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 190.0545


190.0545 Owner of Quarry—Supplier and Prime Contractor. A licensed construction contractor, who has its own quarry, entered into a contract with a city for the construction of streets, curbs and gutters. The contractor hires a subcontractor to receive and install materials supplied by the contractor. Some of the materials, rock and aggregate would come from the contractor's own quarry.

Since the contractor is a licensed construction contractor and has full responsibility for doing the street work regardless of the performance of the subcontractor, the contractor would be considered the consuming construction contractor. Accordingly, sales or use tax will be incurred on materials purchased by the contractor for use in performance of its construction contract with the city. No sales or use tax liability will be incurred when contractor consumes material obtained from its own quarry. 10/11/89.