Accounting & Tax Planning for Louisville Contractors
We work with general contractors, remodelers and the licensed trades (HVAC, plumbing and electrical) across the Louisville area. Construction in Kentucky has tax rules that catch contractors who came up doing the work, not the books, and most of them show up on a job before they show up on a return.
Call (502) 805-7768 or book a free consultation.
What's different here
You pay the tax on materials, not your customer
Kentucky treats a contractor as the consumer of the materials built into a customer's property. You pay sales or use tax when you buy them, you can't hand the supplier a resale certificate for them, and anything bought from an out-of-state or online seller that didn't charge Kentucky tax still owes use tax. It belongs in the bid, and it is one of the first things an audit looks at.
Jobs outside Jefferson County
Louisville Metro taxes a business's net profits, and when the work isn't all in Louisville the return apportions profit by where receipts and payroll were earned. Jobs in Oldham, Bullitt, Shelby or other counties with their own occupational taxes can mean filings there too, and crew withholding follows where the work was done, not where the shop is.
State licenses for the trades, local ones for everyone else
Electrical, plumbing and HVAC work is licensed by the state's Department of Housing, Buildings and Construction; general contractors and remodelers are licensed by the city or county. Keeping the licensed name, the entity on your contracts and the entity on your tax returns lined up saves real trouble at bid time and at tax time.
Kentucky doesn't follow federal bonus depreciation
A truck or piece of equipment written off in full on the federal return can be depreciated more slowly on the Kentucky return, which is why the state figure on a big equipment year surprises people. We plan the purchase with both returns in view.
Southern Indiana work
Kentucky and Indiana's reciprocal agreement covers employees' wages. It doesn't cover your business's income from jobs across the river, which Indiana taxes where the work was done.
Common questions
Do Louisville contractors charge sales tax on their jobs?+
Generally not on work that improves real property. In Kentucky the contractor is treated as the consumer of the materials and pays sales or use tax when buying them, so that cost belongs in the price of the job. Retail sales of goods that are not installed are a different case.
My crew works jobs in several counties. Where do we owe occupational tax?+
Louisville Metro apportions a business's net profit by the share of receipts and payroll earned there, and other Kentucky cities and counties with occupational taxes can have their own filings and withholding. We map where your jobs actually were and file where they require it.
Do you only work with Louisville contractors?+
No. Louisville is home, and we also work with contractors across the other states we're licensed in through our secure client portal.
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