i 

APPENDIX 5A. DETAILED DATA FOR EQUIPMENT PRICE MARKUPS

TABLE OF CONTENTS

5A.1 DETAILED MECHANICAL CONTRACTOR DATA ............................................... 5A-1

5A.2 ESTIMATION OF CONTRACTOR MARK-UP VARIATION ................................. 5A-2

5A.3 STATE SALES TAX RATES ...................................................................................... 5A-3

LIST OF TABLES

Table 5A.1.1 Mechanical Contractor Expenses and Markups Used To Scale the Incremental 

Markups ............................................................................................................ 5A-1

Table 5A.2.1 Mechanical Contractor Baseline Markups by State, 2007 .................................. 5A-2

Table 5A.3.1 State Sales Tax Rates (Percent) .......................................................................... 5A-3
5A-1 

APPENDIX 5A. DETAILED DATA FOR EQUIPMENT PRICE MARKUPS

5A.1 DETAILED MECHANICAL CONTRACTOR DATA

Table 5.4.1 of chapter 5 provides mechanical contractor revenues and costs in aggregated 

form. The more disaggregated breakdown of costs used to scale the incremental markup are 

shown in Table 5A.1.1 by both dollar value and percentage terms from the 2007 Census of 

Business; only the categories in the ‘Scaling’ column of Table 5A.1.1 that scaled with both the 

baseline and incremental markups are marked when there is an incremental change in equipment 

costs. Census of Business data also were used to calculate relative markups in Table 5A.2.1. 

These relative markups were applied to both baseline and incremental markups. Finally, 

combined state and local sales tax rates from the State Sales Tax Clearinghouse are shown in 

Table 5A.3.1. 

Table 5A.1.1 Mechanical Contractor Expenses and Markups Used To Scale the 

Incremental Markups

Item Dollar Value

$

Percentage

% Scaling

Total Cost of Equipment Sales 107,144,428 67.80

Cost of materials, components, and supplies 59,023,964 37.35

Payroll, construction workers 31,373,558 19.85

Cost of construction work subcontracted out to others 13,646,192 8.64

Cost of selected power, fuels, and lubricants 3,100,714 1.96

Gross Margin 50,895,129 32.20

Payroll Expenses 27,626,376 17.48

Fringe benefits, all employees 13,585,040 8.60 Baseline

Payroll, other employees 14,041,336 8.89

Occupancy Expenses

Rental cost for machinery, equipment, and buildings + 

Cost of repairs to buildings and other structures + 

Purchased communication services

3,436,208 2.17 Baseline

Other Operating Expenses 6,165,776 3.90

Baseline and

Incremental

Depreciation charges during year 2,297,550 1.50

Computers + Insurance and other business services + 

Advertising and Promotions + Taxes and License Fees 3,868,226 2.40

Net Profit Before Income Taxes 13,666,769 8.60 Baseline and

Incremental

Source: U.S. Census Bureau. 2007. Plumbing, Heating, and Air-Conditioning Contractors: 2007. Sector 23: 238220. Construction: Geographic 

Area Series. Detailed Statistics for Establishments: 2007. 

Note: Mechanical contractor costs and expenses are first presented as total dollar values and then converted to percentage values. 
5A-2 

5A.2 ESTIMATION OF CONTRACTOR MARK-UP VARIATION

Table 5A.2.1 Mechanical Contractor Baseline Markups by State, 2007 

State Number 

of Firms

Value of 

Construction 

$000

Cost of 

Subcontract 

Work 

$000

Cost of 

Materials 

$000

Construction 

Payroll 

$000

Baseline 

Markup

Relative 

Markup

Alabama 1,425 2,010,305 113,782 876,341 411,100 1.435 0.972

Alaska 229 583,171 52,245 171,575 120,909 1.692 1.146

Arizona 1,510 3,522,116 179,103 1,508,903 638,469 1.514 1.025

Arkansas 1,045 1,065,754 68,417 461,924 213,054 1.434 0.971

California 7,272 16,726,969 1,070,065 6,330,469 3,464,667 1.539 1.043

Colorado 2,015 3,056,988 261,734 1,195,057 627,663 1.467 0.993

Connecticut 1,321 1,704,668 145,740 628,720 361,411 1.501 1.016

Delaware 306 481,900 D D 163,343 1.421 0.962

District of 

Columbia 22 34,600 D D 50,439 1.458 0.988

Florida 5,069 9,061,426 783,859 3,736,811 1,733,721 1.449 0.981

Georgia 2,534 4,700,799 365,010 2,224,110 740,722 1.412 0.956

Hawaii 280 800,221 46,753 270,723 137,646 1.758 1.191

Idaho 594 900,698 62,252 387,181 167,732 1.459 0.988

Illinois 3,848 7,641,642 602,251 2,833,489 1,622,307 1.511 1.023

Indiana 1,867 4,002,323 431,558 1,319,523 854,157 1.536 1.040

Iowa 1,066 1,868,483 144,869 801,239 359,775 1.431 0.969

Kansas 966 1,395,359 106,307 580,764 279,636 1.443 0.978

Kentucky 1,219 1,747,925 128,902 674,500 353,958 1.510 1.023

Louisiana 1,469 1,997,044 162,063 776,784 378,582 1.516 1.027

Maine 458 580,816 46,692 234,993 113,162 1.471 0.996

Maryland 2,024 5,329,135 698,381 2,009,957 1,031,222 1.425 0.965

Massachusetts 2,520 4,099,301 488,098 1,475,525 817,754 1.474 0.998

Michigan 3,051 4,420,638 604,850 1,569,113 841,985 1.466 0.993

Minnesota 1,635 3,402,921 386,669 1,230,126 698,535 1.470 0.995

Mississippi 655 1,025,452 76,709 449,851 189,011 1.433 0.970

Missouri 1,816 3,335,124 345,285 1,319,142 689,171 1.417 0.960

Montana 432 483,578 42,988 216,792 85,678 1.400 0.948

Nebraska 683 1,004,296 94,170 455,264 205,904 1.330 0.900

Nevada 498 2,327,842 121,091 988,605 490,859 1.454 0.985

New 

Hampshire 531 620,761 39,784 D 128,512 1.472 0.997

New Jersey 3,551 5,062,336 496,174 1,825,407 1,015,432 1.517 1.027

New Mexico 599 891,914 67,987 356,961 170,711 1.497 1.014

New York 5,750 10,364,779 1,219,468 3,568,182 1,972,687 1.533 1.038

North Carolina 2,978 5,111,396 341,129 2,288,841 1,001,832 1.407 0.953

North Dakota 272 360,683 36,037 148,617 70,403 1.414 0.958

Ohio 3,514 5,618,591 568,837 2,115,568 1,125,401 1.475 0.999

Oklahoma 1,158 1,352,943 94,153 581,079 249,032 1.464 0.991

Oregon 1,031 1,893,678 124,070 701,468 412,418 1.530 1.036

Pennsylvania 3,653 6,487,476 579,901 2,628,602 1,370,864 1.417 0.959

Rhode Island 397 631,202 56,234 229,692 124,727 1.537 1.041

South Carolina 1,472 1,991,303 126,123 847,690 352,877 1.501 1.016

South Dakota 337 386,186 11,037 158,375 69,605 1.616 1.094
5A-3 

Table 5A.2.1 (cont)

State Number of 

Firms

Value of 

Construction 

$000

Cost of 

Subcontract 

Work 

$000

Cost of 

Materials 

$000

Construction 

Payroll 

$000

Baseline 

Markup

Relative 

Markup

Tennessee 1,370 2,595,613 189,293 1,159,952 484,997 1.415 0.958

Texas 5,653 10,810,308 823,920 4,605,624 2,102,520 1.435 0.972

Utah 892 1,746,398 146,052 769,140 319,812 1.414 0.958

Vermont 282 294,806 21,021 D 63,015 1.472 0.997

Virginia 2,547 4,623,151 347,055 1,791,740 960,534 1.492 1.010

Washington 1,602 4,111,543 370,741 1,546,819 816,533 1.504 1.018

West Virginia 416 655,100 D D 90,660 1.464 0.991

Wisconsin 1,839 2,926,545 234,962 1,125,779 662,893 1.446 0.979

Wyoming 262 289,391 14,391 128,922 54,792 1.461 0.989

Average Baseline Markup 1.477 1.000

Standard Deviation 0.070

Relative Standard Deviation 0.048

Source: U.S. Bureau of the Census. American Factfinder. 2007Economic Census. Sector 23: Construction: Geographic Area Series: 

Detailed Statistics for Establishments: 2007. 

http://factfinder.census.gov/servlet/IBQTable?_bm=y&-ds_name=EC0723A1&-NAICS2007=238220&-_lang=en and

Notes: The Census Bureau withheld data for some states.

Markups may vary across states for several reasons, including differences in firm size.

5A.3 STATE SALES TAX RATES 

Table 5A.3.1 State Sales Tax Rates (Percent)

State

Combined 

State and 

Local Tax

Rate

State

Combined 

State and 

Local Tax 

Rate

State

Combined 

State and 

Local Tax 

Rate

Alabama 0.0825 Kentucky 0.0600 North Dakota 0.0585

Alaska 0.0140 Louisiana 0.0875 Ohio 0.0680

Arizona 0.0815 Maine 0.0500 Oklahoma 0.0820

Arkansas 0.0820 Maryland 0.0600 Oregon —

California 0.0920 Massachusetts 0.0625 Pennsylvania 0.0640

Colorado 0.0640 Michigan 0.0600 Rhode Island 0.0700

Connecticut 0.0600 Minnesota 0.0720 South Carolina 0.0715

Delaware — Mississippi 0.0700 South Dakota 0.0550

Dist. of Columbia 0.0600 Missouri 0.0725 Tennessee 0.0945

Florida 0.0665 Montana — Texas 0.0805

Georgia 0.0695 Nebraska 0.0600 Utah 0.0670

Hawaii 0.0435 Nevada 0.0785 Vermont 0.0605

Idaho 0.0605 New Hampshire — Virginia 0.0500

Illinois 0.0820 New Jersey 0.0695 Washington 0.0880

Indiana 0.0700 New Mexico 0.0655 West Virginia 0.0600

Iowa 0.0685 New York 0.0845 Wisconsin 0.0545

Kansas 0.0805 North Carolina 0.0785 Wyoming 0.0535

Source: The Sales Tax Clearinghouse at https://thestc.com/STRates.stm (accessed on November 2, 2011).