TrashCanBossPro Blog — Billing & Payments

Sales Tax on Bin Cleaning Invoices: Set It Up Once and Get It Right

Sales tax is the part of billing most bin cleaning owners would rather ignore. The rules vary by state, county and sometimes city, and they do not always treat cleaning services the same way. The good news is that once you know your answer, the software can apply it to every invoice without anyone thinking about it again.

Tax Is One More Line on the Invoice

Whether you charge per visit or have customers prepay, as covered in Prepay Options for Trash Can Cleaning: Setting a Policy You Can Actually Run, every invoice may need tax. In TrashCanBossPro, invoices include sales tax, shown as its own amount below the line items.

That separation matters. The customer sees what the cleaning cost and what the tax was. Your bookkeeper sees how much tax you collected and owe. Nobody has to back tax out of a lumped-together total.

First, Find Out If You Owe It

This article cannot tell you whether your services are taxable, and neither can any software. That depends on where you work. Some states tax many cleaning services, some tax very few, and some treat residential and commercial customers differently.

Questions to take to your accountant or your state's tax agency:

• Is trash can or bin cleaning a taxable service in my state?
• Are add-ons like deodorizing taxed differently because they involve a product?
• Does the rate depend on my location or the customer's address?
• Are commercial dumpster pad cleanings treated differently from residential cans?
• Do HOAs or other customers ever qualify as tax-exempt?
• How often do I need to file and pay?

Write the answers down and keep them with your business records. When the rules change, you will want to know what you were doing before.

Set It Up Once

Once you know your rule, set up tax in TrashCanBossPro so it applies to invoices automatically. From then on, when the tech taps Complete and the invoice is created, tax is already on it. When a Monthly account's statement goes out, tax is on that too.

The whole point is to stop doing tax by hand. A rule applied by software is applied the same way on the first invoice and the ten-thousandth. A rule applied by a person on a busy Friday is not.

Different Customers, Different Treatment

If some of your customers are tax-exempt, keep their paperwork on file and note the exemption on the client so the office handles their invoices correctly. This comes up most with certain organizations and commercial accounts. Do not exempt anyone just because they asked; keep the exemption certificate if your state requires one.

Custom fields on the client are a good place to note things like an exemption certificate number and expiration date, so the next person in the office does not have to dig for it.

Monthly Statements and Tax

HOAs and property managers on Monthly statements get one statement covering every address, each line labeled with its address. Tax applies to the statement the same way it applies to a single invoice. Property managers often need to see tax separately for their own books, so having it on its own line saves you a question every month. For more on those statements, read One Monthly Statement for an HOA: Billing Every Address on a Single Bill.

Outside the US

TrashCanBossPro works in the US, Canada, Australia, New Zealand and the UK, and bills customers in their own currency. If you operate outside the US, your tax may be called GST, HST or VAT instead of sales tax, and the rules for registering and charging it are different. The same advice applies: get the rule from your accountant, set it once, and let the invoices carry it.

Keep Good Records

When tax time comes, you want to know two numbers fast: how much you billed, and how much tax you collected. Reports in TrashCanBossPro let you look back at what was billed and paid. Pull that at the end of each filing period and hand it to your bookkeeper. If anything looks off, it is much easier to fix one quarter than a whole year.

Check Again Each Year

Tax rules and rates change. Once a year, ideally before your busy season, ask your accountant whether anything has changed for cleaning services where you work. If you have expanded into a new city or county, ask about that area specifically, since local rates can differ from one town to the next. A five-minute check each year is much cheaper than finding out you charged the wrong rate for twelve months.

The Short Version

Ask your accountant whether bin cleaning is taxable where you work, set up the rule once, show tax on its own line, keep exemption paperwork on file, and pull your numbers each filing period. For more billing guides, return to the trash can cleaning billing software page.