PjM - Practice test - Question 16 (25147)

Project Management
1

Hello,

Please help me understand why this answer is incorrect.

The questions asks:

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 answered “The contractor pays all employment and sales taxes, the owner pays other taxes”

This has been marked incorrect. It is the contractor’s responsibility to pay for taxes on all materials, labor, and services that they purchase and provide. It is the owner’s responsibility to pay all property taxes. Why is my answer incorrect?

Thank you,

Daniel

2

Hi @dmroze! You’re correct that the owner is generally responsible for property taxes. However, as outlined in the answer explanations, AIA A201 Section 3.6 specifically requires the contractor to pay sales, consumer, use, and similar taxes associated with the Work.

While your answer makes a valid distinction regarding property taxes, it also introduces all other taxes to the owner, which is not what A201 establishes. The question is intended to test the contractor’s tax obligations under A201. Hope this helps clarify!

Charles Broomfield
Community Manager
Black Spectacles