STATE OF NEVADASTATE OF NEVADADEPARTMENT OF TAXATIONDEPARTMENT OF TAXATION

CONSTRUCTIONCONSTRUCTION

CONSTRUCTION CONTRACTORS

• IncludesIncludesany person who acts solely in a professional any person who acts solely in a professional

capacity to improve real property bycapacity to improve real property by

• IncludesIncludesany person who acts solely in a professional any person who acts solely in a professional

capacity to improve real property bycapacity to improve real property by

NAC 372.190NAC 372.190

The following are included in this group:The following are included in this group:

CONSTRUCTION CONTRACTORS

NAC 372.190NAC 372.190

The term does NOT include:The term does NOT include:• An employeeAn employee• A licensed architectA licensed architect• A licensed professional engineerA licensed professional engineer• A manufacturer ofA manufacturer of

– Modular homesModular homes– Sectionalized housingSectionalized housing– Prefabricated homesPrefabricated homes

CONSTRUCTION CONTRACTORS

NAC 372.190(1)NAC 372.190(1)

A construction contract for improvement to A construction contract for improvement to real property is a contract forreal property is a contract for

erectingerectingconstructingconstructingaffixing a structure to real propertyaffixing a structure to real propertyaffixing other improvement on or to affixing other improvement on or to

real propertyreal propertyremodelingremodelingAlteringAlteringAdding or repairing an improvement Adding or repairing an improvement

to real propertyto real property

CONSTRUCTION CONTRACTORSConstruction Contract

NAC 372.190(2)NAC 372.190(2)

»May be formal or informalMay be formal or informal»Advertised contractsAdvertised contracts»Negotiated contractsNegotiated contracts

• Fixed price contractsFixed price contracts• Cost reimbursable contractsCost reimbursable contracts• Lump-sum contractsLump-sum contracts• Time and material contractsTime and material contracts

CONSTRUCTION CONTRACTORSConstruction Contract

NAC 372.190(2)NAC 372.190(2)

• A construction contractor is considered a A construction contractor is considered a consumer of all tangible personal property consumer of all tangible personal property purchased for use in improving real property.purchased for use in improving real property.

• A construction contractor is required to pay A construction contractor is required to pay the tax on all material purchases that will be the tax on all material purchases that will be used in the construction jobused in the construction job.

CONSTRUCTION CONTRACTORSApplication of Tax

NAC 372.200NAC 372.200

»Tangible personal property purchased by a contractor for use in a government job is subject to the tax.

CONSTRUCTION CONTRACTORSGovernment Contracts

NAC 372.200(1)NAC 372.200(1)

CONSTRUCTION CONTRACTORSConsumer Use Tax Return

• Construction contractors bid future jobs which Construction contractors bid future jobs which include the current sales tax rateinclude the current sales tax rate

• When the sales tax rate changes….When the sales tax rate changes….the construction contractor can apply for an the construction contractor can apply for an

exemption from the increased tax rate. Contractors must exemption from the increased tax rate. Contractors must complete a Contract Summary Form and submit to the complete a Contract Summary Form and submit to the Department. Once approved, the contractor will be required Department. Once approved, the contractor will be required to self-report the use tax at the former tax rate. Complete to self-report the use tax at the former tax rate. Complete instructions and the form are available on the Department of instructions and the form are available on the Department of Taxation’s website under “Common Forms”.Taxation’s website under “Common Forms”.

Note: Sales/use tax rates increased on 7/1/2009. See Department website Note: Sales/use tax rates increased on 7/1/2009. See Department website for new rates per county. The increased tax rate will expire 6/30/2013. for new rates per county. The increased tax rate will expire 6/30/2013. ((AB561, 2011 LegislativeAB561, 2011 Legislative Session)Session)

CONSTRUCTION CONTRACTORSChange in Sales Tax Rate

NRS 377B.110(6)NRS 377B.110(6)

• A construction contractor may be A construction contractor may be registered as a retailer registered as a retailer

• As a As a retailerretailer, the contractor may use a , the contractor may use a resale certificate for purchases, and resale certificate for purchases, and report the tax when the materials are report the tax when the materials are used in a job or sold at retail.used in a job or sold at retail.

• A retailer construction contractor may A retailer construction contractor may NOT use a resale certificate for NOT use a resale certificate for purchases of purchases of tools tools or or suppliessupplies which are which are used in the tradeused in the trade.

CONSTRUCTION CONTRACTORSResale Certificates

NAC 372.210NAC 372.210

RESALE CERTIFICATERESALE CERTIFICATE

• Fabrication labor is labor which results in the Fabrication labor is labor which results in the creation of tangible personal property.creation of tangible personal property.

• Fabrication labor is taxable in a Fabrication labor is taxable in a retail saleretail sale where where no installation to real property is involvedno installation to real property is involved..

• A contract for improvement to real property A contract for improvement to real property which includes fabrication and installation is which includes fabrication and installation is not considered a retail transaction; the not considered a retail transaction; the contractor is liable for tax on the materials only contractor is liable for tax on the materials only in such a transaction.in such a transaction.

CONSTRUCTION CONTRACTORSFabrication Labor

NAC 372.380NAC 372.380

• Materials purchased ex-tax for out of Materials purchased ex-tax for out of state jobs must not be commingled state jobs must not be commingled with other materials inventorywith other materials inventory

• ‘‘Receiving’ inventory in this state by Receiving’ inventory in this state by the end user, which is enroute to the end user, which is enroute to another state, is subject to Nevada another state, is subject to Nevada sales tax. sales tax. ((NRS 360B.350NRS 360B.350))

CONSTRUCTION CONTRACTORSOut of State Jobs

NAC 372.210(4)NAC 372.210(4)

• Materials purchased out of state and Materials purchased out of state and delivered to Nevada for a Nevada job delivered to Nevada for a Nevada job are subject to Nevada tax.are subject to Nevada tax.

• Tax legitimately paid to other state is Tax legitimately paid to other state is honored by Nevada; however, if the honored by Nevada; however, if the other state tax rate is lower than the other state tax rate is lower than the Nevada rate, the difference is due to Nevada rate, the difference is due to NevadaNevada

CONSTRUCTION CONTRACTORSPurchases out of State

NRS 372.185, NRS 372.250NRS 372.185, NRS 372.250

• Purchase invoices• Sales journals• General ledgers• Job files• Other records

»Must keep records for four (4) years

RECORDS TO BE KEPT

NRS 372.735NRS 372.735

Written Response

Most tax issues can be addressed by the Department of Taxation. Please be advised that any responses to inquires made to the Department are only binding if put in writing, such as Nevada Revised Statutes, Administrative Code, Nevada Tax Notes, or in written correspondence.

Our offices are open Monday-Friday 8:00 AM – 5:00 PM

Southern Nevada:Grant Sawyer Office Building555 E. Washington AvenueSuite 1300Las Vegas, NV 89101 OR2550 Paseo Verde ParkwaySuite 180Henderson, NV 89074

Carson City:1550 College ParkwaySuite 115Carson City, NV 89706-7937

Reno:4600 Kietzke LaneBuilding L, Suite 235Reno, NV 89502

Contact our Call Center at1-866-962-3707

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DEPARTMENT OF TAXATION Contact Information