Tenn. Comp. R. & Regs. 1320-04-05-.51 - SPECULATIVE BUILDERS
(1) Persons
building houses or other structures on their own property from their own plans
and not under contract and offering them for sale are not considered to be
selling tangible personal property or rendering a taxable service and are not
taxable under the Business Tax Act.
(2) If, during the course of construction of
a house or other structure a builder agrees to sell the property and alters the
plans to the specifications of the buyer, he shall be deemed to be a contractor
and liable for the appropriate business tax on the total receipts over and
above the price for which the property would otherwise be sold.
(3) A builder is subject to the provisions of
paragraph (2) if:
(a) He contracts to sell a
building and lot prior to completion of the construction of the building
and,
(b) He alters the building
plans to the specifications of the buyer.
Both of the conditions in subparagraphs (a) and (b) must be present in order for builder to be subject to the provisions of paragraph (2).
Notes
Authority: T.C.A. ยงยง 67-1-102 and 67-4-703.
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