A201 & Taxes

project management
1

Am reviewing my mock exam (FORM 2, Question 1)

The question is: “A contractor has won the bid for a hospital project that will take 18 months to construct but will span three years. According to AIA A201, who pays for the taxes during the construction of the building?”

I chose “The building owner pays all the taxes directly.” because I understood “the taxes” to be property taxes.

The answer, according to black spectacles is “The general contractor pays all taxes as part of their contract” and explains, “The AIA A201 Section 3.6 says the contractor shall pay sales, consumer, use, and similar taxes for the work.”

Of course, the contractor pays sales, etc. during the course of construction but the contractor doesn’t pay the property taxes.

How is one supposed to know WHICH taxes, when all the question asks are “THE taxes”???

The question is poorly worded, in my humble opinion - it should state which taxes - not ALL taxes. The contractor does NOT pay the property taxes during construction and therefore does not pay ALL taxes.

2

@gerald -

Thank you so much for your feedback. I will bring this to the attention of our team that manages our questions.

Elise

1 Like
3

@coacheliserenwick Here from 2024 with the same issue. Since “The contractor pays for all employment and sales taxes. The owner pays for other taxes.” is an option, I assumed property taxes were also included in “the taxes”. Consider including “sales, consumer, and use” from the answer explanation in the question itself.

4

I knew some questions are not clear and some descriptions are fighting with each other. I did this question right, since I believe contractor paid most of the tax during the construction also same for utility, permit and so on.