Havasu Contractors and Sales Tax

[zhandfull]

For those that have had residential contract work done in Havasu. Is it common to be charged sales tax on the contract amount?

 

[DC-88]

For those that have had residential contract work done in Havasu. Is it common to be charged sales tax on the contract amount?

Here's some light reading for you on the subject in general . Scroll down to the owner builder section to reverse engineer how it works from our perspective as GC in AZ . One of the first things upon most submittals is always TPT # verification for the GC. Az doesn't mess around when it comes to getting their tax money --

Speculative Builder | Arizona Department of Revenue

azdor.gov

 

[dspracing]

The TPT is an interesting one from what I’ve experienced. We have 17 contractors on our project, 1 of them collects and remits TPT. He stated it was not well enforced but better safe than sorry.

I have seen that the city of Bullhead does ask for TPT info during the building permit application process. I don’t recall that to be the case in LHC or Mohave county.

 

[EarpRider]

I look through my backyard build, looks like about a 3rd of my contractors did.

 

[zhandfull]

I was a contractor in California for 18 years. Never charged sales tax on a contract. However, did pay it on all material purchased.

AZ seems to be the opposite. Contractors are buying materials tax free and charging tax on the contract amount. Thats based on what I’m reading on TPT.

Transaction Privilege Tax for Contractors | Pinetop-Lakeside, AZ

All construction contracting gross income subject to the tax is allowed a 35% standard deduction. Speculative builders are allowed a land deduction at the fair market value of the land if they own the land. In lieu of undocumented fair market value, a deduction of 20% of the gross selling price...

www.pinetoplakesideaz.gov

 

[Ace in the Hole]

AZ... on solar projects you pay sales tax but its built into the "total cost" you see... we don't pay sales tax to the distributors when we buy materials.

 

[RIVERBORN]

I think it’s just how it’s written up.
Total cost is “x” amount
Or “x” amount plus taxes
Both equal same total amount.

 

[mesquito_creek]

In AZ, basically any sub contractor below a GC pays sales tax over the counter and does not collect and remit taxes as part of a contract.

If you are working under a GC and they are going to collect tax then you (the sub) can avoid paying sales tax on materials by purchasing under the GCs TPT.

The don’t call a GC a GC they call them a “prime contractor”. So anyone can be a prime if you meet the definition. Most everyone I know in the trades started paying tax over the counter when the charge the rules around 2017. But I suppose there may be some large trade contractors still considered prime and avoiding sales tax on materials and charging the customer and paying them to the state and city after the fact.