General Sales & Use Tax Treatment for Contractor Charges
By: Holly Hoffman
April 2020
Sales of Taxable Products and Services:
- The contractor charges sales tax on its sales price from the retail sale of taxable products and services unless an exemption applies.
- The term "sales price" also includes other charges made by a contractor which the contractor separately states on their invoices to its customer, such as:
- Contractor's cost of property
- Cost of materials used, labor or service cost, transportation to the contractor
- Taxes imposed on the contractor (with certain exceptions)
- Services necessary to complete the sale (e.g., general overhead, consulting, installation, trip charge, fuel surcharge)
- Delivery charges
- The contractor may purchase without tax, for resale, the tangible personal property that is physically transferred to its customer.
- The term "sales price" also includes other charges made by a contractor which the contractor separately states on their invoices to its customer, such as:
Contractor Providing Real Property Construction Activities:
- The contractor's sale of or service to real property is not taxable.
- The contractor is the consumer of materials used in making a real property improvement and must pay sales or use tax on its purchase of these materials.
For information on distinguishing between real property and personal property activities, see Part 2 and Appendix A in Wisconsin Department of Revenue Publication 207, Sales and Use Tax Information for Contractors.