Sales tax for locksmiths

Do locksmiths charge sales tax?

Usually, yes, at least on parts. If your state has a sales tax and you sell physical items like locks, key blanks or remotes, you generally need to collect tax on them.

Labor is a separate question, covered below. Alaska, Delaware, Montana, New Hampshire and Oregon have no statewide sales tax, although some places in Alaska charge a local one.

Are locks, keys and other parts taxable?

Yes, in states with a sales tax. Locks, deadbolts, key blanks, cut keys, transponder keys, remotes and fobs are physical goods, and states tax them as sales.

That holds even when the part is one piece of a bigger job. Put each part on its own invoice line so you and your customer can see exactly what was taxed.

Is locksmith labor taxable?

It depends on the state. Some states tax many services, including repair, installation and locksmith work. Others don’t tax labor, especially when it’s listed separately from the parts.

A few situations often get different treatment:

• Installation that becomes part of a building, such as new commercial door hardware, can be treated as construction rather than a sale.
• Lockouts, rekeys and key duplication can be taxed differently from installation work.
• Many schools, government agencies, nonprofits and resellers can buy tax-free with an exemption certificate. Keep a copy on file.

Your state’s tax department usually publishes guidance on repair and installation services. Find yours in the Federation of Tax Administrators’ directory.

Which sales tax rate applies to a mobile locksmith job?

In most states, it’s the rate where the customer receives the service. For a mobile locksmith, that’s the job site. Some states use your business location for sales within the state instead.

A rate combines state, county, city and special district taxes, so two addresses in the same town can have different rates. A ZIP code can also cover more than one rate area, so check the exact address when it matters.

How do I set up sales tax in smithworks?

Open Settings → Sales tax, turn on Collect sales tax, enter your usual rate, and choose whether services and parts are taxable by default.

1. Under Taxable by default, set services and parts to match your state’s rules. Every service and part follows these settings unless you change it on its own.
2. To change one item, open it in Services & pricing or Parts and use its Taxable switch.
3. On an invoice, tap any line to make it taxable or not for that job only.

Each invoice has its own rate. smithworks suggests the rate for the job site and for your business address from ZIP code tables updated monthly, and you confirm it. Rates are kept to two decimal places and rounded up, so 8.875% becomes 8.88%.

When only some lines are taxable, the invoice shows the tax as “Tax (8.25% of $40.00)” and marks the other lines “Not taxed.” If you don’t collect sales tax, turn Collect sales tax off and new invoices won’t have a tax line.

How do I see how much sales tax I’ve collected?

Open Settings → Sales tax report. It totals the tax on invoices issued in a month, quarter or year, broken down by rate.

The report also shows taxable and non-taxable sales and any balance still unpaid. Invoices count in the period they were issued, paid or not, and tips aren’t included. Tap Save CSV to open it in a spreadsheet or send it to your accountant.

Does Square track the sales tax on smithworks payments?

No. smithworks sends Square one amount that already includes the tax, so Square’s sales tax reports won’t show it. Use the smithworks sales tax report when you file.

For a card payment that covers the whole invoice, the item name in Square shows the tax included, for example “invoice #1042 (includes $8.25 tax).”