FILE: FGCA
LIABILITY OF GENERAL CONSTRUCTION CONTRACTOR
AND CONSTRUCTION SUBCONTRACTORS FOR SALES AND USE TAXES
The St. John the Baptist Parish School Board, in order to assure proper payment of sales and use taxes by contractors and subcontractors, implements the following guidelines:
Within thirty (30) days of the execution of a construction contract, a general construction contractor shall submit to the St. John Sales Tax Collection Department, referred to as Department, a list of all construction subcontractors directly engaged by the general construction contractor for such particular construction contract. The list shall include the construction subcontractor's city sales and use tax registration number (if any), together with the construction subcontractor's physical address and telephone number. Should a construction subcontractor be engaged by the general construction contractor with respect to such construction contract subsequent to the submission of such list to the Department, such general construction contractor shall, within thirty (30) days from the execution of the contract engaging such construction subcontractor, submit the above information regarding the additional construction subcontractor to the Department.
After review of the list(s) referred to in 1. above, if the Department determines that a construction subcontractor is not registered with the Department, or has failed to timely file one or more local sales and use tax returns, the general construction contractor shall, upon written notification and request by the Department via certified mail, withhold an amount not to exceed five percent (5%) of the construction subcontractor's materials portion of the construction contract. Such written notification and request by the Department shall identify the construction subcontractor and the amount requested to be withheld. The Department shall also notify the construction subcontractor via certified mail that the construction subcontractor has ninety (90) days from the receipt of such notification to obtain a written release from the Department and to present such release to the general construction contractor, which shall authorize the general construction contractor to release the withheld funds. If the construction subcontractor fails to obtain the release within the ninety (90) day period, the general construction contractor shall, upon request by the Department, remit the amounts withheld from such construction subcontractor to the Department. Upon proof by the construction subcontractor that the Department erroneously instructed the general construction contractor to withhold and remit said amounts, within thirty (30) days after such proof has been made, the Department shall cause a refund to be made, as provided by law, to such construction subcontractor for any amounts which were erroneously withheld and remitted to the Department.
Within thirty (30) days after receipt of the required lists from the general construction contractor, the Department shall issue to the general construction contractor appropriate documentation evidencing that the general construction contractor has complied with all requirements with respect to each such construction contract. Such documentation shall release the general construction contractor from liability for any sales or use tax incurred by the construction subcontractors in connection with the construction contract to which such documentation relates.
If the general construction contractor has omitted one (1) or more construction subcontractors from the list(s) submitted to the Department, or the general construction contractor has failed to withhold any amounts due a construction subcontractor after receipt of notification and request by the Department, then the Department may proceed directly against the general construction contractor for any unpaid local sales or use taxes incurred in connection with the construction contract by that omitted construction subcontractor, or by that construction subcontractor to whom payments were made by the general construction contractor after receipt of notification and request by the Department.
Any general construction contractor who fails to substantially comply with this policy of the St. John the Baptist Parish School Board shall be liable for all sales and use taxes of its subconstruction contractors to the extent of the noncompliance.
New policy: March 19, 2015
Ref: Board minutes, 3-19-15
St. John the Baptist Parish School Board