I have been hired to put in a retaining wall, edging, and dirt to change the slope of the yard. On what labor must I collect tax?
If the work to put in the retaining wall, edging, and dirt is performed by an Option 1 contractor, the Option 1 contractor must collect sales tax on the total amount charged for the retaining wall, edging, dirt, and labor charge unless the labor charge is separately stated. (An Option 1 contractor does not charge tax on separately stated labor charges.) If the work to put in the retaining wall, edging, and dirt is performed by an Option 2 or Option 3 contractor, the charge for the building materials and labor is not taxable. Option 2 and Option 3 contractors will not collect any tax on the amount charged for the building materials and their labor. Option 2 and Option 3 contractors must pay or remit tax on their purchase of the building materials.
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