ND HB1201

Contractors, subcontractors, and builders acquiring materials, supplies, or equipment for contracts with exempt entities are entitled to a sales and use tax exemption for those items of tangible personal property.

To qualify for the exemption, the contractor must present to the retailer a purchasing agent authorization letter and an exemption certificate or exemption number from the exempt entity.

The exemption applies only to building materials, supplies, or equipment that are installed or completely consumed in performing the contract with the exempt entity.

If the contractor is also a retailer with a sales tax permit, the exemption applies to materials withdrawn from inventory for use in an exempt entity contract, provided the contractor possesses the required authorization letter and exemption certificate or number.

An "exempt entity" is defined as an organization that would qualify for a sales or use tax exemption if it acquired the tangible personal property directly itself.

The Act is effective for taxable events occurring after June 30, 2011.