Construction companies are challenged with transactional tax – what sales or use tax contractors should pay, what tax should be invoiced and whether exemptions are applicable.
To most construction firms, the phrase “sales tax” alone is intimidating. Tax responsibilities and requirements vary widely from jurisdiction to jurisdiction. When engaging in construction activities within any jurisdiction, it is important to know what sales or use tax a firm should be paying, what sales tax should be invoiced, if any exemptions are applicable, and what documentation or forms should be retained or completed in order to be tax compliant in that jurisdiction.
A new whitepaper gives a broad base of information relating to the most challenging jurisdictions and their contradictions. In Texas, for example, the key to determining sales tax responsibilities is understanding how the types of property, project, contract and entity will affect the taxability. In Louisiana, a home rule state, cities, municipalities and parishes can require the collection of “use tax.” And in Washington, excise taxes apply to all business activities, and business and occupation taxes are determined not only on gross receipts, but also on the nature of business activities.
Read on to get:
- a detailed breakdown of construction activity distinctions and definitions that states use to determine transaction taxability;
- deep dive on the most challenging states: Texas, Louisiana, Florida and Washington; and
- time-saving, step-by-step guide for calculating and reporting use tax.