The same construction work can be reported differently depending on who hired the contractor and whether the sale is retail or wholesale.
For custom construction performed for the property owner, the prime contractor generally makes a retail sale. Washington DOR's construction matrix states that sales tax is collected on the total contract price and the activity is generally reported under retailing B&O.
A subcontractor can generally treat qualifying custom construction as a wholesale sale when the prime contractor provides a valid reseller permit or other approved documentation. In that situation, the subcontractor generally does not collect retail sales tax from the prime contractor and reports the qualifying receipts under wholesaling B&O.
If the required reseller documentation is not provided, DOR guidance says the subcontractor should generally collect sales tax, and the activity may be treated under retailing B&O instead.
| Situation | Sales tax | B&O used in this site's simplified estimate |
|---|---|---|
| Prime contractor → property owner | Generally collected on total contract price | Retailing |
| Subcontractor → prime with valid reseller permit | Generally not collected from prime | Wholesaling |
| Subcontractor → prime without valid documentation | Generally collect unless another exemption applies | Retailing |
Primary reference: WA DOR Construction Tax Matrix.