Every state with a sales and use tax program taxes retail sales of tangible personal property. Since contractors convert such property into real estate (and realty generally isn’t subject to the tax), laws governing the timing and measure of taxes due on construction materials and fixtures can vary greatly from state to state. To further complicate matters, many states tax construction-related services as well. A contractor’s tax obligations may vary according to the types of property installed, the kinds of services provided, the nature of the purchasing entity, the structure and content of the contract, and a host of other factors. Consequently, contractors face particularly complex sales and use tax requirements, especially if they operate in more than one state.
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- Contractors as Both End Users and Retailers - California
- Construction Contractors as Consumers
- Construction Contractor Issues: New Sales Tax Resource