Florida Building Contractor Business/Finance Practice Exam

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Which of the following must be maintained by contractors concerning state taxes?

Keep a log of tax payments
Report and pay regularly
Only report if income exceeds a threshold
Pay taxes annually

The correct answer is: Report and pay regularly

Contractors are required to report and pay state taxes on a regular basis to remain compliant with tax regulations. This means they must submit accurate information on all taxable income and ensure that the taxes owed are paid in a timely manner according to the state's schedule. Regular reporting helps ensure that contractors adhere to the obligations set forth by the state, avoiding penalties or fines that could arise from late payments or inaccurate reports. This requirement is key for maintaining legal operations and financial integrity within the construction industry. Maintaining a log of tax payments is not a specific requirement enforced by the state, although it may be a useful practice for record-keeping purposes. Only reporting income when it exceeds a threshold is not applicable for contractors, as all income must be reported regardless of the amount. Lastly, while some taxes may be paid annually, the regularity of payments often depends on factors like the volume of business conducted, making regular reporting and payments more vital for compliance.