When is the Contractors Tax due?
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The three and one half percent (3 1/2%) Contractors Tax must either be prepaid or a Surety bond must be on file with the Tax Commission before any work starts on the project. If a Surety bond is filed with the Tax Commission, tax is due as payments are received monthly on the contractors sales tax return. 5. What is a Material Purchase Certificate? A Material Purchase Certificate is issued by the Tax Commission after a contractor has qualified a project. This Certificate allows the prime or general contractor and his sub- contractors to purchase COMPONENT building materials and COMPONENT services exempt from further sales or use tax. 6. Can the owner of a construction project pay the three and one half percent Contractors Tax and obtain a Material Purchase Certificate? No. A person may not contract with himself or a partnership in which he is a partner. 7. What tax rate is due on residential construction projects (houses, apartments, etc.)? Tax is due at the regular seven percent (7%)
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