When a masonry or paving contractor charges its customer for a real property improvement, its charge is not subject to sales tax. Examples of real property improvements include installing a patio, sidewalk, driveway, street, or parking lot.

A contractor is not permitted to collect sales tax from its customer on the sale of a real property improvement. The contractor must pay sales tax on the materials it uses in making the real property improvement. If the contractor does not pay sales tax on its purchases of such materials, the contractor must pay use tax directly to the Wisconsin Department of Revenue on these purchases.

See Publication 207, Sales and Use Tax Information for Contractors, for additional information about how Wisconsin state, county, and stadium sales and use taxes affect contractors.

April 30, 2015