Sales tax on estimate or add during invoice?

Do you guys add the sales tax to your estimates or add during invoicing?

Have asked a bunch of clients and have had mixed responses from all. My thoughts are when you go to the store and look at an item on the shelf, the price is before tax so it should be expected. Have had maybe 3-4 agitated clients over this in the past but not many. Just received an email from a confused client and got me thinking maybe we should start adding it on the estimate. Thoughts?

I tell my customers it will be $xxx plus tax.

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I assume you do not use a CRM to forward your estimates? My question is more so before forwarding our estimates should we have a line item showing our tax or atleast put into out T/S that it will be + tax?

No I don’t use a CRM, probably due to my Gen X upbringing. I text, call or meet in person.

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I don’t think these 2 things are mutually exclusive… My head is spinning at the crazy automations I just built between our CRM and record keeping systems to motivate the team in our Slack channel… Yep, an old guy just said that :joy:

On topic, as far as I know most states don’t tax most services. Some even allow you a sales tax exemption on consumables directly related to the performance of said service… Check your laws carefully (and watch out bc they love to change them…)

I always tell them that it will be ____ amount plus 5% sales tax.

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The vast majority of my customers are elderly. I list my estimated price, then I list the price with the tax included. Clears up any confusion for them.

What does cause confusion is that cleaning has a sales and use tax, but painting doesn’t in my state. I list the items separately and explain it to the customers. I won’t even discuss real vs. tangible personal property because that is lawyer gobblygook.

No sales tax on service in nc

80% of my estimates go out in an email with the 15% sales tax shown.

If quoting over the phone, I give the full price including tax, and say something along the lines of “that’ll be $500.25 taxes included”. I word it that way to avoid confusion and head off any questions about if I’ll take cash and not charge taxes - a lot of the older crowd still ask though.

Kentucky has 6% sales tax on most services……we collect for them.

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Thanks for the replies guys. YES we do collect and pay our sales tax (its a taxable service here) I was just unsure who includes the tax in their estimate and puts it in when converting from estimate to invoice!

I do add sales tax in estimates that’s the customers total cost for our services…

dcbrock, are you a one man company? I currently am and so is my brother (plumbing) and with just one person, the NO CRM works, in my opinion. With a team I couldn’t imagine it working.

Basically yes, ‘sole proprietor’ LLC.