Broker commission for sale of home
 

Recently, I am trying to put my home for sale. Broker filled out the
sales contract and mailed out to me (I am out of town..home is in
different town). His commission shows 5% PLUS sales tax on purchase
price of the home. Is it normal practice to pay state sales tax in
addition to commission the agent is getting? Why sales tax? Do
Brokers have to pay sales tax on commission they get from the sale of
the home? Home is in New Mexico.

Right now I am renting that home and the same broker is managing the
property. He charges 10% of monthly rent plus sales tax on his 10%
commission. I was renting my home for the first time, so I thought it
was normal to pay sales tax on 10% rental commission.

Now i am trying to sell home, he is tryng to do the same. Now I
realize I should never have paid sales tax on his 10% rental
commission. can anyone tell me how should I approach this situation?
Thanks.

BKS wrote:
Recently, I am trying to put my home for sale. Broker filled out the
sales contract and mailed out to me (I am out of town..home is in
different town). His commission shows 5% PLUS sales tax on purchase
price of the home. Is it normal practice to pay state sales tax in
addition to commission the agent is getting? Why sales tax? Do
Brokers have to pay sales tax on commission they get from the sale of
the home? Home is in New Mexico.

Right now I am renting that home and the same broker is managing the
property. He charges 10% of monthly rent plus sales tax on his 10%
commission. I was renting my home for the first time, so I thought it
was normal to pay sales tax on 10% rental commission.

Now i am trying to sell home, he is tryng to do the same. Now I
realize I should never have paid sales tax on his 10% rental
commission. can anyone tell me how should I approach this situation?
Thanks.


Check with the NM comptroller's office and see if commissions are
taxable, and see he ever turned in the sales tax (the 2 are not
necessarily related.)

Bob

"BKS" wrote in message
om...
Recently, I am trying to put my home for sale. Broker filled out the
sales contract and mailed out to me (I am out of town..home is in
different town). His commission shows 5% PLUS sales tax on purchase
price of the home. Is it normal practice to pay state sales tax in
addition to commission the agent is getting? Why sales tax? Do
Brokers have to pay sales tax on commission they get from the sale of
the home? Home is in New Mexico.

Right now I am renting that home and the same broker is managing the
property. He charges 10% of monthly rent plus sales tax on his 10%
commission. I was renting my home for the first time, so I thought it
was normal to pay sales tax on 10% rental commission.

Now i am trying to sell home, he is tryng to do the same. Now I
realize I should never have paid sales tax on his 10% rental
commission. can anyone tell me how should I approach this situation?
Thanks.

Sales tax laws vary greatly from state to state but I have never heard of a
sales tax on rentals or sales of real property. Our state does require a
modest deed tax on the sale of property paid by the seller. Something like
1.00 per 1000 of valuation.

I would check this out with the local sales tax department. It sounds like
a rip off to me.

Colbyt

Is this home a manufactured or mobile home? You have to pay sales tax on
them.
"BKS" wrote in message
om...
Recently, I am trying to put my home for sale. Broker filled out the
sales contract and mailed out to me (I am out of town..home is in
different town). His commission shows 5% PLUS sales tax on purchase
price of the home. Is it normal practice to pay state sales tax in
addition to commission the agent is getting? Why sales tax? Do
Brokers have to pay sales tax on commission they get from the sale of
the home? Home is in New Mexico.

Right now I am renting that home and the same broker is managing the
property. He charges 10% of monthly rent plus sales tax on his 10%
commission. I was renting my home for the first time, so I thought it
was normal to pay sales tax on 10% rental commission.

Now i am trying to sell home, he is tryng to do the same. Now I
realize I should never have paid sales tax on his 10% rental
commission. can anyone tell me how should I approach this situation?
Thanks.

On 16 Aug 2004 17:04:02 -0700, (BKS) wrote:

Recently, I am trying to put my home for sale. Broker filled out the
sales contract and mailed out to me (I am out of town..home is in
different town). His commission shows 5% PLUS sales tax on purchase
price of the home. Is it normal practice to pay state sales tax in
addition to commission the agent is getting? Why sales tax? Do
Brokers have to pay sales tax on commission they get from the sale of
the home? Home is in New Mexico.

Right now I am renting that home and the same broker is managing the
property. He charges 10% of monthly rent plus sales tax on his 10%
commission. I was renting my home for the first time, so I thought it
was normal to pay sales tax on 10% rental commission.

Now i am trying to sell home, he is tryng to do the same. Now I
realize I should never have paid sales tax on his 10% rental
commission. can anyone tell me how should I approach this situation?
Thanks.

From New Mexico web site(www.state.nm.us/tax/trd_ques.htm). Note the last
sentence of paragraph 2.

1. What is New Mexico's sales tax rate?

New Mexico does not have a sales tax. It has a gross receipts tax instead. This
tax is imposed on persons engaged in business in New Mexico, but in almost every
case the person engaged in business passes the tax to the consumer. In that
way the gross receipts tax resembles a sales tax. See question # 3 under "Gross
Receipts Taxes".

2. What is taxable?

Generally speaking, sales and leases of goods and other property, both tangible
and intangible, are taxable. Groceries, magazines, and over-the-counter drugs
are taxable. (Prescription drugs are no longer taxable.) Unlike many other
states, sales and performances of services are taxable in New Mexico.

3. What is the gross receipts tax rate and how is it determined?

The gross receipts tax rate varies throughout the state from 5.00% to 7.1875%.
The total rate is a combination of rates imposed by:

The state,
The counties, and
The municipalities

On Mon, 16 Aug 2004 21:15:21 -0400, "Colbyt"
wrote:
Sales tax laws vary greatly from state to state but I have never heard of a
sales tax on rentals or sales of real property. Our state does require a
modest deed tax on the sale of property paid by the seller. Something like
1.00 per 1000 of valuation.

I would check this out with the local sales tax department. It sounds like
a rip off to me.


Note that the tax is on the commission, not on the sale of the property. In
this case, the commission is a percent of the sale but that doesn't always have
to be the case. New Mexico taxes "performances of services."

On Mon, 16 Aug 2004 19:16:59 -0500, zxcvbob wrote:

Check with the NM comptroller's office and see if commissions are
taxable, and see he ever turned in the sales tax (the 2 are not
necessarily related.)

The first is easily verified by checking the web site
www.state.nm.us/tax/trd_ques.htm.

The second is of no concern to the OP.

doubter wrote:

Note that the tax is on the commission, not on the sale of the
property. In this case, the commission is a percent of the sale but
that doesn't always have to be the case. New Mexico taxes
"performances of services."

Except, I bet, for lawyers.

On Mon, 16 Aug 2004 21:15:21 -0400, someone wrote:

Sales tax laws vary greatly from state to state but I have never heard of a
sales tax on rentals or sales of real property.

But the tax OP is talking about would not be on the sale or rent, it
would be on the COMMISSION. Now, I don't know if such services are
taxed in NM or not, but that is still way different from what you are
saying.

Our state does require a
modest deed tax on the sale of property paid by the seller. Something like
1.00 per 1000 of valuation.

That's known as a transfer tax or "stamp tax" as traditionally you
bought "tax stamps" to affix to the deed. Not the same tax.

-v.

On Mon, 16 Aug 2004 19:16:59 -0500, someone wrote:

Check with the NM comptroller's office and see if commissions are
taxable, and see he ever turned in the sales tax (the 2 are not
necessarily related.)

And while you might be able to find out the first, you are deluding
yourself to think you will (or can) be told the second.

We own several business and file sales tax returns in 2 states.
here's (basically) what the forms say: What are your total taxable
sales this month?

The business does not report every transaction individually. The
Comptroller would have no idea if the broker paid tax on that
particular transaction, assuming he is paying SOME tax. Now, you
could "turn him in" and ask that he be audited saying you don't think
he is turning in his tax - but why do you think this of him more than
any other person or entity? Just because you were not familiar with
the tax, doesn't mean he is any more likely than anyone else not to
turn it in.

Now sometimes people do indeed not turn in their tax. And sometimes
people do get audited. But the consumer would still have to pay the
tax.

-v.

New Mexico does not have a sales tax. It has a gross receipts tax
instead. This tax is imposed on persons engaged in business in New
Mexico, but in almost every case the person engaged in business passes
the tax to the consumer. More information can be found at
http://www.state.nm.us/tax/trd_ques.htm

Link that explains your question,
(BKS) wrote in message . com...
Recently, I am trying to put my home for sale. Broker filled out the
sales contract and mailed out to me (I am out of town..home is in
different town). His commission shows 5% PLUS sales tax on purchase
price of the home. Is it normal practice to pay state sales tax in
addition to commission the agent is getting? Why sales tax? Do
Brokers have to pay sales tax on commission they get from the sale of
the home? Home is in New Mexico.

Right now I am renting that home and the same broker is managing the
property. He charges 10% of monthly rent plus sales tax on his 10%
commission. I was renting my home for the first time, so I thought it
was normal to pay sales tax on 10% rental commission.

Now i am trying to sell home, he is tryng to do the same. Now I
realize I should never have paid sales tax on his 10% rental
commission. can anyone tell me how should I approach this situation?
Thanks.

Colbyt wrote:
"BKS" wrote in message
om...

Recently, I am trying to put my home for sale. Broker filled out the
sales contract and mailed out to me (I am out of town..home is in
different town). His commission shows 5% PLUS sales tax on purchase
price of the home. Is it normal practice to pay state sales tax in
addition to commission the agent is getting? Why sales tax? Do
Brokers have to pay sales tax on commission they get from the sale of
the home? Home is in New Mexico.

Right now I am renting that home and the same broker is managing the
property. He charges 10% of monthly rent plus sales tax on his 10%
commission. I was renting my home for the first time, so I thought it
was normal to pay sales tax on 10% rental commission.

Now i am trying to sell home, he is tryng to do the same. Now I
realize I should never have paid sales tax on his 10% rental
commission. can anyone tell me how should I approach this situation?
Thanks.


Sales tax laws vary greatly from state to state but I have never heard of a
sales tax on rentals or sales of real property. Our state does require a
modest deed tax on the sale of property paid by the seller. Something like
1.00 per 1000 of valuation.

I would check this out with the local sales tax department. It sounds like
a rip off to me.

Colbyt


Its a sales tax on services; the latest trend in our state governments'
attempt to get anything we have that the feds missed.
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