7/22/2023 0 Comments Skyclimbers constructionHowever, in two situations a contractor would be considered a vendor and therefore would be able to give its vendor a properly executed resale certificate: Thus a contractor must pay the sales tax as a consumer upon the purchase of all materials or supplies used by it in fulfilling a lump-sum contract, a cost-plus contract, or a time and material contract with an upset or guaranteed price which may not be exceeded. A contractor who purchases materials from a retailer for use in building construction is generally considered the consumer of the materials and not a purchaser for resale for sales and use tax purposes. The second question you ask is whether the Company must collect and pay over sales tax on the Contractor's rentals of equipment, or whether the Company may accept a resale certificate from the contractor in lieu of sales tax.Ĭontractors must adhere to the following guidelines in paving sales tax or giving resale certificates on their purchases. Since the Contractor is not a permit holder, and since the property is leased by the Contractor is in connection with the construction, remodeling or repair of real estate, the Contractor may not use the Utility's, or any other, direct payment permit to pay directly any sales tax due on the lease of such property. This section states that a direct payment permit may be used only by the permit holder, and that it may not be used in connection with the construction, remodeling or repair of real estate. General Laws Chapter 64H, Section 3(b) states the rules for direct payment permits. Retail sales are sales of tangible personal property for any purpose other than resale in the regular course of business. The sales tax is imposed upon retail sales of tangible personal property in Massachusetts. We conclude that the Contractor may not use any direct payment permit for the rental of construction equipment from the Company. One is whether the Contractor may use the Utility's direct payment permit to pay directly any sales tax due on the Contractor's rental of construction equipment from the Company for use in its work for the Utility. The Utility has a direct payment permit for the payment of sales tax. You state that the Contractor uses this equipment in the construction, remodeling or repair of real estate pursuant to construction contracts with the ("utility"). One of the Company's customers ("Contractor") rents three types of equipment from the Company, namely scaffolding, "sky climbers" and power lifts. The ("Company") is in the business of renting and selling construction equipment to construction contractors.
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