If you are repairing or renovating a residential property, you are a contractor. As an entrepreneur, you can have a lump sum contract (a price for the entire order). Or you can have a separate contract (you charge separately for hardware and labor). As part of a lump sum contract, you pay taxes on all your taxable supplies, materials, equipment and services when you purchase them. You do not charge tax to your customer. If your contract is for one of the following jobs, you are acting as a contractor and your construction work is not taxable: The receipt and transmission of telephone messages by a human operator is a taxable answering service. Taxable response services do not include call center operations such as handling customer complaints and taking orders. Examples of taxable information services include: maintenance is planned, regular work on real estate is not broken. Maintenance is necessary to keep the property in good condition by preventing its deterioration. The costs of maintaining a property are not taxable. You must pay VAT on all taxable items purchased to be used in connection with the provision of a tax-free home maintenance service.
In addition, you must have a contract or other documents in place to prove that the Services are planned and periodic. Installed spare or repair parts and materials are taxable. The maintenance of a property can be carried out either under an individual contract or as a flat-rate contract (see guidelines under collection of the tax on new constructions). On the other hand, the total amount charged for the conversion, repair or restoration of non-residential property is taxable. Examples of non-residential properties include hospitals, office buildings, refineries, warehouses, parking garages, retail stores, restaurants, manufacturing facilities, and other commercial facilities. In addition to the taxable services mentioned above, other types of sales, which can generally be considered “services”, are taxable as the sale, transformation or conversion of physical personal property. As part of a lump sum contract, you pay taxes on all your taxable supplies, materials, equipment and services when you purchase them. You do not charge tax to your customer. Personal services in a massage parlour, Turkish bath or escort service are taxable. Laundry, dry cleaning and clothing services are taxable services. Repair or conversion includes roofing and painting.
However, if the painting is maintenance (as defined in this bulletin), no tax is due on the repainting work. Labor that causes a unit of production to produce more than the same product in one unit per hour or unit in relation to annual production, or labor that causes a unit of production to produce a new product, is called increased capacity. Work to increase the production capacity of a production or processing unit in a petrochemical refinery or chemical plant is not taxable. You can fulfill orders with increased capacity either as part of a lump sum contract (a price for the entire order) or as part of a separate contract (direct costs for integrated materials and labor). For more information on the limits of this exclusion and your tax responsibilities in providing these services, please refer to Administrative Rule 3.362 relating to work related to increasing the capacity of a production unit at a petrochemical refinery or chemical plant. If you have a contract to add new square footage and remodel existing sequences into non-residential properties for a single royalty, and the renovation portion is greater than five percent of the total fee, the total fee is presumed taxable. You can overcome this presumption at the time of the transaction by separately informing the customer of appropriate remuneration for taxable services. However, if the charges for the taxable portion of the services are not specified separately at the time of the transaction, you or your client may subsequently set for the auditor by written evidence the percentage of the total charge related to the new building. Examples of acceptable documentation include written contracts detailing the scope of work, specification sheets, counting sheets, value plans and plans.
Services provided by a transmission and distribution undertaking are taxable if the transfer or supply is made directly to a final customer whose electricity consumption is subject to VAT. Under a separate contract, you give your suppliers resale certificates instead of paying taxes on the materials you incorporate into the customer`s real estate assets and on certain services if the fees for the services are shown separately to the customer. These services are surveying, landscaping, final cleaning and security systems integrated into the client`s property. You will then collect state sales tax plus any local taxes from your customer on the amount you charge for materials and services. Your fees for materials should be at least as high as those you paid for them. Construction costs are not taxable. Pest control and destruction, collection or disposal of garbage and other waste, janitorial and custodial services (including sweeping or cleaning of parking lots), landscaping and lawn maintenance (including tree surgery and plant rentals), and surveying are taxable real estate services. The term “debt collection service” does not include the collection of court-ordered child support or child medical support or the collection of current credit accounts and real estate, including mortgage payments and rent payments. Fees for these services are not taxable. The mere use of a computer as a tool to provide a professional service is not a data processing service.
For example, the use of a computer and computer-aided design (CAD) software by an architect when creating original plans is not data processing. Similarly, an accountant or accountant does not provide taxable data processing services when applying knowledge of accounting principles to prepare financial reports such as profit and loss statements, balance sheets or profit or loss statements, or to prepare federal income tax returns, state exemption or sales tax, even if the work is done on a computer. If you perform any of the following types of jobs on non-residential real estate, the work is taxable: news syndicates, financial journalists, and investment researchers must levy taxes on their services. .
