Ga. Comp. R. & Regs. R. 560-12-2-.26 - Contractors
(1) Any person who
contracts to furnish tangible personal property and perform services thereunder
in constructing, altering, repairing or improving real property in this State
is deemed to be the consumer of all tangible personal property used or consumed
in performing such contract and shall pay the tax thereon at the time of
purchase, use, storage or consumption in this State, whichever occurs
first.
(2)
General or Prime
Contractor Defined.
(a) A general or
prime contractor shall include but not be limited to any person, partnership,
limited liability partnership, corporation or limited liability company who
shall contract with the owner, lessee or other person having authority to enter
into a contract involving the premises or property as designated by said
contract, to perform services and/or furnish materials for the construction,
alteration, or improvement of any real property or project.
(b) A general or prime contractor shall also
include any person, partnership, limited liability partnership, corporation or
limited liability company who owns or leases real estate for the purpose of
developing said real estate other than for his or her own occupancy, and in the
development thereof, contracts, alters, or makes improvements
thereon.
(c) A general or prime
contractor shall also include any person, partnership, limited liability
partnership, corporation or limited liability company who owns or leases real
estate and in the development, alteration, or improvement thereof, or
construction thereon, contracts with another person, partnership, or
corporation to furnish tangible personal property and perform
services.
(3)
Subcontractor Defined. A subcontractor shall include any person,
partnership, limited liability partnership, corporation or limited liability
company who contracts with the prime or general contractor to perform all or
any part of the contract of the prime or general contractor or who shall
contract with a subcontractor who has contracted to perform any part of the
contract entered into by the prime or general contractor.
(4)
Sales and Use Tax Registration and
Filing Requirements.
(a) Every
contractor or subcontractor improving real property in this State shall file an
application for a Certificate of Registration (CRF-002) as a contractor prior
to his first construction activity in this State.
(b) Sales and use tax returns shall be made
by general or prime contractors and by subcontractors on a monthly basis,
unless otherwise authorized, for such taxes owed by each respectively. The
returns are to be made on Form ST-3 as prescribed by the
commissioner.
(c) Every general or
prime contractor and every subcontractor shall have 20 days from the last day
of the reporting period in which to file their sales and use tax returns and
remit the tax to the commissioner, as is provided in these Rules and
Regulations.
(5)
Initial General or Prime Contractor Notice. Each general or prime
contractor shall within thirty (30) days after the execution of a contract with
a subcontractor whose aggregate contract(s) amount(s) on any single project is
equal to or exceeds $250,000 file with the commissioner a notice, Form S &
U T 214-1, that identifies each applicable subcontractor and contract amount.
If a general or prime contractor has filed a notice (Form S & U T 214-1) as
a result of a previous contract entered during the calendar year and is
subsequently provided a notice (Form S & U T 214-5) from the commissioner
concerning the subcontractor, then the general or prime shall be relieved from
submitting any additional notices (Form S & U T 214-1) on any future
contracts with such subcontractors during that calendar year.
(6)
Withholding and Remittance
Requirements.
(a) Each general or
prime contractor whose aggregate contract(s) amount(s) on any single project is
equal to or exceeds $250,000 with a single subcontractor is required to
withhold 2% of the payments due the subcontractor, arising out of such
contract(s), unless said contractor has filed an approved surety bond with the
commissioner in accordance with the Act.
(b) Upon receipt of the written report from
the subcontractor showing the amount of work completed on the contract and that
all sales and use taxes due the State have been paid by the subcontractor, the
Department of Revenue, Sales and Use Tax Division, shall send a written notice
(Form S & U T 214-6) to the general or prime contractor and subcontractor.
The general or prime contractor shall be authorized to pay the subcontractor
all amounts withheld for the payment of sales and use tax during the period
covered on the written notice (Form S & U T 214-6).
(c) Each general or prime contractor shall
send a written notice (Form S & U T 214-7) to the commissioner identifying
the total amount withheld after such amount has been held for a period of 60
days following the subcontractor's sales and use tax return reporting
period.
(d) General or prime
contractors must remit retainage withheld from payments to subcontractors upon
notice of demand for payment (Form S & U T 214-8).
(7)
Sales and Use Tax Surety Bond.
(a) In lieu of the retention of the
two percent (2%) by the general or prime contractor of the amounts due the
subcontractor, the subcontractor may provide an annual or continuous surety
bond (Forms S & U T 214-3 or Form S & U T 214-3C) approved by the
commissioner as to form, sufficiency, value, amount, stability, and other
features necessary to provide a guarantee of payment of tax due under the
Act.
(b) The bond shall be made to
the Department of Revenue, Sales and Use Tax Division, by the subcontractor on
the application (Form S & U T 214-2). The annual surety bond shall cover a
calendar year and shall expire on December 31 of each year, and a new bond, if
needed, shall be filed with the commissioner. The continuous bond shall
continue without interruption until notification has been received from the
surety company that the subcontractor has not renewed the bond or that the bond
has been cancelled.
(c) Each
subcontractor who shall desire to make a bond in accordance with O.C.G.A.
§
48-8-63 shall be required to have as surety on said bond a surety corporation
authorized to do business in the State of Georgia. The amount of the bond shall
be based on the following schedule:
1.
Subcontractors whose anticipated annual gross receipts from subcontracting in
Georgia for the year is less than $250,000 shall not be required to have a
bond;
2. Anticipated annual gross
receipts $250,000 to $500,000 - Bond in sum of $5,000.
3. Anticipated annual gross receipts $500,000
to $750,000 - Bond in sum of $20,000.
4. Anticipated annual gross receipts $750,000
to $1,000,000 - Bond in sum of $30,000.
5. Anticipated annual gross receipts over
$1,000,000 - Bond in sum of $50,000.
(d) At any time while the bond is in force,
the commissioner may within his discretion increase or decrease the amount of
an individual bond or establish a new schedule for all bonds.
(e) The amount of bond required of a new
subcontracting business with no prior history of business in Georgia shall be
determined at the commissioner's discretion.
(f) When a subcontractor's bond is filed and
approved by the commissioner, the Department of Revenue, Sales and Use Tax
Division, shall promptly prepare a certificate (Form S & U T 214-4) and
forward the original of such certificate as notice to the subcontractor. Upon
the subcontractor's written request the Department of Revenue, Sales and Use
Tax Division, shall send a notice of the subcontractor's surety bond approval
(Form S & U T 214-5) to each general or prime contractor in order to be
relieved from withholding the two percent (2%) retainage. The subcontractor's
bond approval notice (Form S & U T 214-5) issued on a subcontractor's
continuous surety bond shall be valid until the Department of Revenue, Sales
and Use Tax Division, notifies the general or prime contractor and
subcontractor that the bond has not been renewed or that the bond has been
cancelled.
(g) In the absence of
the subcontractor's surety bond approval notice (Form S & U T 214-5) to the
general or prime contractor, the contractor must withhold the two percent (2%)
retainage of the subcontractor's receipts due on any given project that equals
or exceeds $250,000.
(8)
Foreign and Non-Resident Contractors. A foreign or nonresident
subcontractor applicant shall be required to submit a sales and use tax bond to
authorize release from withholding provisions of the Act in addition to the
foreign and non-resident bonding requirements provided for under O.C.G.A.
§
48-13-32(See Revenue Rule
560-12-2-.43 entitled Foreign and
Non-Resident Contractors and Subcontractors. Amended).
Notes
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