Effective July 1, 2004, several law changes will directly affect the taxation of contractor labor charges. The changes include the following: (1) Contractors will be allowed to sell their labor tax-free to another contractor; (2) Option 2 and Option 3 contractors will collect sales tax on a statutorily set percentage of the total sales price for building materials and contractor labor; (3) Sales tax will be reported when the payments for services are received; and (4) projects involving a major renovation of a commercial building require prior approval from the Department of Revenue and payment of a $500 fee in order to be tax-free. Details are available at the NE DOR website at http://www.revenue.state.ne.us/contractFAQ.htm. (Letter to Contractors, Nebraska Department of Revenue, June 2004)