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How can I find out how sales tax relates to my roofing contractor business?

We are headquartered in Nashville, TN with business operations in Tennessee and Florida. I am CFO (glorified title) and new to the business and am not sure if we are being properly charged sales tax on our materials purchases or if we are required to charge any sales tax on our sales. We install new roofs, do re-roofs and roofing repairs. Many of our jobs include specialty roofing materials that are fabricated in our shop. It appears that we have never charged a customer any sales tax on our service jobs. I have also found that we have sold salvage/surplus roofing materials without charging sales tax.

1 reply

Jan 30, 2020

From a high level, in Tennessee sales tax is generally not required for Services but may be required for products when the services provided involve the "repairing, creating or installing a product." There are special rules set forth for "contractors and subcontractors" and depending on the job and/or materials exemptions from sales tax liability may apply. You can read more in-depth information about sales tax as related to Tennessee construction participants in the Tennessee Sales and Use Tax Guide (specifically beginning on p. 69). For the most part, however, it appears that sales tax applies to the materials used on the construction or repair of real estate. Additionally, there are software platforms that can help specifically with questions and process surrounding sales tax. One of these is Avalara. It may be worth checking out software options, or talking to a local tax attorney to make sure your t's are crossed and i's are dotted.

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