42-5007. Taxpayer security; out-of-state prime
contractors; definition
A. In lieu of the bond required under section 42-1102 or 42-5006, a person who is
in the construction business, who does not have a principal place of business in this
state and who enters into a prime construction contract to be performed in this state, at
the time the contract is entered into, shall furnish to the director or the director's
agent a surety bond or other acceptable security in an amount equal to the gross receipts
to be paid under the contract multiplied by the aggregate rates of the applicable taxes
imposed by this chapter to secure payment of the tax imposed by this chapter on the gross
receipts from the contract and shall obtain a certificate from the director or the
director's agent that the requirements of this section have been met.
B. If the total amount to be paid under the contract is changed by ten per cent or
more after the date the bond or other security is furnished, the person shall increase or
decrease, as the case may be, the amount of the bond or security within fourteen days
after the change.
C. If a person fails to comply with subsection A or B of this section, the director
or the director's agent may:
1. Demand by certified mail or in person that the person comply. On the person's
failure to comply within ten days after the date of the mailing of such demand, the
director may institute a proceeding to enjoin the person's business as provided in
section 42-1103.
2. When a serious and immediate risk exists that an amount of tax due or reasonably
expected to become due from the person on gross receipts from a prime construction
contract will not be paid, request the person to comply, and, on failure to comply
immediately, the director may without further notice apply to tax court for an injunction
under section 42-1103.
D. This section does not apply if the total gross receipts under the construction
contract, including any change in such amount, are to be less than fifty thousand
dollars.
E. A city, town or county or an agency of this state shall not issue a building or
other construction permit to any person who is subject to the requirements of this
section without having first been furnished by the construction contractor with the
certificate from the director or the director's agent provided under subsection A of this
section.
F. In this section "principal place of business" means a location where a person
has continuously operated a facility with at least one full-time employee for the
preceding twelve consecutive months.
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