Pennsylvania Code › Title 61 - REVENUE › Part I - Department of Revenue › Subpart B - General Fund Revenues › Article II - Sales and Use Tax › Chapter 46 - CONSTRUCTION CONTRACTORS › Section 46.4 - Fixed price construction contract

Current through Register Vol. 54, No. 28, July 13, 2024
(a)
Definition.
The term
					 "fixed price construction contract," when used in this section, shall mean any
					 construction contract, either in written or paragraph form, containing a bid
					 price which has been accepted, which bid price cannot be altered, modified or
					 withdrawn by either of the parties to the contract, unless the context clearly
					 indicates otherwise.
(b)
Contracts which are not fixed price contracts.
Contracts which
					 are not fixed price contracts shall conform with the following:
(1) A contract containing provisions
					 providing that the owner may, by written order, direct a contractor to perform
					 certain additional work or services or make changes or alterations in the work
					 or omit work or services, or providing that the contractor shall receive cost
					 plus a fixed percentage for any additional or extra work, is not a fixed price
					 contract.
(2) A construction
					 contract containing a provision substantially similar to any one of the
					 following is not deemed to be a fixed price construction contract:
Example 1.
If the manufacturer's price
						to the Builder for the basic house and other materials is increased prior to
						delivery thereof to the Builder, the Builder may elect to add such increase to
						the total purchase price, in which event the Owner may accept such increase in
						writing or terminate this Agreement in writing within seven days after
						notification of the increase and be refunded the down payment.
Example 2.
This Agreement is conditioned
						upon the ability of the Seller to complete the above described premises at
						present prices for material existing at the date of this Agreement with respect
						to operative home building. If Seller at any time or for any reason is unable
						to complete the above described premises at present prices for material, or
						finds that his material costs for the premises or any part thereof still to be
						constructed will exceed the material costs prevailing at the date of this
						Agreement, the Seller is hereby given the option to cancel this contract upon
						written notice to the Buyer, in which event the full deposit money shall be
						returned to the Buyer without interest and this Agreement shall thereupon
						become cancelled and void, and the Seller shall have no further liability
						whatsoever to the Buyer. However, if the Seller is unable to complete the above
						described property at present prices for material, the Seller may proceed with
						said construction and give notice to the Buyer of the increase in the material
						costs, and if the Buyer, within five calendar days after such notice, shall
						agree in writing to pay such increased costs at or prior to settlement, this
						Agreement as so modified shall continue in full force and effect, otherwise
						this Agreement at the option of the Seller shall become cancelled and
						void.
Example 3.
All present and future taxes
						imposed by any federal, state or local authority which we may be required to
						pay or collect, upon or with reference to the sale, purchase, transportation,
						delivery, storage, use or consumption of the materials or services covered
						hereby, including taxes upon or measured by the receipts therefrom, shall be
						for your account.
Example 4.
All excise, privilege,
						occupational, sales, use and other taxes applicable to the purchase, sale or
						use of fencing covered by this proposal or applicable to or measured by the
						receipts of the contractor therefrom shall be in addition to the price quoted
						herein and shall be for the sole account of the purchaser.