Who Is Taxed?
Construction contractors, speculative builders, and owner builders, except for remediation contracting, are subject to the contracting tax.
Examples of taxable contracting activities include, but are not limited to:
· Construction or demolition of a building
· Road construction
· Land excavation and landscaping
· Construction for government agencies (federal, state & local)
· Construction for schools, churches and nonprofit organizations
· Installation of permanently attached equipment
· Sale and installation of floor covering
· Home remodeling (including painting, wiring, plumbing, wallpapering, etc)
Tax Rate on Contracting
The sales tax rate on construction contracting is 3.5% (GY006) of gross income. NOTE: State and county rates may also apply.
Procedures for Sales Tax Payment
The City of Goodyear is in the State collection system. Please apply for a City sales tax license through the Arizona Department of Revenue; then report and pay City sales tax on the state sales tax return under the city code GY006. A license application can be obtained by contacting the City of Goodyear, Finance Department, or the Arizona Department of Revenue, License Department 1600 W. Monroe, Phoenix, AZ 85007 602-542-2076, or 1-800-843-7196, or by visiting their website.
Factored Sales Tax
You may choose to include sales tax in the total contract price rather than show the tax separately. If so, you can use factoring to "back into" the tax included in your gross sales. There are many variations on Factoring Formulas depending on applicable tax rates.
If you choose to separately bill and collect the sales tax, the tax collected may exceed the actual tax liability due to rounding. Any excess city tax that is collected must be remitted.
Last Updated: 10/26/2010