Sales Tax Laws by State on Construction Materials

This page covers sales tax laws for all 48 states in the contiguous United States for sales of construction materials to various customer types, including Wholesalers, General Contractors, Installers, and End Customers.

It is important to note that sales tax and tax regulations vary by state. RYC Flooring will charge sales tax on all orders as applicable by state tax regulations unless otherwise negotiated. 

For any questions regarding sales tax or other matters, please contact us at [email protected] or via our Contact Us Page.

 

Definitions

These definitions apply specifically to RYC Flooring's Sales and Use tax resource pages. 

• Wholesalers: Customers of RYC Flooring who purchase goods with intent to resell the goods. Example: A contractor supply store that purchases flooring from RYC Flooring to sell to local homeowners. 
• Installers: Customers of RYC Flooring who purchase goods with intent to use the goods to improve, alter, or repair buildings, homes or other real property, for another person or entity other than themselves. Example: general contractors, subcontractors, or specialized contractors. 
• End Customers: Customers of RYC Flooring who purchase goods with intent to place the goods in their own residence.
• Real Property: Surface land, its improvements, and fixtures. Examples: land, buildings, fences, landscaping, driveways, sewers, and drains. 
• Contractor: Any person who is engaged in the occupation of entering into and performing construction contracts for owners. 
• Owner: Any person who enters into contract(s) with contractors relative to the construction of a structure or improvement of real property.

 

No statewide Sales and Use tax

RYC Flooring will not report or collect sales tax on orders shipped to these states.

There is no statewide Sales and Use tax in the following states:

• New Hampshire
• Oregon
• Montana
• Delaware

 

End Customers must pay Sales and Use Tax

Unless otherwise stated, RYC Flooring will collect Sales and Use tax on all orders shipped to End Customers. 

 

Wholesalers can usually apply for an exemption to Sales and Use tax collection

Most states allow Wholesalers to apply for an exemption to Sales and Use tax collection if the Wholesaler intends to resell the purchased goods. The Wholesaler will then be responsible for reporting and collecting Sales and Use tax once the goods are sold to the End Customer. This includes resellers and distributors. 

To submit an exemption certificate to RYC Flooring as a Wholesaler, please send an email following these instructions:

• To: [email protected]
• Subject: Wholesaler Sales Tax Exemption
• Message: I understand that I will be responsible for reporting and paying sales tax to the state that these goods are being delivered to, and that I will not hold RYC Flooring responsible for reporting or paying any sales tax relating to this order.
• Attachment: Filled out sales tax exemption form for the state that the order is being shipped to. 

 

States where Installers can apply for an exemption to Sales and Use tax collection

If an Installer places an order with RYC Flooring, and sends a valid exemption certificate to RYC Flooring, RYC Flooring will exempt current and future orders submitted by that Installer from sales tax collection. If RYC Flooring exempts an order from sales tax collection, the Installer purchasing the goods from RYC Flooring will be responsible for both reporting and paying the sales tax associated with those goods to their state's tax authority. 

To submit an exemption certificate to RYC Flooring as a Installer, please send an email following these instructions:

• To: [email protected]
• Subject: Order #[x] Sales Tax Exemption
• Message: I understand that I will be responsible for reporting and paying sales tax to the state that these goods are being delivered to, and that I will not hold RYC Flooring responsible for reporting or paying any sales tax relating to this order.
• Attachment: Filled out sales tax exemption form for the state that the order is being shipped to. 

Installers can apply for a sales tax exemption for orders shipping to the following states:

• Alabama: ...the sales and use tax certificate of exemption will allow the contractors to make direct purchases without paying tax to the seller, but they will be responsible for remitting the unabated local tax directly to ALDOR or the proper local tax administrator, even if they hire a subcontractor to provide the installation aspect of the contract.
• Colorado: A retailer-contractor’s sales tax license enables him or her to purchase items tax-free for resale to customers
• Washington: 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.
• Washington DC: Under contracts in which the contractor agrees to sell materials used at an agreed price for those materials, or at the regular retail price, and to perform the work either for an additional price or on the basis of time consumed, the contractor is deemed to be a vendor making a taxable sale at retail within the meaning of the Act and is required to file returns, pay the tax, and collect reimbursement for the tax from the purchaser in the same manner as any other vendor... the contractor is required to furnish a resale certificate to the registered vendor from which the contractor buys the material used, since that transaction constitutes a nontaxable sale for resale. (438.3 and 438.4)
  

 

States where Sales and Use tax must be collected for orders from Installers

RYC Flooring will charge sales tax on orders purchased by Installers shipped to these states. In the case the Installer transacts the goods purchased from RYC Flooring with another party (ex. an End Customer), the Installer will likely not owe sales tax on the value of the goods sold to that party, but may owe sales tax on any additional service or value provided. The reporting and collection of sales tax on services vary state by state. 

• Arizona: A contractor will pay tax on the materials when they are purchased. 
• Florida: The purchase of materials and supplies to improve, alter, or repair land, buildings, homes, or other real property is subject to sales tax and applicable discretionary sales surtax.
• Idaho: Idaho sales tax law says contractors are the consumers (end users) of all the goods they use. As a result, they must pay sales tax on all purchases, including all the equipment, tools, and supplies they use to build, improve, repair, or alter real property.
• Illinois: Illinois law considers the construction contractor the end user of the items permanently incorporated into real estate. The construction contractor incurs use tax on the cost price of these items and must either pay the tax to its supplier or remit the tax directly to the Illinois Department of Revenue (IDOR), if the supplier is not registered with IDOR.
• New Jersey: For New Jersey Sales Tax purposes, a contractor is considered the actual consumer of the materials and supplies used in construction or in improving, altering, or repairing the real property of others. Sales of materials and supplies to contractors are considered retail sales and, therefore, taxable. Likewise, subcontractors are required to pay Sales Tax on materials and supplies that they purchase for use in fulfilling contracts with prime contractors.
• New York: Generally, as a contractor or subcontractor you will pay sales tax on all building materials and other tangible personal property you purchase. If the materials are later transferred to your customer when performing taxable repair, maintenance, or installation services, you may be able to take a credit for the sales tax you previously paid.
• Ohio: Contractors and home remodelers do not collect sales tax on their work.  They do however, pay sales tax on the supplies they purchase.
• Oklahoma: Contractors are defined by statute as consumer/users and must pay sales tax on all taxable services and tangible personal property, including materials, supplies, and equipment purchased to develop, repair, alter, remodel, and improve real property.
• Pennsylvania: A contractor shall pay tax upon the purchase price, as defined by the TRC, of all property, including materials, equipment, components and supplies, which he furnishes and installs in the performance of his construction activities.

 

For state-by-state rules on whether Sales and Use tax must be collected for labor in relation to installation, please click here