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REG-8-001 SCOPE AND APPLICATION (9/15/1975) |
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REG-8-002 DEFINITIONS (9/15/1975) |
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REG-8-003 REGISTRATION (12/5/1982) |
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REG-8-004 BONDING REQUIREMENTS (9/15/1975) |
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REG-8-005 RELEASE OF BONDS (9/15/1975) |
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REG-8-006 RESIDENT CONTRACTOR'S LIABILITY (9/15/1975)
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REG-8-001 SCOPE AND APPLICATION
001.01 The provisions of Nebraska law requiring nonresident contractors to register and bond both themselves and the contracts in which they intend to engage were enacted to insure that the state and its political subdivisions, including county and local governments, would receive all the contributions, fees, and taxes required to be paid or collected by nonresident individuals, firms, partnerships, corporations, or other associations for the privilege of engaging in business within this state. These contributions, fees, and taxes include, but are not limited to the following: corporate income and franchise taxes, individual income taxes, income tax withholding or estimated tax payments for the contractor and its employees, sales and use taxes, corporate registration fees and occupation taxes, contributions due under the employment security law, and county and local taxes and fees.
(Sections 77-3101 to 77-3113, R.R.S. 1943. September 15, 1975.)
002.01 Contractor shall mean any person or entity who enters into a contract and undertakes the performance of building, modifying, or dismantling real or personal property and shall include subcontractors. Examples of contractors include, but are not limited to the following: electrical, mechanical, plumbing, paving, finishing, building, heating, construction, roofing, and carpeting.
002.02 Nonresident contractor shall mean a contractor who is not domiciled in nor has maintained a permanent place of business or residence in Nebraska for a period of at least six months.
002.02A To establish residency, a contractor must maintain a place of business in this state for at least six months and not have discontinued this requirement prior to the contract date. If such a contractor has established residency at the time of the contract but discontinues his place of business after the execution thereof, he will lose his resident status and immediately become subject to the nonresident registration and bonding requirements as a nonresident contractor.
002.02B The fact that a nonresident contractor has procured a certificate of authority from the Secretary of State to transact business in Nebraska does not absolve such contractor from the registration and bonding requirements.
(Sections 21-20,105, and 77-3101, R.R.S. 1943. September 15, 1975.)
003.01 Before engaging in the business of contracting within this state, the nonresident contractor is required to (1) register as a nonresident contractor with the Department of Revenue submitting a twenty-five dollar ($25.00) fee for this purpose, and (2) register and submit an additional twenty-five dollar ($25.00) fee for each contract the nonresident contractor contemplates performing in this state.
(Section 77-3103, R.S.Supp., 1982. December 5, 1982.)
REG-8-004 BONDING REQUIREMENTS
004.01 In addition to the registration requirements discussed in Reg-8-003, each nonresident contractor is required to execute and file a bond or alternative security with the Department of Revenue on himself and on each contract which the contractor may perform within this state.
004.02 The amount of the contractor bond or alternative security required to be supplied shall be three percent of the total consideration of all contracts to be performed. In no case shall the required bond be less than one thousand dollars.
004.03
004.03A The amount of the contract bond or alternative security required to be supplied is also based on a percentage of the total consideration of the contract. This amount shall be ten percent of the contract price up to the first one hundred thousand dollars ($100,000), plus five percent of the contract price in excess of one hundred thousand dollars ($100,000) computed to the next higher one thousand dollars ($1,000). Contracts of ten thousand dollars ($10,000) or less require a bond of one thousand dollars ($1,000). Example:
Total Consideration $950,000 10% of $100,000 $10,000 5% of $850,000 $43,000 Amount of Contract Bond $53,000 004.03B The work to be performed by resident or bonded nonresident subcontractors need not be included in determining the total consideration of the contract if the nonresident prime or general contractor supplies the Department of Revenue with sufficient information indicating that these subcontractors are not subject to the provisions of this act. Such information may include, but is not limited to the following:
004.03B(1) The name, address, and amount of work to be performed by each resident or nonresident subcontractor,
004.03B(2) Sufficient evidence showing that the nonresident subcontractor has supplied the Department of Revenue with a satisfactory bond or alternative security.
004.04 The requirement that a bond or alternative security be supplied for each individual contract may be waived if the nonresident contractor obtains the prior approval of the Department of Revenue that a blanket bond or alternative security be issued for all contracts to be performed within a particular period of time. In such case, the Department of Revenue will determine the total amount of the bond or alternative security required to be supplied based on the total consideration of all contracts to be performed.
004.05 If the Department of Revenue determines that the required bond is insufficient to cover the tax liabilities involved, it shall require the bond to be increased in such amount as it may deem necessary.
004.06 An exception to the requirement of filing a contract bond with the Department of Revenue for all contracts to be performed exists when a nonresident contractor is awarded a construction contract by the Nebraska Department of Roads or the University of Nebraska. In such cases, a contract bond amounting to one hundred percent (100%) of the contract price and including all taxes and contributions due under the employment security law is required to be furnished directly to these organizations.
However, a copy of such bond must be submitted to the Department of Revenue and the registration and bonding requirements discussed in Reg-8-003 and Reg-8-004.02 must still be met.
004.07 The alternative security which may be supplied in lieu of a bond shall include, but is not limited to the following:
004.07A Certificates of deposit or certified checks issued by a bank doing business in the state and insured by the Federal Deposit Insurance Corporation in amounts not exceeding the federally insured amount and in the total amount specified by the Department of Revenue,
004.07B Investment certificates or share accounts issued by a savings and loan association doing business in this state and insured by the Federal Savings and Loan Insurance Corporation, in the amounts not exceeding the federally insured amount and in the total amount specified by the Department of Revenue.
(Sections 52-118, 77-3104, and 77-3105, R.R.S. 1943. September 15, 1975.)
005.01 After a nonresident contractor has fully performed the contract registered by him and desires to be released from his nonresident contractor and contract bonds or alternative security, he should contact the Department of Revenue. A statement from the county treasurer and assessor of each county in which the nonresident contractor performed work should accompany the request for bond release and must state that satisfactory arrangements have been made for the payment of all local taxes. A release will be granted if it is determined that all taxes and contributions including, but not limited to those noted in Reg-8-001 have been paid.
(Sections 77-3105(3), and 77-3112, R.R.S. 1943. September 15, 1975.)
REG-8-006 RESIDENT CONTRACTOR’S LIABILITY
006.01 Any resident contractor contracting with any nonresident subcontractor shall withhold sufficient money on the contract or contracts to guarantee that all taxes, including contributions due under the Employment Security Law, accruing to the State of Nebraska and its political subdivisions will be paid when due. Failure to withhold such money will render the contractor directly liable for such taxes and contributions that the nonresident subcontractor may have owed.
(Section 77-3106, R.R.S. 1943. September 15, 1975.)