Which party is responsible for paying taxes in the contract?

Which party is responsible for paying taxes in the contract?

• A. The Contractor
• B. The Owner
• C. The Architect
• D. The Subcontractor

Answer: (A)

Taxes tied to performing the work are borne by the party delivering the work—the contractor. This includes payroll taxes for workers and any taxes on materials the contractor purchases to complete the project. The owner funds the project, but the tax obligations on the contractor’s operations and on materials bought by the contractor are their responsibility. The architect and subcontractors aren’t responsible for those contract-related taxes under standard practice, unless the contract specifically says otherwise.

Taxes tied to performing the work are borne by the party delivering the work—the contractor. This includes payroll taxes for workers and any taxes on materials the contractor purchases to complete the project. The owner funds the project, but the tax obligations on the contractor’s operations and on materials bought by the contractor are their responsibility. The architect and subcontractors aren’t responsible for those contract-related taxes under standard practice, unless the contract specifically says otherwise.