Tax on Construction May Apply To Separately Contracted Design Services in Washington

Friday, June 8th, 2018

 
 
Construction contractor working on design.
Share
Link
Washington
Construction

The Washington Department of Revenue recently ruled that design services were taxable as part of a construction contract.

The taxpayer was a residential contractor that performed construction and design services. The design and construction work were performed under separate contracts. Additionally, the taxpayer received what it described as a "commission" for acting as an "investor" on a project for which it was the contractor.

Washington taxes the construction or improvement of new or existing buildings, but it does not impose tax on design services. However, when a service provider contracts to perform nontaxable services relating to construction, and then contracts to perform the construction, the entire charge is taxable if the parties "contemplated" at the time of the first contract that both contracts would be awarded to the service provider. The ruling found that (1) the design services were taxable because the parties contemplated that both contracts would be awarded to the taxpayer, and (2) the "commission" payment was for taxable construction services rather than investment purposes.

https://www.ttrus.com/Tax_on_Construction


About TTR

Transaction (buying or selling things), Tax (the tax on this activity), Resources (our people, our website, our support services) - TTR, Inc.

TTR has a website that companies subscribe to and use daily. This website provides a list of everything that can be bought or sold in the U.S. It provides simple answers to whether buying or selling these items is taxable (subject to a sales tax or other tax), and it provides all the legal authority to support these tax answers.

TTR likes to keep things simple and fun, which is why it has great people who provide help to clients on any support questions they have about transaction tax issues.

Please visit TTR on the web at www.ttrus.com or call 866.578.8193.

Data Survey Services Not Taxable in South Carolina

Monday, June 24th, 2019 -The South Carolina Department of Revenue recently ruled that business data survey services were non-taxable pr...

Senior Center Cafeterias are Taxable in Missouri

Friday, June 21st, 2019 -Missouri's Director of Revenue recently issued a letter ruling taxing the sale of cafeteria food by a 501(c)(3...

Hot-Air Balloon Rides in Missouri are Taxable When...

Wednesday, June 19th, 2019 -Missouri recently released a letter ruling addressing the taxation of hot-air balloon rides. The taxpayer was ...

Nevada Exempts Certain Medical Equipment

Monday, June 17th, 2019 -Effective July 1, 2019, Nevada will exempt durable medical equipment, oxygen delivery equipment, and mobility ...

Participatory Sports are Taxable in New York

Friday, June 14th, 2019 -The New York Division of Tax Appeals recently denied a refund claim made by an instructor-led indoor spin clas...

Marketplace Facilitators to Collect Tax in Vermont

Thursday, June 13th, 2019 -Vermont recently passed a bill requiring marketplace facilitators to collect and remit sales tax on retail sal...