HB2404 Summary

• Amends transaction privilege tax (TPT) law to impose liability on prime contractors and subcontractors who purchase tax-exempt materials under section 42-5061(A)(27) and incorporate them into taxable projects under section 42-5075(O).

• Allows contractors to obtain certificates from property owners stating the owner is liable for any TPT due, with certificates valid for no more than one year and renewable thereafter.

• Creates an offset mechanism allowing persons who paid TPT on materials reasonably believed to qualify for section 42-5075(O) exemption to offset that amount against other TPT liabilities if a final determination proves the exemption did not apply.

• Requires the department to prescribe forms for certificates used by prime contractors purchasing tax-exempt materials and by persons not subject to section 42-5075 tax working on taxable projects.

• Applies to contracts entered into on or after December 31, 2020.