Delivering on the Promise of keeping you in compliance with state regulations.
If you are a contractor that is purchasing materials for incorporation into a construction contract that does not pay sales tax as the end user, you must pay use tax to the State of Ohio based on the county in which the materials are used.
If you do not have a use tax account in place and are a contractor of any size, there is a high probability of being examined by the Ohio Department of Taxation. If you are examined without a use tax account, the State of Ohio can go back seven years to review your records.
Other issues to consider:
- Look at all fixed asset purchases — if you did not pay sales tax, then you need to pay use tax if you are not a “reseller”
- Sales tax on freight went into effect in 2005, even on exempt purchases
- Supplies that can be re-used in construction such as gloves, towels, buckets, drill bits, tools, etc.
are not exempt; you are the end user and if you do not pay sales tax on the purchase, then use
tax is owed
- Definition of a “Clean Room” and other contracts that may look like real property construction can actually qualify as the construction of tangible personal property and provide you with a reseller exemption. The purchases of materials for that job are not subject to sales & use tax.
Questions? Contact Michael Minotti: