The Impact of Sulfates & Sales Tax on Pool Professionals

In this episode of the Talking Pools podcast, Rudy Stankowitz discusses important updates in the pool industry, including Fluidra's acquisition and the PHTA's support for the Swim Act. He delves into the impact of sulfate levels in pool water, explaining how they can damage pool equipment and structures. Rudy emphasizes the importance of monitoring sulfate levels and provides insights on testing methods. The conversation then shifts to the complexities of sales tax for pool service companies, highlighting the need for compliance with state regulations and the importance of separating service and chemical charges on invoices.

takeaways

• Fluidra's acquisition aims to enhance its product portfolio.
• The PHTA supports the Swim Act for water safety education.
• High sulfate levels can damage pool structures and equipment.
• Routine testing for sulfates is essential for pool maintenance.
• Sulfate levels should be kept below 300 parts per million.
• Sales tax requirements vary by state for pool services.
• Consult local authorities for sales tax regulations.
• Tangible goods sold in pool services are generally taxable.
• Separate charges for labor and chemicals on invoices to comply with tax laws.
• Understanding sales tax practices can streamline business operations.

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Transcript

Rudy (00:00)
Hey guys, it's Rudy Stankowitz with the Talking Pools podcast. Guess what? It's Friday. We made it to another one. Forgive my mess. I've been doing some remodeling, so I got some stuff all over the place. So I do apologize for that. For those of you that are watching this on Facebook, Instagram, YouTube, or whatever video platform this may appear on. For those of you listening on Apple, Spotify or Typical

Podcast platforms, you don't have to see it. Thank goodness. Ignore my mess.

We have a couple of things new in the world today that I wanted to start off with. First, Fluidra, a major player in the pool and wellness industry. They've reached an agreement with NCWG Group. This acquisition is supposed to further strengthen Fluidra's position in the market by expanding its reach and enhancing its product portfolio, potentially offering new solutions and innovations for pool professionals.

We also have the PHTA stepping up for the Swim Act. The Pool and Hot Tub Alliance has thrown in support behind the Safe Water Instruction for Minors, SWIM Act. The legislation

aims to increase access to life -saving swimming education for minors, emphasizing on the importance of water safety, which could result in the increased demand for certified pool safety professionals and compliance with water safety standards. Now, into the meat of this. I want to talk about two things today and again, two things totally unrelated, one for out in the field.

chemically. The other one let's talk about back in the office. So first I want to talk about sulfates. It's in a lot of the products we use. But is it a potential problem? Then let's jump into when and if pool service companies should be charging, collecting and paying sales tax for the products that they sell. I want to talk about both of those.

today.

But first, let's hear what Pete and our sponsor Ray Pak has to say.

So as a pool service tech, know you have to be aware, trust me, I know you have to be aware of the numerous problems that can affect the long -term integrity and performance of a swimming pool. I get it. But one overlooked factor, typically, sulfate concentration.

Sulfate ions when present in excessive amounts in pool water can cause significant damage to pool structures, equipment, and components such as the salt cell. Stonework even contribute to scaling.

high sulfate levels can exacerbate ASR. Remember we talked about that last week, alkali silica reactivity

Listen, sulfates are naturally occurring ions. They can come in through the tap or a multitude of places, even introduced through a lot of the chemicals that we use.

Low levels of sulfates? I don't care. We're not concerned with that. It's the high levels that we worry about.

because higher concentrations can lead to corrosion.

particularly in saltwater pools, and damage to concrete and stone surfaces. Understanding how sulfates react with pool water and their chemical reactions, it's crucial to preventing long -term damage.

One of the most critical areas where sulfate ions cause damage is within the salt cell on saltwater pools. Salt cells are designed to convert sodium, NaCl, right? You add salt to water, sodium dissociates into Na, which is sodium and Cl- negative, which is chloride. In electrolysis, as the water passes through that salt cell, chloride becomes chlorine gas, which then becomes hypochlorous acid, the killing form of chlorine.

And that's what does the sanitizing and disinfecting. We don't need a lesson on salt cells. I know that. I know you know how these things work.

But.

Over time, high levels of sulfates can attack the plates, the anode and cathode inside that salt cell.

process that occurs is both anodic and cathodic,

So we know chloride is oxidized at the anode and that's where it produces chlorine gas. At the cathode, water is reduced to produce hydrogen and hydroxide ions.

sulfate ions, however, significantly disrupt this process.

In high concentration, ions participate in the anodic reaction by undergoing oxidation.

This leads to the formation of sulfuric acid.

This acid accelerates the breakdown of the anode's metal surface.

the anode surface typically composed of titanium or other corrosion resistant metals through a process known as sulfate induced corrosion becomes damaged. This reaction can cause pitting wear and a decrease in the overall efficiency of that salt cell.

Cathodic reactions similarly may be impacted by sulfates as they facilitate additional reactions that degrade the cathode's metal surface. Ultimately, the buildup of sulfates can increase maintenance costs, shorten the cell's life, and lead to expensive replacements because they're gonna have to keep replacing that salt cell over and over and over again.

The ideal level for sulfate ions in swimming pool water is generally 300 parts per million or less. We don't want to see it any higher than that. Any more than that, can cause significant damage to the pool equipment or any surface or stonework upon the decking.

Ideally, want to keep the sulfate level at 300 parts per million or less. Some professionals even recommend much, much lower than that. At 300 or higher, that's when we start to see damage to surfaces and equipment occur.

If the sulfate levels exceeds 400 to 500 parts per million, the risk of corrosion is accelerated, especially in salt cells.

Regular testing and monitoring of your sulfate levels, it should be a part of your routine maintenance.

Another area where sulfates wreak havoc is on stonework and concrete surfaces, all the areas surrounding the pool. High levels of sulfate in the water can lead to sulfate attack on porous materials such as stone, grout, and yes, the concrete.

This damage occurs through a chemical process known as sulfate -induced corrosion.

In water, sulfate reacts with calcium hydroxide, which is a component found in cement -based materials. It forms calcium sulfate, which is also known as gypsum, or back in the day, we called it plaster of Paris, if any of you have ever worked with that as a kid.

The problem is, is when this forms, this plaster of Paris, this gypsum, this calcium sulfate, is it expands and it causes cracking in the walls, spalling, all the same problems we mentioned associated with ASR and concrete cancer last week.

To maintain proper sulfate levels, routine testing is going to be required. I know it's not something that we normally do. It's not like pH, alkalinity, calcium hardness, You're going to need a separate test kit for this. Specialized sulfate kits are available.

and you should incorporate them into your regular pool service water testing.

especially for salt water pools or if the pool is starting to show sulfate damage.

One of the more common methods of testing sulfates is turbidimetric, very similar to the cyanuric acid test that we perform. In this method, a reagent is added to the pool water sample, which reacts with any sulfates in the water to form a precipitant. This precipitant makes the water get cloudy. in the turbidimeter,

we can measure the degree of cloudiness. I know it's a little bit subjective, the same as the cyanuric acid test, but it's one of the better methods we have to determine whether or not we are high.

Several chemicals that we use in pool treatment can cause the sulfate concentration to increase. So it's important to understand what chemicals they are. And then especially in salt water pools, limit the use of them. So I have a list here I'm going to go through a couple with you. First, sodium bisulfate, also known as dry acid, commonly used as a pH reducer in water. While effective, it does introduce

sulfate ions as a byproduct of its dissolution.

Aluminum sulfate, one of my favorites. Used as a clarifier or a flocculant to remove suspended particles. We also use it for copper stain removal and yes, dun dun dun, cyanuric acid reduction. But it does release sulfate ions into the water.

Potassium monopresulfate, that's your non -chlorine shock. It's used to oxidize organic contaminants and prevent the formation of chloramines. Again, yes, prevent the formation of chloramines. Wayne spoke about it two weeks ago on an episode about non -chlorine shock. Important thing to understand, potassium monopresulfate will not get rid of chloramines. It's not strong enough to break the nitrogen chloride bond that occurs that makes the chloramine.

but it will get rid of a lot of the things that could lead to chloramines. So it is still helpful. And if it's part of your weekly routine, that's great. But keep in mind, every dose is increasing that sulfate part per million.

This one's in the name sulfuric acid. We know that adds a lot of sulfates to the water. Sulfuric acid is the fear from adding sulfates to the water.

great product to lower pH.

but its dissolution directly increases those sulfate levels.

So to prevent damage caused by high levels of sulfates, it's important that we 1. Limit the use of those products, especially in your saltwater pools. Start testing for sulfates. This way you can keep tabs on it.

Water replacement gonna be the best way to reduce it. Make sure that you check the sulfate level of the fill water, the tap water, to make sure it's worthwhile before you replace the water. If you have 400 parts per million of sulfate in the pool and 400 parts per million of sulfate coming out of the tap, draining and refilling the pool, the only thing that's gonna change is everything except for the sulfate levels. That'll still be the 400 parts per million. So it shouldn't be.

coming out of a tap that high, but double check it anyway, just for shits and giggles.

For those of you that run pool stores, educate your customers. Get them testing sulfate levels as well. This way.

It's their responsibility.

Teach them. them which products we're talking about. Yes, they're okay to use. They're great products. But let's keep that sulfate level well below 300 parts per million. And the only way we can do that is to monitor it.

Sulfate levels in pools, if left unchecked, can cause extensive damage to critical components like salt cells, stonework, concrete surfaces. And by understanding the chemical reactions involved, regular testing for sulfates and using alternative chemicals when possible can help us protect pool installations and equipment from costly damage.

Again, keep it below 300 parts per million and you'll have less headaches. It's vital to pay extra attention to the interaction between sulfates and the metal plates in the salt cells.

with the right approach and chemical management, this is not a problem. But right now, I know none of you are testing for it. Well, I'll say hardly anyone is testing for it. I know some of you are testing for sulfates, but we should be because there are way too many sulfate -based products in the market. Heck, even copper sulfate is increasing those levels. We need to keep tabs on that.

If you have any other questions on sulfates, hit me up, talkingpools at gmail .com. Happy to help you out anyway that I can.

Let me ask you a question.

When you sell chemicals to a customer, the bucket out of your truck, or deliver it to them, however you're doing this, do you charge them sales tax?

If you include chemicals in your service, the chemicals that you use, chlorine, pH, alkalinity adjusters, whatever you include in your service, do you charge that customer tax on that entire service visit because those chemicals are included? Those are some of the things I wanted to look at now. Should you be charging sales tax? And if you are, are you doing it correctly? Just keep in mind.

I'm a pool guy, dammit, not a sales tax expert. So do consult with your local authorities on this. If you have questions following this portion of today's show.

I guess the first question that most folks ask is whether or not they're even required to charge sales tax on the services that you offer.

The answer to that really is dependent upon your state. It varies state to state.

In some states, labor or services are subject to sales tax. For example, states like Texas, New York require tax to be charged on services that are considered taxable. In these cases, pool cleaning and maintenance would be taxed just for the service.

However, in many states, services that do not involve the transfer of tangible personal property are considered non -taxable.

In these states, you would not charge sales tax for labor.

Not for pool cleaning or pool maintenance.

Not if no physical goods are exchanged. In states like Florida and California, for example, providers are generally not required to charge sales tax on labor unless it is bundled with a taxable product, meaning I include chlorine with my service. Now that entire service needs to be taxed.

You follow? What's the cost per service for that week? Has to be taxed. Because I include chemicals that should be taxed.

But again, there's a large variance in tax laws from state to state. So do make sure that you check with your specific state's guidelines to determine whether or not the services you offer are subject to sales tax.

Check with your state's Department of Revenue or contact a tax professional. Either one should be able to help you out.

When it comes to the sale of physical goods, most states require businesses to charge sales tax on tangible property. This includes any products that you sell to your clients, such as pool equipment, accessories, parts, cleaning supplies, chemicals, et cetera. For instance, if you're selling a replacement pool pump, filter, or even smaller items like a bucket of chlorine tablets, you're gonna be required to charge sales tax on those items.

In this context, it doesn't matter whether you're a small company with just a few employees or a large operation. The obligation to collect and remit sales tax on the sale of tangible goods applies uniformly to businesses selling taxable products, period.

Cool service companies must take care to calculate the appropriate sales tax rate based on the location of the sale.

tax rates can vary significantly from one jurisdiction to another, one county to another. States like Colorado have complex tax structures where different cities or counties can impose additional taxes.

The question on whether or not you charge tax on the chemicals included in pool service gets a little bit more complicated.

Some states treat the inclusion of chemicals in pool maintenance as a taxable event, while others do not. So if you charge a flat fee that includes both the service and some chemicals, this could be viewed as a bundled transaction, which might be subject to sales tax in certain jurisdictions. For example, in Texas,

If you charge a client for chemicals as part of their pool service, part of the cost,

of service covers those chemicals, even if it's bundled with the service, it's taxable.

some states may allow you to exempt the service portion of the fee and charge sales tax only on the chemicals themselves.

Others are going to want you to include the service as well.

if you provide a pool service that includes the use of products such as chlorine, AlgaeCide pH balancers, it's important to break down your invoices to specify the charges for labor and for chemicals separately. This will help you to stay compliant with your state's tax requirements.

and prevent any misunderstandings

or penalties in case of an audit.

Once you've determined that you are required to pay sales tax, the next step is setting up a sales tax account with your state.

Most states require businesses to register for a sales tax permit before you can begin collecting taxes. This process is usually pretty straightforward, but it can vary slightly depending on the state in which you operate.

Start with visiting your state's Department of Revenue website or taxation office to find the state tax registration section.

Some states refer to this as a seller's permit or resale certificate. You need basic information about your business, including your business name, address, federal employer identification number, your FEIN, and details about the type of products or services that you're going to be offering. Once your application is approved, you'll receive a sales tax permit.

which allows you to legally collect sales tax from your customers.

Again, keep in mind, tax laws vary from state to state, and Rudy is not a tax professional. Pool guy, don't forget.

So being that laws change state to state,

It's important to register in every state that you have a physical presence, a nexus. A nexus for a single operated pool service company typically means the primary state of operation. However, if you start servicing clients in a neighboring state, you may also need to register and collect sales tax in those states as well.

After you begin collecting sales tax, the next step is to make sure that you report it properly.

you need to make sure that you remit the taxes to the state. It's not extra money for you.

Each state has its own filing requirements, Including how often you need to file and pay sales tax. For many small businesses, the reporting frequency is quarterly or monthly,

At the end of each reporting period, you'll need to submit a sales tax return. This details the amount of sales tax collected from your customers. This can typically be done online through the State Department of Revenue portal. Your sales tax return will require you to break down the sales

by jurisdiction, especially if your state has varying local sales tax rates. You'll need to provide the total amount of sales for that reporting period and the taxable amount and the amount of sales tax collected.

a small percentage of the sales tax that they collect. The state looks at it like you're helping, like you're doing a job for them, like you're working. So yes, you earn that. It's referred to as a vendor discount or a collection allowance. For example, in Georgia, businesses can retain 3 % of the sales tax that they collect up to a certain dollar amount. Just compensation.

for the administrative burden of collecting taxes.

When remitting the tax, ensure that you do so before the deadline. This way you can avoid any late fees or penalties. Most states allow you to pay the collected sales tax electronically, making it a lot easier and more efficient of a process. It's also important to keep detailed records of all transactions where taxes were collected.

States can and will conduct audits to verify businesses are complying with the tax laws.

documentation, documentation,

to charge sales tax as a single operator or small pool service company or even a large company depends on the specific services and products that you provide as well as the state in which you operate. In most cases, the sale of tangible goods such as pool equipment, chemicals, et cetera, those are going to be taxable.

the taxation of service and chemicals included in maintenance packages, that's going to vary state by state. So it's crucial to consult your state's tax regulations or seek professional advice.

Once you've determined that you need to collect sales tax, set up a tax account with the state.

That's your very first step toward compliance.

From there, it's important to stay on top of the sales tax reporting and remittance requirements.

Properly filing sales tax returns, keeping accurate records, and remitting taxes on time are all necessary to avoid costly penalties and ensure that your business remains in good standing with the state authorities. For small businesses and single operations, understanding and implementing these sales tax practices will not

only keep you compliant but will streamline your operations.

That allows you to focus on what matters most.

Taking care of those customers. Making money. Right? That's all I have for you guys this week. I know. Sulfates and sales tax. Who'da thunk?

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Have a fantastic weekend and until next time, be good, be safe.