Idaho Issues Advice for Contractors

Effective October 1, 2008, the Tax Commission will no longer allow contractors to substitute sales tax charged to the customer on improvements to real property for the tax owed on the purchase of building materials. Since jobs such as laying carpet, installing windows, doors, wallboard, built-in appliances and furnaces are not retail sales of goods, the contractor should not charge sales tax to its customers or purchase materials tax exempt. Instead, the contractor should pay sales or use tax when it purchases materials, and charge customers a total price that includes all costs of doing business, including sales tax paid. (News, Idaho State Tax Commission, June 2008)

Posted on July 2, 2008