Forums | Home Repair | Home Improvement | Painting | Interior Decorating | Remodeling | Landscaping


Go Back   DIY Chatroom Home Improvement Forum > Home Improvement > Building & Construction

CLICK HERE AND JOIN OUR COMMUNITY TODAY...IT'S FREE!

Reply
 
Thread Tools Search this Thread Display Modes
Old 08-14-2007, 08:55 AM   #1
Newbie
 
Join Date: Aug 2007
Posts: 2
Share |
Default

Cost plus expense?


If a cost plus arrangement of 20% is used for a remodeling job, should the 20% factor be used against sales taxes or, should taxes be added after calculating the 20%?

Thanks for your input!
grunti39 is offline   Reply With Quote
Old 08-14-2007, 01:06 PM   #2
Member
 
Join Date: Apr 2007
Location: Electric City wa
Posts: 272
Default

Cost plus expense?


Never actually had any experience with this but it seems to me the 20 percent should be before taxes.
warnerww is offline   Reply With Quote
Old 08-14-2007, 04:31 PM   #3
Member
 
Join Date: Mar 2007
Location: Long Island, NY
Posts: 9,519
Default

Cost plus expense?


Are you speaking about the cost of materials? The markup varies. The way a contractor figures it varies. And at no time do I explain the estimating process to the customer. It's none of their business.
They tell me the specifics of the job and I give them a bid. If they don't like it they can go somewhere else.
Do you think Home Depot is going to explain how to you how they price a Kohler sink?
Ron
Ron6519 is offline   Reply With Quote
Old 08-14-2007, 08:30 PM   #4
Remodeler
 
MinConst's Avatar
 
Join Date: Nov 2004
Location: Spring Hill FL.
Posts: 436
Default

Cost plus expense?


Ron is right on. But I will try to elaborate. Cost plus is normally used because a contractor puts out x amount of money. If he pays sales tax on the product he is putting x+tax out of his pocket to pay for your products. So figuring x plus tax plus is reasonable if that is how the contractor figures his price.
He should not have to explain this to you if you are the customer.
__________________
Minichillo's Construction
I will never leave you hanging!

To view links or images in signatures your post count must be 10 or greater. You currently have 0 posts.


To view links or images in signatures your post count must be 10 or greater. You currently have 0 posts.
MinConst is offline   Reply With Quote
Old 08-14-2007, 11:23 PM   #5
Member
 
Join Date: Apr 2007
Location: Electric City wa
Posts: 272
Default

Cost plus expense?


How many experienced contractors say I will charge you cost plus. These are the guys who are not sure what they are doing. I am a DIY guy and have worked for licensed contractors. I have given thought into the business and cost plus is the easy way out. If this is the way you get an estimate you should be careful. I do still believe cost plus should still be before taxes.
warnerww is offline   Reply With Quote
Old 08-22-2007, 04:07 PM   #6
Newbie
 
Join Date: Aug 2007
Posts: 2
Default

Cost plus expense?


I appreciate each of your inputs! A premium (cost plus) for materials and labor is understandable but when it is used on top of taxes it becomes in effect tax on tax. The ultimate consumer pays the tax but should not be charged more than is bound by regulation. Been audited too many times I guess! A price agreed to up front is the best way to go for all concerned.
grunti39 is offline   Reply With Quote
Old 08-22-2007, 06:44 PM   #7
Eibwen
 
Join Date: Mar 2007
Location: Virginia Beach, Va
Posts: 849
Default

Cost plus expense?


If you are not tax exempt for the materials then the tax should be included in the total cost of the job and marked up accordingly. You have carrying cost to front the money on the tax until you get paid the same as you do on material.
Sammy is offline   Reply With Quote
Old 08-22-2007, 10:05 PM   #8
Cabinet Installer
 
Dansbell's Avatar
 
Join Date: Jul 2007
Location: Medford OR
Posts: 57
Default

Cost plus expense?


I have worked on several cost plus projects. They can be a very positive partnership. We did renovations for a national retailer where each project was different as to size and scope but the final product similar. We agreed to a cost plus relationship where we managed the construction project for the owner. It worked out well for both of us. As far as sales tax - It Depends. If you purchase materials from the hardware store and pay tax on it then I believe we added our % to the total price. Many times we purchased goods wholesale and had to figure the tax and report it to the appropriate state. When this happened our invoice showed the goods with the added % and then the tax that was reported to the state. Tax was never part of the profit.
Luckily for me this is something I do not deal with much any more, as I live and work in sales tax free Oregon.
__________________
Daniel S. Bell
Belbuilt, LLC
Cabinet Installation Medford, Oregon

To view links or images in signatures your post count must be 10 or greater. You currently have 0 posts.
Dansbell is offline   Reply With Quote
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Addition "shell" cost per square foot - is this reasonable? ourzoo Building & Construction 21 12-20-2011 05:22 PM
new home foundation cost wdsfr1968 Building & Construction 8 03-03-2010 10:59 AM
New house purchase - work needed - how much will it cost? mchu6am4 Building & Construction 1 03-10-2007 06:10 AM
Covered Patio Cost? RBPD5015 Building & Construction 2 04-23-2006 11:32 AM
new home cost jlandry Building & Construction 1 01-21-2006 11:15 PM




Top of Page | View New Posts

Copyright © 2003-2014 Escalate Media. All Rights Reserved.