Instead, the carpet company owes tax on the amount it paid for the carpet. If the carpet company bills its customer for tax on the total price, it must either refund the tax to its customer or send the money to the state. In this situation, the carpet company is not entitled to keep any money it collects as tax. This tax was collected in error and may not be used to reduce the carpet company's sales tax liability on the wholesale price of the carpet. If, on the other hand, a carpet company bills separate amounts for the carpet and for installation in a residence, the carpet company must collect tax on the charge for the carpet, but not on the installation labor.
Tax is due on the total charge to install carpet in an existing nonresidential building.
This work is taxable nonresidential real property repair, remodeling, or restoration. For more information, ask for Rule 3.357 on real property repair and remodeling. We mailed to target groups of taxpayers the following notices, which explain changes in the tax law due to recent legislation. We have extra copies available. This summary of legislative changes affecting producers and purchasers of crude oil and natural gas was mailed along with July and August returns.