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Sales tax and due diligence in an M&A
Those involved in mergers and acquisitions often get understandably excited about the deal,...
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Contractors typically will pay sales tax on their purchases and not charge sales tax on their services. However, like other sales tax issues – a lot depends on the state and the type of contract. Factors that effect whether you charge sales tax include whether you are improving real property or selling and installing TPP, is the project new construction or a remodel, and what state is the project performed?
Exemptions could apply to contractors based on who the end customer is as well as whether you are considered the general contractor or perhaps you are providing services to the general contractor who in turn is billing the end customer.
When contractors purchase products in one jurisdiction and use them in another jurisdiction, additional tax (above what was already paid on the purchase) may be due based on where the project is performed. Understanding and tracking these obligations is a lot to keep up with.
Don't take our word for it. Read how our clients feel about UPSOURCING their sales tax management to TaxConnex!
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Those involved in mergers and acquisitions often get understandably excited about the deal,...
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