Section 1320-04-05-.51 - SPECULATIVE BUILDERS(1) Persons building houses or other structures on their own property from their own plans and not under contract and offering them for sale are not considered to be selling tangible personal property or rendering a taxable service and are not taxable under the Business Tax Act.(2) If, during the course of construction of a house or other structure a builder agrees to sell the property and alters the plans to the specifications of the buyer, he shall be deemed to be a contractor and liable for the appropriate business tax on the total receipts over and above the price for which the property would otherwise be sold.(3) A builder is subject to the provisions of paragraph (2) if:(a) He contracts to sell a building and lot prior to completion of the construction of the building and,(b) He alters the building plans to the specifications of the buyer. Both of the conditions in subparagraphs (a) and (b) must be present in order for builder to be subject to the provisions of paragraph (2).
Tenn. Comp. R. & Regs. 1320-04-05-.51
Original rule certified June 7, 1974. Amendment filed March 18, 1983: effective June 15, 1983.Authority: T.C.A. §§ 67-1-102 and 67-4-703.