Logging operations using federally owned roads

From the 2024 DOR Tax Exemption Study

Home Education Industry Guides Construction Custom Construction (continued) Print Custom construction (continued) Rental of equipment by the contractor Contractors sometimes rent equipment for construction projects. When this happens, the contractor is the consumer of the rented item and owes retail sales tax to the rental company. This is no different than purchasing a tool the contractor must have in order to perform its services and passing the cost on to the customer. The sales tax paid by the contractor to the rental company is a cost of doing business and, if it is passed on to the customer, it is considered to be part of the gross contract price that is subject to sales tax. In this case, there are two separate transactions. The first transaction is between the contractor and the rental company. The contractor is the consumer of the rental equipment and must pay sales tax to the rental company. The second transaction is between the contractor and its customer. The customer is the consumer of the construction services and must pay sales tax to the contractor on the total contract price which includes the equipment rental charges, even if they are passed on to the customer wit