Steven A. Dimengo recently gave a presentation to the Construction Financial Management Association on Ohio sales and use tax issues for construction contractors. Mr. Dimengo discussed how the Ohio sales and use tax rules pertaining to the construction contracting business affect the construction of real property (various manufacturing facilities, land improvements and related items), the sale and installation of tangible personal property (pumps, storage silos, etc.), and nontaxable services (e.g. excavation, grading and removal of tangible property).
Ohio law requires a contractor to pay sales tax on purchases of materials incorporated into real property. The law also requires a contractor to collect sales tax when the contractor installs personal property which does not become a part of real property. However, in both cases, the law permits certain exemptions from the tax depending on the nature of the project. Identifying real and personal property for the purpose of compliance with the Ohio sales and use tax laws can therefore be very important in the construction field.
Steven A. Dimengo is a shareholder in the Business Law and Taxation & Employee Benefits practice groups at the law firm of Buckingham, Doolittle & Burroughs, LLP.
If you would like a copy of the materials presented by Mr. Dimengo at the Construction Financial Management Association of Ohio, you can download it here. Otherwise, you can reach him directly here.