Contractors Responsible for Tax on Building Materials

Tuesday, May 2nd, 2017

Image of wall in the processes of being tiled.
New York

The New York Tax Appeals Tribunal recently ruled that a contractor was responsible for paying sales or use tax on materials it used in construction.

The taxpayer installed cabinets, countertops, tile, and other building materials in kitchens and bathrooms. It also made retail sales of materials. The taxpayer purchased all materials tax-free for resale. It then sold some materials at retail and used other materials to perform construction contracts. The taxpayer argued that it was a retailer and did not have to pay tax on any of the materials.

New York considers contractors to be the consumers of materials used in construction contracts. As the consumers, contractors must pay sales or use tax on the materials.

The taxpayer was acting as both a contractor and a retailer. It acted as a contractor when it performed construction contracts. As a result, the taxpayer was the consumer of materials used in those contracts and owed use tax on those materials.

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 or call 866.578.8193.

Cemetery Monuments Exempt in New York

Tuesday, August 22nd, 2017 -Effective September 1, 2017, New York will exempt cemetery monuments from sales and use tax. New York taxes...

Sales Tax Assessment Grace Period in North Carolina

Friday, August 18th, 2017 -North Carolina recently passed a law creating a grace period for under-collected sales tax in certain situatio...

PINless Wireless Minutes Not Taxable in Michigan

Wednesday, August 16th, 2017 -The Michigan Court of Appeals recently ruled that a taxpayer's sales of prepaid wireless minutes were not taxa...

Boat Sales, Rentals, and Leases Exempt in Rhode Island

Monday, August 14th, 2017 -The Rhode Island Division of Taxation recently ruled that the sale or rental of a boat is exempt. The taxpa...

Seeds and Plants Used to Grow Food Exempt in Rhode Island

Friday, August 11th, 2017 -Rhode Island has amended its laws to exempt the sale, storage, use, or consumption of seeds and plants used to...

Can’t Buck Tax for Mechanical Bull Rides in Alabama

Wednesday, August 9th, 2017 -The Alabama Tax Tribunal recently ruled that fees charged to ride a mechanical bull are subject to sales tax. ...