Arkansas Sales Tax on Fence Construction Labor and Materials Markup
Sales tax does not apply to services to initially install, alter, add, clean, refinish, replace, or repair nonmechanical, passive, or manually operated components of buildings or other improvements or structures affixed to real estate. This is a contractor service, and the contractor is the consumer of all tangible property used or consumed by the contractor. A person performing contractor services must pay tax on the materials consumed in the services. Installation of fencing is a non-taxable contractor service. Regardless of whether a markup is built into the sales price to the customer, tax would not be collected on the sales price charged to the customer for the installation of fencing. Instead, tax would be paid on the materials used or consumed in the performance of the service. Tax on the materials is paid by the contractor at the time the materials are purchased, or, if the contractor has a sales tax permit, at the time the materials are withdrawn from stock for use in the fencing installation project. When fencing materials are sold without a fencing installation performed, tax is collected on the total consideration paid for those sales of tangible personal property, including any markup charged. If a sales tax permit is held, the materials can be purchased tax free as a sale for resale. At the time the materials are sold to the customer, tax is collected.
Arkansas Sales Tax on Fence Construction Labor and Materials Markup
