A contractor digs fill dirt from a pit it owns and uses it on a customer’s job. What does s. 212.06(15)(a) provide?
Correct Answer
A) The contractor is the ultimate consumer of the material and owes use tax on it
Section 212.06(15)(a): "When a contractor secures rock, shell, fill dirt, or similar materials from a location that he or she owns or leases and uses such materials to fulfill a real property contract on the property of another person, the contractor is the ultimate consumer of such materials and is liable for use tax thereon." Use tax exists precisely to catch consumption that never passed through a taxable retail sale.
Why This Is the Correct Answer
Section 212.06(15)(a): "When a contractor secures rock, shell, fill dirt, or similar materials from a location that he or she owns or leases and uses such materials to fulfill a real property contract on the property of another person, the contractor is the ultimate consumer of such materials and is liable for use tax thereon." Use tax exists precisely to catch consumption that never passed through a taxable retail sale.
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