What would you do?

[SuperiorDG]

Okay so I quoted a customer the other day on a project. He likes us and wants to do business with us. The problem is a competitor's bid is lower then mine. He is nice enough to email this other bid to look over and explain to him what's the difference. The bid is put together in a Quickbooks format so I know what I reading. My competitor has his tax as "Out of State Sale"and is thus not charging sales tax. I tell customer this and he calls said competitor and is told yea that is correct and not to worry about it. Customer fells it's okay because he is doing nothing wrong. I don't think I'll get the job because of this. The problem is is that this competitor is surely doing this on all is quotes and invoices. So here I am being undercut on all my bids by 7.6%. I'm also wondering how much business I've lost because of this BS.

So here's my problem: do I go to the city tax office and turn his ass in or not?

[RCCrawler]

So here's my problem: do I go to the city tax office and turn his ass in or not?

Turn him in for what, not putting tax on a quote? We get quotes here all the time that don't have tax on them. He hasn't done anything wrong until he bills them and doesn't turn over the proper amount of tax on the purchase.

[kidicarus13]

Only if you can prove your competitor is not collecting taxes. I would say that just because it is not listed on the bid does not mean it is not collected at some point. Or maybe they're a shady company and make it a practice to inform the customer that they need to pay sales tax after the job is complete. It's hard to say.

[TFOGGER]

Colorado Department of Revenue does not look on tax evasion with favor...jus' sayin'...

If the competitor operates a business licensed in CO and fails to collect sales tax (and include it as a separate line item on invoices), the state WILL go after him. One of my competitors years ago got snagged up in this, as they "included" sales tax in their pricing, but misreported it to DoR. I ended up buying some of their assets at a tax auction several months later...

[bellavite1]

Turn his ass in.
Make sure you point out to the customer that "don't worry about it" is not a valid answer and obviously your competitor ethics are lacking.
Does he really want to do business with somebody like that?
When somebody tells me they found a cheaper price on espresso coffee equipment online I point out that most likely they will not be offered a warranty, while our company, being local, guarantees support and service to our customers.

[sniper7]

I'd let somebody know about it, or figure out how he is doing it and do the same thing yourself.

[SuperiorDG]

Turn him in for what, not putting tax on a quote? We get quotes here all the time that don't have tax on them. He hasn't done anything wrong until he bills them and doesn't turn over the proper amount of tax on the purchase.
Just to clear up what I said. The tax was listed as zero. This was the bottom line price. He was not collecting the tax.

[Great-Kazoo]

Did he include any permit fees? Split the difference of say 3%. tax not incl. Then inform the customer how long you have been in business vs the "competitor".

[BUC303]

I work in a market where we have to competitively bid projects, I would turn him in in a heartbeat. It's hard enough to stay competitive with people who don't cheat the system.

[RCCrawler]

Just to clear up what I said. The tax was listed as zero. This was the bottom line price. He was not collecting the tax.

Gotcha, that makes a difference

[hatidua]

Without records, post-job, showing no tax was PAID by vendor, this is all conjecture....at best.

[ChunkyMonkey]

Eat the 7% to win this client, then contact that competitor as a potential client and ask for a quote for first hand. Whatever you decide to do, always keep potential clients out of the picture. Now a days, one bad public review can ruin you.

[ChunkyMonkey]

PS..are you on 44th? I have been meaning to leave you a good feedback for the bathroom glasses.

[kidicarus13]

Just to clear up what I said. The tax was listed as zero. This was the bottom line price. He was not collecting the tax.

Why are you so stuck on that $0 was listed for tax? So maybe he builds the tax into his quote. Unless you can prove that he does not collect tax, it's just a piece of paper.

- Dealer A selling NIB Colt 1911 lists it as $750 = tax
- Dealer B selling the same pistol and lists it as $750 out-the-door

It does not mean that Dealer B is not collecting sales tax. Even if Dealer B lists on his price tag "NO TAX", as long as he is paying taxes to who he is required to pay taxes to.

[Ah Pook]

I'd be incline to drop a dime to the proper city/county/state department. If he is claiming "out of state" taxing on work he does in state, that is not right.

As a consumer, if a business told me this, I would walk away. If he is willing to screw the tax man, who else is he willing to screw?

[hatidua]

I had a tax issue that mirrors some of this a couple of decades back: the state tax board (board of equalization as I recall) couldn't get their math/calculator to work and the errors were ALWAYS in their favor (shock!). As such, I no longer took advantage of the non-taxable feature that is extended to resale products for businesses and chose to eat the tax and save myself the aggravation. Just mark up the product/service and move on.

The vendor, in the case the OP describes, can write up the invoice anyway they choose, the only issue is whether or not they pay the tax on revenues they take in, and the OP has no way of knowing whether or not they are in compliance or not.

Now, you can be a typical little American and go tattle about something you may or may not know all the details about (hell, sue, that's the norm now), or you can win the contract on your product/service.

I long ago gave up on trying win on cost, someone will always undercut you. Win on what you provide, not being $.01 less than the next guy.

[Great-Kazoo]

Unfortunately, i am in the minority, against contacting anyone regarding business practice of any competitor. UNLESS they used the remodeling job as a front for a meth lab.

[SuperiorDG]

Unfortunately, i am in the minority, against contacting anyone regarding business practice of any competitor. UNLESS they used the remodeling job as a front for a meth lab.

Thanks for the advice guys. I think I'll have to let it slide because I'm not 100% sure and I have this karma thing that tells me it might take care of itself or come back at me somehow. [Beer]

[Irving]

Happened all the time when I was an agent. We would quote the TOTAL price, and other people would quote without all the included fees. We would tell people that's what they were doing, but they didn't care. They'd just end up paying more when it came time to sign the papers, but they were already there and it was too late by then.

[brutal]

Turn his ass in.
Make sure you point out to the customer that "don't worry about it" is not a valid answer and obviously your competitor ethics are lacking.
Does he really want to do business with somebody like that?
When somebody tells me they found a cheaper price on espresso coffee equipment online I point out that most likely they will not be offered a warranty, while our company, being local, guarantees support and service to our customers.

I would have to consider if I wanted to do business with a client that also may be complicit in cheating on taxes. Make it 100% clear that you will not compromise your ethics for the sake of a sale. If it's not gonna break the business, I'd walk away.