Quote:
Originally Posted by alwann
Confused or misled?
I'm having modifications done outside the house, on the driveway specifically. Got the bid and it includes 7% tax. Also having work planned for upgrading the garage. Got the bid; no tax included in the price. Are inside and outside contracted work taxed differently, or is one contractor padding the bill and the other guy is eating the tax?
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It depends how the job is quoted. Generally improvements to real property are not taxable if quoted as a lump sum. If the materials are invoiced separately they are subject to tax, the labor is not.
If quoted as a lump sum the contractor pays sales tax when he purchases the materials.
I have a client that installs high end cabinets in homes. He charges no sales tax to the customer. If he installs an island that is permanently attached to the home - no sales tax. If the island is on wheels it is considered tangible personal property and my client charges sales tax.
If you are installing a driveway and are being quoted a lump sum there should be no sales tax.