Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2017

Sales and Use Tax Annotations

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190.0000 CONSTRUCTION CONTRACTORS—Regulation 1521

Annotation 190.6500


190.6500 Thirty-Day Proposal—Fixed Price Construction Contract Exemption. Taxpayer asked whether a contract with the following wording is a fixed price contract:

"This proposal is effective for thirty days after the date shown above. If this proposal is accepted in this period, the prices shown below are guaranteed by contractor for all materials delivered before ____________, but in no case more than 120 days from the date of acceptance ("the termination date?"). Thereafter, prices are subject to change on undelivered material to reflect any increase in contractor's cost."

The contract guaranties a bid price for thirty days only. Assuming the proposal is accepted within the thirty day period and prior to July 15, 1991, the obligation is a fixed price prior to July 1, 1991. It is, however, fixed only for goods which are delivered prior to the termination date. Sales of goods delivered after the termination date (assuming it is after July 15, 1991) are subject to the increased tax rate. 1/29/92.