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This Ruling has been obsoleted by AN 94(3)

Ruling 89-100

Agricultural Services

You have inquired as to the taxability of architectural services that are rendered to municipalities or other tax-exempt entities through intermediary parties.

In situations where both the architect and the subcontractors on the job contract directly with a municipality or tax-exempt entity, the sales tax would not apply to architectural services or to the purchase of materials physically incorporated in the building. The architect should obtain a "Governmental Agency Exemption Certificate" or a "Charitable and Religious Organizations Exemption Certificate."

However, in situations where an intermediary party is involved, such as in a "turn-key" project, the tax exemption is lost both for the provider of services and on the purchase of materials because a private contractor is the purchaser of the services and materials, not the municipality.

Any exemption from tax must be granted by the General Assembly. If the you decide to pursue a legislative remedy, I suggest that you contact our Legal Division which stands ready to assist you in drafting suggested language.


September 20, 1989