| General or prime contractor: Performs work for others at retail. Does not own the real property. This is referred to as custom construction. |
Subject to retailing B&O tax classification. |
Sales tax is collected and due on the total contract price. |
Contractor pays sales/use tax on all materials consumed by him (tools, sandpaper, etc.) Does not pay sales tax on materials which become a permanent part of the building. May use a reseller permit to purchase these items. |
| Subcontractor (custom construction): Performs work for others at wholesale. Does not own the real property. Hired by general or prime contractor to perform all or portion of contract. |
Subject to wholesaling B&O tax classification, if provided a reseller permit by general or prime contractor. Otherwise, retailing B&O tax classification. |
If general or prime contractor provides reseller permit to subcontractor, then does not collect retail sales tax on contract price. Otherwise, sales tax due on total charge to general contractor. |
Contractor pays sales/use tax on all materials consumed by him (tools, sandpaper, etc.) Does not pay sales tax on materials which become a permanent part of the building. May use a reseller permit to purchase these items. |
| Speculative builder: Constructs residential or commercial buildings on land he owns. |
No B&O tax due on sales of property. The sale of property is subject to real estate excise tax. |
Does not collect retail sales tax on the sale of the property. |
Builder must pay sales/use tax on all materials used and on all billings from other contractors. |
| Public road contractor: Builds roads for cities, counties, and the federal government. Does not include roads built for Washington State. Note: Comments apply whether prime or subcontractor. |
Subject to the public road construction B&O tax classification on the gross contract price. |
Does not collect retail sales tax on road work where the road is a city, county, or federal road. Roads for the state of Washington are subject to sales tax. Follow rules above for general contractor. |
Contractor is defined by law as the consumer and must pay sales/use tax on all materials used, applied, or installed by him. |
| Logging road contractor: Builds logging roads in conjunction with logging parcels of land. |
Subject to the B&O tax under the extracting classification on the gross contract price. |
Does not collect retail sales tax on charges for building logging roads. |
Contractor is defined by law as the consumer and must pay sales/use tax on all materials used, applied, or installed by him. |
| Government contractor: Construction to real property for the federal government. Does not apply to road construction. NOTE: Taxability the same for both prime and subcontractor. |
Subject to the B&O tax under the government contracting tax classification on the gross contract price. |
No sales tax collected from the federal government. |
Contractor is defined by law as the consumer and must pay sales/use tax on all materials used, applied, or installed by him. |
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