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