MaidBossPro Blog — Billing & Payments

Sales Tax on Cleaning Invoices: Set It Up Once, and Ask Your Accountant First

Sales tax is the part of billing most cleaning company owners would rather not think about. That is understandable. Whether cleaning is taxable, and at what rate, varies from place to place, and sometimes from one kind of cleaning to another. The good news is that once you know the answer for your business, the software side is simple: set it up once and let every invoice apply it the same way.

This Guide Does Not Replace an Accountant

The previous guide, Past-Due Cleaning Invoices: A Follow-Up Routine That Stays Friendly, was about getting invoices paid. This one is about getting one piece of the invoice right before it goes out.

To be plain about it: nothing here is tax advice. Tax rules for cleaning services depend on your state, province or country, and sometimes on your city or county. They also change. Your accountant or tax advisor is the right person to tell you what applies to you. What this guide can do is help you ask good questions and keep the invoice side tidy once you have the answers.

Questions to Bring to Your Accountant

Walk in with a list of the work you actually do. Your service list is a good starting point. Then ask:

• Is residential house cleaning taxable where I work? Standard cleans, recurring cleans and deep cleans may be treated the same way or not.
• What about commercial cleaning? Office and dental cleaning are sometimes treated differently from homes.
• What about move-out and post-construction cleans? Work connected to real estate or construction can have its own rules.
• Are any extras different? Laundry, interior windows or other add-ons may or may not follow the same rule as the clean itself.
• Does the location of the home matter, or the location of my business? If you clean across a city or county line, this question matters.
• Do fees count? Lockout fees, late-cancellation fees and deposits may be treated differently from the service.
• Do I need to register, and how often do I file?

Bring examples of real invoices. It is much easier for an accountant to answer “Is this invoice right?” than a hypothetical question.

Setting Up Tax Once

Once you know what applies, invoices in MaidBossPro can carry sales tax that you set up once. After that, it is added to invoices the same way every time, whether the invoice was created when the team tapped Complete or is part of a monthly statement for a commercial client.

Setting it up once matters because doing tax by hand on each invoice is how mistakes creep in. One invoice with tax, the next without, a third with last year's rate. A single setting applied consistently is easier to check and easier to explain if anyone ever asks.

If your business also works in Canada, Australia, New Zealand or the UK, MaidBossPro bills customers in their own currency. The tax rules in those places are their own, so the same advice applies: ask a local accountant before turning tax on.

Showing Tax Clearly to Customers

Customers accept tax more easily when they can see it. On the invoice, tax should appear after the line items as its own line, not folded into the price of the clean. That way a customer who sees “Every-Two-Weeks Clean $155” on your website and a slightly higher total on the invoice understands the difference instantly. More on clean invoice lines in Line Items Customers Understand: Billing the Clean Plus Each Extra.

Be consistent about how you quote, too. If your website and estimates show prices before tax, say so: “Prices shown before applicable sales tax.” If they include tax, say that. Mixing the two is a reliable way to get confused customers.

Commercial Accounts and Tax

Offices, dental groups and property managers often have their own bookkeepers who look at tax lines closely. Some may tell you they are exempt from certain taxes and ask you to remove them. Do not guess. Ask for whatever documentation your accountant says you need, and keep it with the client's records.

For clients on monthly statements, every cleaning at every location appears on one statement with each line labeled with the address. If tax treatment differs by location, that is another question for your accountant before the first statement goes out.

Keeping Records

When tax time comes, you or your bookkeeper will want totals: what was billed, how much of it was tax, and what was collected. Reports in MaidBossPro show what was billed and paid, which gives your accountant a starting point. Make a habit of pulling those numbers at the end of every month instead of all at once at year end. The routine is in the month-end review guide later in this series.

Ask First, Then Set It Once

Sales tax on cleaning is a local question with a local answer. Get that answer from your accountant, set tax up once so every invoice applies it the same way, show it as its own line, and keep monthly totals. To see how tax fits with invoices, card on file and monthly statements, visit the MaidBossPro cleaning invoicing software page.