We frequently are given the opportunity to review competitors' proposals, estimates, or invoices and have often wondered why these other companies apply Pennsylvania sales tax to most, if not all, of their services. This blanket and indifferent approach to charging sales tax may often be easier on the vendor but it is not fair to the customer. Unfortunately, we see these mistakes consistently in billings prepared by both the local and National franchise vendors alike. Even Insurance Claim Representatives, unfamiliar with the sales tax laws and relying on the local vendor for this expertise, often include sales tax inappropriately in their claims payment proposals as well.
From the beginning, Disaster Blaster has completed its due diligence by researching the applicable law to ensure that our company complies with all aspects of the law, while at the same time making sure that our customers are not paying more than they should. Accordingly, Disaster Blaster has charged, and will continue to charge, sales tax only on those services where it is appropriate and necessary to do so. Quite frankly you should know that only an extremely small percentage of the services rendered by a property Mitigation / Restoration or Indoor Environmental professional are subject to the Pennsylvania sales tax. It is the vendor's responsibility to read, know and understand the law so that they can operate their business legally, while at the same time, not require their customers to pay for their uninformed actions.
Further, it is important for you to know that this can be a problem regardless of the estimating software that the vendor is using. The companies that provide the estimating software do not take any responsibility for adherence to local sales tax laws. Even the most common estimatics software used by the Insurance Industry, Xactimate, places its users on written notice that it takes no responsibility for adherence to sales tax laws and that it is the individual vendor's responsibility to make any adjustments to the program to ensure compliance to these laws.
Why is this important to you? On a Water Damage billing of between $2000.00 to $5000.00, you or your customers could be paying between $120.00 to $300.00 in unnecessary sales tax. If you are not using Disaster Blaster for your services, unfortunately the likelihood is great that your customers are already paying these unnecessary costs. It is like asking the customer to pay another insurance policy deductible!
In conclusion, you should be aware that Disaster Blaster recently underwent a routine field audit of our tax records by auditors from the Commonwealth of Pennsylvania. This was an extensive review of our company and its compliance with the state's tax laws. As a large part of this audit, our billings for services covering the past three years were reviewed extensively to ensure the proper application and billing of the Pennsylvania sales tax. Disaster Blaster is pleased to inform you that the auditors found no areas of deficiencies in our application of the law.
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