June 10, 2011
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Question
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Hi Ken,
I read the articles everyday and find it very informative and enjoy the forum you provide. I already use many of your contracts and find that with a more focused approach in my business.
I had to comment on Jessica’s inquiry regarding whether they are liable for the water damage. My comment is actually a question for Jessica.
When the water detection device was installed, why wasn’t it tested? It seems to me that if the water bug was tested and signals sent to the central station, the onus would be on the client and the company that installed the water softener. The water company won’t accept responsibility as they are a municipal service and are thereby legislatively immune.
Jessica, your company is negligent, in my opinion, by not completing the installation properly by sending test signals to the central station and should accept responsibility for the $1000 water bill. You should also hope and pray that client will stay with you after not doing what you were contracted for. Nobody is perfect but that is a mistake you should never make.
Liability 101, always check your work. I certainly hope your company doesn’t install life safety devices and systems in the same manner. If you do, you better shut your doors and hide under a rock somewhere in the South Pacific.
Thanks,
Craig Wohl, CET
C.W. Security Service
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More on taxing monitoring
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Florida
My tax accountant has attempted to get concrete answers from Florida Dept. of Revenue on this subject. He gets different answers from different representatives. This has become a nightmare. Here is a brief of what we believe the state intends.
Real property improvements like a fire or hardwire security system in a building don’t get taxed to the owner, but the contractor pays tax on the parts when purchased.
A camera system with removable DVR and cameras would be charged tax at time of sale to the owner, but no tax would be paid by the contractor to wholesaler.
Until recently we’ve not charged tax on strictly service calls, but do charge tax on the same call if you use even one screw. Now we tax all service.
The rules are broken down a little more in some of the accompanying papers on Florida Dept. of Revenue site.
There are several questions that need to be looked at in the Florida tax code. One problem I see is the modern house often has hybrid hardwire/wireless “improvements to real property”. And, many companies are switching to completely wireless installations, even in new construction. Drilling holes in the modern window frame voids the warranty of most manufacturers. So what are we supposed to do, charge tax on just the wireless? For all practical purposes, the modern wireless system stays with the house for probably 20 years. I’d say that’s improvement to real property. And now we do some wireless in commercial buildings.
We should fight against being singled out from other similar industries who don’t have to pay tax on servicing.
Monitoring is simply using the lines of communication, that are already being taxed by federal, state, and local taxes. Why should our clients pay a double tax on use of their lines of communication?
It seems to be safe in Florida, when in doubt, tax, tax, tax. Do you think they’ll ever send us back money we turn in for tax, and ask us to return it to a client, because we made a mistake interpreting this difficult code? My professional accountants for 23 years still pull their hair out, trying to interpret the Florida sales tax code.
Signed: Just trying to do the right thing, Ray
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RE: Georgia’s Tax Situation
For 52 years we have charged sales tax on the materials installed for our burglar and fire alarms. We do not charge sales tax for any labor. We are not charging sales tax for our monitoring “labor” as well. While we are monitoring our alarms at our central station (which is a 3rd party central station in the state of Florida) this certainly is construed as pure labor. We are simply performing a labor task for our clients on a monthly basis.
Do you have any thoughts about what I’ve said. Do you have any additional information you can help us with, without us going to our Georgia Sales Tax Revenue sponges? HaHa
Thank you,
Counte Cooley
Electronic Sales Company