sales tax, while cutting grass in Belleville, Illinois may only yield a 5% tax rate.

Because of the complex nature of taxes, providers should double-check and become familiar with the tax regulations of the states in which business is conducted.

See If You Need To Be Licensed

Each state has its own criteria for whether you need to obtain a license for your lawn business.

To make it more complicated, you might need local licenses as well. So, you might have to take a trip to city hall and contact your states Secretary of States office to get the licenses you need.

Occupational License

Some municipalities require businesses to also get an occupational license, which is usually based on how much revenue you generate in a given year.

For example, in Fairfax County, Virginia, if you make more than $10,000 youll have to pay a flat fee of thirty bucks for your occupational license. If you earn anywhere from $50,000 to $100,000, the amount you pay goes up to fifty dollars.

You can search the Small Business Administrations website to determine the requirements in your state.

Fertilizer Applicator Certification

If youre fertilizing your clients lawns, you might need a fertilizer applicator certification.

The Environmental Protection Agency sets the guidelines for herbicide and pesticide applicators. However, every state sets its own regulations. Some states require that you complete one or all these things to get a lawn care applicator certification:

  • Passing a written exam
  • Passing a performance-based exam
  • Using other standards approved by the EPA

You can find out what the policies are for your state by checking out its Department of Agricultural Resources website.

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Get Your Lawn Care Website Ranked On Google

You need robust SEO, so youre not steamrolled by your competitors. Ensure youre sending the right SEO signals by prominently displaying your branding and logo on your site.

Your site also needs to be mobile-friendly. Thats because more than half of all local searches are mobile searches.

Keywords

Choose the right targeted keywords for your business. These are the ones that are going to be the most profitable. Its better to focus on long-tailed keywords because theyre easier to rank for.

You need to understand the intent behind using the keyword. This is why a user is searching for that particular term.

For example, if a searcher types lawns into the search box, he could be looking for all kinds of things. Several that come to mind include the history of lawns, how to take care of a yard, or why my lawn is better than my neighbors.

But if he typed in best lawn care near me, you know hes looking to hire somebody to do his lawn.

This will be a potentially lucrative keyword for you to use.

Business listings such as Google My Business are essential. A GMB listing can help you rank on Google and snag new customers for your lawn care business.

Thats why you need to optimize your GMB profile and keep it updated.

Local backlinks are important too. Ask business partners, local business directories, and local news outlets to link to your business.

Google Ads

One of the most fantastic things about it is the ultra-specific microtargeting you can do.

Create Your Business Plan

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Suppose youre ready to transform your nebulous idea for a lawn care business into a glorious reality. In that case, youre going to need a business plan.

Youll use your plan as a detailed outline to get you where you are right now to where you want to be. Its a must for all business owners who want their company to thrive.

Having a business plan means youll accomplish your entrepreneurial objectives sooner rather than later. Itll help organize every detail of getting your business off the ground, exponentially increasing the chances that your lawn care business will be a smashing success.

If you dont need a bank loan, your business plan can be short, sweet, and to the point.

Just remember:

Your lawn care business plan should accommodate your needs, and not the other way around.

Have it be a reflection of you in all your wonderful uniqueness.

According to the Small Business Administration website, there are two categories of business plans:

  • Traditional
  • Lean startup

Traditional business plans are what most entrepreneurs use, and they require a ton of detail and work. They can get so convoluted and complicated, that they can be dozens of pages long.

Lean startup business plans are far less structured because they focus like a laser-guided missile on only the most essential facts.

They can be completed in sixty minutes or less, and are usually no longer than a single page. Heres an example of one.

Here are some of the sections you might want to include:

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Pest Control & Fertilizer Application

The application of herbicides, pesticides or fertilizers within the state of Kansas is a taxable service. Anyone applying herbicides, pesticides or fertilizers in, on or around homes, businesses or commercial property for a fee must charge their customer Kansas sales tax. No Kansas sales tax is due on the application of chemicals, fertilizers, or other substances on agricultural property.

The rate of sales tax due is the rate in effect where the application is made. For a complete list of current sales tax rates for all taxing jurisdictions in Kansas see, Publication KS-1700, Sales Tax Jurisdiction Code Booklet. This publication, as is all publications, is available from the Kansas Department of Revenues web site: www.ksrevenue.org.

Sales tax should be charged on the total amount charged the customer for applying the herbicide, pesticide or fertilizer, to include trip charges, fuel surcharge, etc., including fees charge for application at a residence.

The applicator may purchase the herbicides, pesticides or fertilizers intended for application exempt from Kansas retailers sales or compensating use tax with a Kansas Resale Exemption Certificate. See Publication KS-1520, Kansas Exemption Certificates.

Purchase of equipment or machinery to apply said herbicides, pesticides or fertilizers is subject to Kansas sales or compensating use tax.

Find A Business Mentor

One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.

Having a support network in place to turn to during tough times is a major factor of success for new business owners.

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Next Decide What Additional Services Youll Offer

Lawn care professionals do much more than mow lawns. Depending on the time of year, you might also:

  • Do a spring or fall yard cleanup.
  • Test soil levels.
  • Weed flower beds.
  • Trim shrubs.

You should offer each of these services at a different price, based on time and effort. Similar to lawn mowing, it helps to investigate how much other lawn care companies in your area charge. Then, make a price list based on:

  • How long youve been in business.
  • Where you do business .
  • If you work with commercial or residential clients.
  • The size of the property.
  • How much you need to earn to generate a profit.
  • Whether or not you have business insurance

Every State Taxes Services In Its Own Way

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This guide is designed to provide an overview of the complexity of sales tax on services by state.

Five U.S. states do not impose any general, statewide sales tax, whether on goods or services. Of the 45 states remaining, four tax services by default, with exceptions only for services specifically exempted in the law.

This leaves 41 states and the District of Columbia where services are not taxed by default, but services enumerated by the state may be taxed. Every one of these states taxes a different set of services, making it difficult for service businesses to understand which states laws require them to file a return, aswell as which specific elements of their services are taxable.

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Tree Trimming & Removal

Tree trimming and tree removal means the removal of any portion of a tree in whole or in part, including branches, trunks, and stumps. Tree includes any woody perennial plant, including shrubs with main stems or trunks made of wood.

The sale of any wood derived from a tree trimming or removal service, such as for sale as firewood, constitutes the sale of tangible personal property. When providing tree trimming or removal services and retaining byproduct from the service for later sale, the service is not provided as a sale for resale the service provider must charge tax on both the tree trimming/removal service and the later sale of any byproducts derived from the performance of the service.

Protect Your Lawn Care Business From Potential Liability

Since the best clients care about lawn care businesses being licensed, bonded, and insured, they’re willing to pay more for your lawn care services.

Plus, mistakes happen and just one lawsuit can break your business.

In other words, you have zero excuses to avoid it, and you NEED to get your lawn care business licensed, bonded, and insured BEFORE you service another property.

Plus, if you’re licensed, bonded, and insured, you can easily charge more for your lawn care service.

After all, the best clients don’t want to hire a lawn care business that doesn’t protect itself.

To find out more about protecting your lawn care business, read our complete guide.

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Step : Register For Taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It’s really easy and free!

You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.

Learn how to get an EIN in our What is an EIN guide or find your existing EIN using our EIN lookup guide.

Small Business Taxes

Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation .

You can learn more about small business taxes in these guides:

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

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