Tax Type
Retail Sales and Use Tax
Description
Contractor vs carpentry work; coordinating work with the general contractors
Topic
Computation of Tax
Subtractions and Exclusions
Date Issued
12-20-1982
December 20, 1982
Re: 58-1118 Application/Sales and Use Tax
Dear ********************
This is in response to your letter of September 16, 1982, in which you apply for relief of an erroneous assessment of sales and use tax or the period December 1, 1973, through June 30, 1977, on behalf of your clients, ****************************.
In my prior determination letter of November 21, 1979, I found that, with respect to those house components, namely, roof trusses, wall panels and gable ends, which ******* transports to the job, lifts by crane, guides into place and holds on the structure by nailing by the builder's employees, ************ is acting as a contractor. Since that time, I have learned that with respect to those house components included in sales of package homes, ********* acted as a contractor, actually doing carpentry work and coordinating work with the general contractors. I conclude, based on these facts, that ********** is a contractor with respect to all these house components; namely, roof trusses, wall panels and gable ends, as well as other items manufactured in *********** Millwork Shop and installed by **** Therefore, that portion of the audit dealing with sales of package homes and deferred contract income will be revised.
With respect to the issue of a 5% exempt sales computation, I have determined that the 5% allowance was offered at one time as part of a compromise settlement and does not have any application to the audit at this time. What was assessed in this audit was the difference between sales tax collected and the sales tax reported. That portion of the assessment representing this issue will not be adjusted.
Accordingly, the audit will be adjusted to reflect that ******** operates as a contractor with respect to items it installs and incorporates as part of the real estate during the construction process. However, with respect to the difference between sales tax collected and sales tax reported to this Department, there will be no adjustment. No further adjustments will be made. A revised assessment will be issued shortly.
Sincerely,
W. H. Forst
State Tax Commissioner
Rulings of the Tax Commissioner