Do Moving Companies Charge Sales Tax and What You Need to Know

Moving companies can be a lifesaver during a chaotic move, but have you ever wondered if you'll be hit with an extra fee in the form of sales tax? The answer is not a straightforward yes or no, as it depends on the state and local laws where you're moving from and to.

In some states, moving companies are required to collect sales tax on their services, but the rates vary widely. For example, in California, moving companies are required to collect a 7.25% sales tax, while in Texas, there is no state sales tax.

If you're moving to a state with a high sales tax rate, you may want to factor that into your moving budget. On the other hand, if you're moving to a state with no sales tax, you'll avoid that extra fee altogether.

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If you're planning a move, you might wonder if moving companies charge sales tax. Generally, New York State's sales tax is imposed on receipts from every sale of tangible personal property and certain services.

The service of transporting household goods, or a moving service, is not subject to sales tax unless the charge is included as part of the bill for the sale of taxable property or services.

A charge for general storage unrelated to moving services is subject to sales tax. This is according to the Tax Bulletin Household Movers and Warehousers - General (permanent) storage and portable storage containers (TB-ST-340).

Charges for transportation arranged by a seller of taxable property or services, and charges for the assembly or installation of taxable property, are part of the receipt from the sale of the property or services and are subject to sales tax.

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If the customer is an exempt governmental entity, the mover doesn't need to collect sales tax on its sales of taxable storage services. They just need to receive a governmental purchase order or a government contract to document the exempt sale.

If the customer is an exempt organization, they must give the mover a properly completed Form ST-119.1, Exempt Organization Exempt Purchase Certificate, to verify their exempt status. This is a requirement for the mover to avoid charging sales tax.

A charge for general storage unrelated to moving services is subject to sales tax, but a charge for transportation arranged by a seller of taxable property or services is part of the receipt from the sale of the property or services and is subject to sales tax as well.

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Sales to exempts can be a bit tricky, but don't worry, we've got you covered. If you're selling taxable storage services to an exempt governmental entity, you don't need to collect sales tax as long as you receive a governmental purchase order or a government contract.

A governmental purchase order or contract is all you need to document the exempt sale. But if you're selling to an exempt organization, they'll need to give you a properly completed Form ST-119.1, Exempt Organization Exempt Purchase Certificate, to verify their exempt status.

You can issue a Form ST-120, Resale Certificate, to a third-party storage provider if you pay them to provide the storage, but only if you're purchasing the storage for resale. However, if you pay a third party to provide storage during a period of storage in transit, that payment is subject to sales tax.

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If you're selling packing materials directly to a customer in New York State, you'll need to be registered for sales tax purposes. This includes items like cartons, boxes, barrels, covers, crates, paper for padding, bubble wrap, and Styrofoam peanuts.

As a mover, you can avoid paying sales tax on packing materials if you resell them to the customer and they become the customer's property. Just make sure to furnish the supplier with a properly completed Form ST-120, Resale Certificate.

Packing materials purchased by a mover who later resells them to the customer and they become the customer's property may be eligible for a credit or refund of tax. This is a great way to save money on your business expenses.

If you're selling packing materials to a customer who's an exempt governmental entity, you don't need to collect sales tax as long as you receive a governmental purchase order or government contract to document the exempt sale.

There are several types of moving services to consider, including full-service moves, where the moving company handles everything from packing to unpacking, and DIY moves, where you handle the packing and loading yourself.

Full-service moves can be further divided into two categories: long-distance moves and local moves. Long-distance moves involve transporting your belongings across state lines, while local moves keep your belongings within the same city or region.

Some moving companies also offer specialized services, such as piano moving and antique moving, which require extra care and attention to detail.

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Moving can be a daunting task, but with the right moving services, it can be a breeze. Local moving services can be a great option for those who are moving within the same city or town, as they often offer more affordable rates and can be completed in a single day.

Local movers typically have a smaller fleet of trucks and a more streamlined process, which can result in lower costs for the customer.

If you're moving a long distance, however, you'll want to consider hiring a full-service moving company that can handle everything from packing to loading to transporting your belongings to your new home.

Full-service movers will often provide a comprehensive moving plan, including a detailed inventory of your belongings and a customized moving schedule.

Some moving companies also offer specialized services, such as piano moving and antique moving, which require specialized equipment and expertise.

Piano moving, for example, requires a team of trained professionals who can safely move the piano to its new location without damaging it.

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Packing, unpacking, loading, and unloading goods are considered incidental to moving services and are not taxable.

Charges for packing services provided in connection with a move into or out of permanent storage are considered part of the overall moving services.

Mr. T's payment to Tom's Trucks for transportation of his antiques to the storage facility is not taxable, unlike his payment to DEF Storage for storage of the antiques, which is taxable.

The entire charge by a third party to a mover for crating an item for transport is subject to sales tax.

The charge by a mover to a customer for crating services is part of the moving services and is not taxable.

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Portable storage containers are a convenient option for moving and storing your belongings.

In New York State, renting a portable storage container on your premises is subject to sales tax. This includes charges for initial delivery of an empty container and pick-up for return.

The charge for picking up a loaded container at your location and delivering it to a storage facility is also subject to sales tax as part of a taxable storage service.

However, if you're moving a container from your location to a different location without delivery to a storage facility, the charge is not subject to tax if it's reasonable and separately stated on the bill or invoice.

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Sales tax can be imposed on the receipts from moving services under certain conditions. If a moving company includes a charge for shipping as part of the sale of taxable property or services, the entire charge is subject to sales tax.

A charge for general storage unrelated to moving services is subject to sales tax. This is according to Tax Bulletin Household Movers and Warehousers - General (permanent) storage and portable storage containers (TB-ST-340).

Charges for transportation arranged by a seller of taxable property or services are part of the receipt from the sale of the property or services and are subject to sales tax. This includes charges for the assembly or installation of taxable property.

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Moving to a new state can trigger sales tax on moving services, as seen in the case of a family who relocated from Florida to New York and had to pay a 4% sales tax on their moving costs.

In some cases, moving companies may not charge sales tax if the move is within the same state, such as a local move from one city to another in California.

If you're moving to a state with no sales tax, like Alaska or Hawaii, you won't have to worry about sales tax on your moving services.

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The sales tax rate on moving services can vary depending on the state and local jurisdiction, as illustrated by the example of a move from Texas to Illinois, where the sales tax rate is 6.25%.

Some states, like Oregon, don't have a general sales tax, but may still impose other taxes on moving services.

If you're unsure about sales tax on your moving services, it's essential to check with your moving company and local authorities to determine the applicable tax rate.

When hiring a moving company, it's essential to be aware of potential risks and take necessary precautions. Be cautious of moving companies that don't provide a written estimate, as this can lead to surprise charges.

Some moving companies may not have the necessary licenses and insurance, which can put your belongings at risk. Research the company's credentials before hiring them.

To avoid scams, look for moving companies that are registered with the Federal Motor Carrier Safety Administration (FMCSA) and have a valid USDOT number. This will give you a sense of security and peace of mind.

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Self-hauling your belongings can be a cost-effective option, but be aware that you'll be imposed a relocation tax on top of state sales tax.

This tax is factored at a higher rate, averaging around 8.5%.

Renting a truck on your own can add up quickly, so it's essential to factor in this extra cost.

You'll need to consider the cost of the truck rental, fuel, and any equipment rentals, in addition to the relocation tax.

The relocation tax is a significant factor to consider, and it's not something you want to be surprised by at the end of your move.

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When dealing with moving companies, it's essential to be aware of rogue haulers. A rogue mover is an unlicensed company that doesn't follow Department of Transportation guidelines or state-mandated rules.

These types of companies often charge unnecessary fees, including sales tax, which can add up quickly. They might even charge you for services that aren't required.

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A reputable shifter will always be licensed and transparent about their fees. You can check if a company is licensed by looking for their USDOT number or state license number.

Rogue movers like to take advantage of unsuspecting customers, so it's crucial to do your research before hiring a moving company. Make sure you're getting a legitimate service for a fair price.