Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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190.0000 CONSTRUCTION CONTRACTORS—Regulation 1521

Annotation 190.0357


190.0357 Group or Combination of Contractors. Two entities execute an agreement in which one furnishes paving materials and the other does the paving work on contracts they have entered into jointly with third parties. The agreement provides that contract revenues will be allocated between the entities on the basis of the line items in the contract bid.

This agreement does not result in the creation of a joint venture as the parties have not agreed to share profits and losses. Rather, the parties to the agreement appear to be a "group or combination acting as a unit" which is within the definition of "person" in Sec. 6005. This "person" is the contractor responsible for furnishing and installing the paving material and is, therefore, the consumer of the material. Sales of the paving material to the "person" by the entity that produces the paving material are taxable retail sales, the measure of which is the amount shown of the line items of the contract pertaining to the production of the material. 8/12/92.