Sales Tax FAQs

Explore commonly asked questions about sales and use tax. A great starting place to learn about fundamental sales tax concepts and general applications to business.

How Sales Tax on Construction Works for Buyers and Sellers

Sales and use taxation of construction and real property transactions can be an area of great complexity that affects more than just contractors. Whether you’re a tax professional who works for a construction company or for a business that enters…

Items Purchased for Installation on Public Highways and Freeways Not Exempt in Utah

A subcontractor’s purchases of items for installation on Utah public freeways and highways were not exempt since the items did not remain personal property once they were installed but rather, became real property subject to Utah sales and use tax.

Non-Profit’s Construction Contract Not Exempt in Texas Since Lease Was Not Sufficiently Long

A non-profit school’s lease was not considered an exempt contract in Texas since the lease was not sufficiently long in relation to the life of the improvements to the realty.

Wisconsin DOR Discusses Taxability Issues for Painting and Finishing Contractors

The Wisconsin DOR issued guidance for painting and finishing contractors on the taxability of their sales and purchases.

Home Improvement Labor Subcontracted by Big Box Retailer is Subject to Iowa Sales Tax

The Supreme Court of Iowa has ruled that installation labor for specific home improvement projects subcontracted by Lowe’s is subject to Iowa sales tax while other specified subcontracted installation labor is exempt. Lowe’s had appealed a district court’s judgement affirming…

Connecticut Updates Guidance on How Materialmen May Use Pay-When-Paid Method

Connecticut has issued an information publication, effective September 24, 2018, providing updated guidance for materialmen using the pay-when-paid method.

Company Could Issue Exemption Certificate to Purchase Materials for Construction Services Provided to Federal Government

An out-of-state company was allowed to purchase construction materials exempt from Indiana sales tax since it performed construction services exclusively for the federal government.

Wisconsin Expands Exemption for Construction Contracts

Effective December 1, 2017, the Wisconsin sales tax treatment for lump sum contracts expanded to all construction contracts, subcontractors, and to certain products sold by a subcontractor to a prime contractor.

Saskatchewan Increases Provincial State Tax Rate to 6%

Effective March 23, 2017, the Canadian province of Saskatchewan increased its provincial sales tax rate. Other changes in excise, property and income taxes were also included in the provisions.

Government Contractor in Georgia Liable for Tax on Items Used Overseas

The Georgia Court of Appeals upheld the denial of a sales tax refund sought by a contractor on items it purchased for use in the construction of facilities in Afghanistan for the U.S. government.

Washington Enacts Exemption for Construction of Buildings for Airplane Maintenance

Effective from July 1, 2016 until January 1, 2027, Washington enacted a sales and use tax exemption for charges for labor and services rendered for construction of new buildings made to an eligible maintenance repair operator.

Contract Terms Dictate Tax Treatment in Florida

Itemization of contract terms dictate tax treatment in Florida. More…

Equipment Supplier Not Liable for Tax on Sales to Contractors at Reduced Rate in Mississippi

Mississippi ruled that a commercial kitchen supplier was not liable for tax on sales to contractors at a reduced rate. More…

Oregon Authorizes Local-Level Construction Tax

Oregon authorized the imposition of local-level construction taxes, effective 06/02/16. More…

Purchases Considered Taxable Business Fixtures in Ohio

Ohio rules that a taxpayer’s purchases were considered taxable business fixtures in Ohio. More…

Wisconsin Enacts Exemption for Contractor Purchases for Certain Exempt Entities

Wisconsin created sales and use tax exemption for contractor purposes, effective 01/01/16. More…

Contractors Should Consider California Manufacturing and R&D Partial Exemption

California advises construction contractors to consider manufacturing and R&D partial exemption. More…

Texas Announces Exemption for Disaster Relief in Bastrop County

Texas citizens affected by Bastrop County wildfires can claim a sales tax exemption on labor charges to repair damages. More…

Georgia Issues Guidance on Construction Exemption for Private Colleges

Georgia issued guidance on the temporary sales and use tax exemption for construction materials used at a private college. More…

Colorado Discusses Lump-Sum and Time and Materials Construction Contracts

Colorado discussed whether a contractor was liable for sales tax on purchases for lump-sum and time and materials contracts. More…

Audio-Visual Equipment Not Classified as Building Materials in Colorado

Colorado discussed whether audio-visual equipment was classified as building materials for exemption purpose. More…

Government Contractor Liable for Georgia Sales and Use Tax on Items Purchased for Overseas Contract

Georgia ruled that a contractor was not entitled to a sales and use tax refund for items purchased for an overseas contract. More…

Machinery, Equipment and Other Items Used in Construction-Related Activities Taxable in Missouri

A taxpayer’s machinery, equipment, materials, and supplies purchases used in construction-related activities are taxable in Missouri. More…