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Construction Contracts in Indian Country

Contractor

Customer or Purchaser

Type of Contrac

Proper Application t of Tax-Materials

Proper Application of Tax-Fixtures

Page Number

Indian

Indian in Indian country

Lump-Sum

Contractor is consumer of materi- als—application of tax will depend on how materials are acquired by Indian contractor

Contractor is retailer of fixtures—tax does not apply to sale or purchase of fixtures

16

Indian

Indian in Indian country

Time-and-Material

1

Contractor is retailer of materials—tax does not apply to sale or purchase of materials

Contractor is retailer of fixtures—tax does not apply to sale or purchase of fixtures

16

Non-Indian with a seller’s permit

Indian in Indian country

Non-Indian with a seller’s permit

Indian in Indian country

Lump-Sum

Time-and-Material

1

Contractor is consumer of materi- als—tax applies to contractor’s cost of materials

Contractor is retailer of materials—tax does not apply to sale or purchase of materials

Contractor is retailer of fixtures—tax does not apply to sale or purchase of fixtures

17

Contractor is retailer of fixtures—tax does not apply to sale or purchase of fixtures

17

Non-Indian without a seller’s permit

Indian in Indian country

Lump-Sum

Contractor is consumer of materi- als—tax applies to contractor’s cost of materials

N/A—a contractor must have a seller’s permit to furnish and install fixtures

17

1

Assumes contract explicitly provides for the transfer of title to the materials to the Indian purchaser prior to the time the materials are installed and the materials are delivered to the Indian purchaser in Indian country. If any of these requirements are not met, the contractor is regarded as the consumer of the materials and tax applies to the contractor’s cost of the materials.

2

A contractor without a seller’s permit may enter into a time-and-material contract for the furnishing and installation of materials, but the contractor remains the consumer of the materials. Inclusion of a title clause passing title of the materials to the Indian purchaser prior to installation is only permitted when the contractor has a valid seller’s permit.

Non-Indian without a seller’s permit

Indian in Indian country

Time-and-Material

2

Contractor is consumer of materi- als—tax applies to contractor’s cost of materials

N/A—a contractor must have a seller’s permit to furnish and install fixtures

17

APRIL 2014

|

SALES TO AMERICAN INDIANS AND SALES IN INDIAN COUNTRY

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