A Word of Caution These materials are presented with the understanding that the information provided is not legal advice. Due to the rapidly changing nature of the law, information contained in this presentation may become outdated. Anyone using information contained in this presentation should always research original sources of authority and update this information to ensure accuracy when dealing with a specific matter. No person should act or rely upon the information contained in this presentation without seeking the advice of an attorney.

“From the Frying Pan to the Fire” Presented By: Floyd McKinley Sayre, Esquire

Taxation of Services to Property Owners Contracting activity that is not a Capital Improvement is a service that is subject to sales tax.

Capital Improvements It substantially adds to the value of the real property, or Appreciably prolongs the useful life, and Becomes part of the real property or is permanently affixed, and Is intended to become a permanent installation

Taxability of Materials Applies to Materials Purchased by Property Owners –Materials only and performs own labor –Materials directly from supplier and hires a person to perform labor –Materials and labor form a contractor

Exemption Certificates & Direct Pay Permits By Property Owners

Multistate Transactions Out-of-State Purchases Materials Purchased for use in out-of-state contracts

Subcontractors Taxable services purchased by a Contractor from a Sub in a contract resulting in a Capitol Improvement are not subject to CSST.

Contractor As Retailer Sales on a regular basis Not routinely make retail sales

Incidental Installation Rule The product is sold by a retail dealer who maintains an inventory, and The product is installed by the retail dealer or his agent, and The installation is incidental to the sale of the product

Contractor As Consumer Casual labor Equipment

Thank You!

For more information, contact: Floyd McKinley Sayre, Esquire Bowles Rice McDavid Graff & Love LLP (304)