South Carolina Contractor License Exam — All Questions

A construction business is organized as a corporation. If the corporation is sued and cannot pay a judgment, what is generally at risk?

• a.The personal homes and bank accounts of every shareholder
• b.The personal assets of the highest-paid officer only
• c.The assets owned by the corporation itself, not the shareholders' personal assets✓
• d.Nothing, because corporations cannot be sued

A corporation is a separate legal entity from its owners (shareholders). This separation creates limited liability: creditors and judgments generally reach only the assets the corporation owns, and shareholders risk losing only what they invested — not their personal homes or savings. That protection can be lost only in unusual cases such as fraud or 'piercing the corporate veil.'

In a general partnership, how are the general partners liable for the debts of the business?

• a.Only up to the amount each partner originally invested
• b.Personally and jointly liable for all partnership debts✓
• c.Not liable at all, because the partnership pays its own debts
• d.Liable only for debts they personally signed for

A general partnership does not shield its owners. Each general partner has unlimited personal liability and is jointly liable for the partnership's debts and obligations — a creditor can pursue any partner's personal assets. This unlimited exposure is a key reason many contractors instead form an LLC or corporation, which provide limited liability.

Which statement best describes a limited liability company (LLC) for a contracting business?

• a.It gives owners limited liability while normally allowing profits to pass through to owners' personal tax returns✓
• b.It requires the business to pay corporate income tax and forbids pass-through taxation
• c.It makes every member personally liable for all company debts
• d.It can be owned by only one person and never by a group

An LLC combines the liability protection of a corporation with the tax flexibility of a partnership. Members are generally shielded from personal liability for business debts, and by default the LLC's profits and losses 'pass through' to the members' individual tax returns, avoiding the double taxation of a standard C corporation. An LLC may have one member or many.

A contractor's total direct cost for a job is $18,000. The contractor adds a 15% markup to cover overhead and profit. What is the bid price?

• a.$18,150
• b.$18,270
• c.$20,700✓
• d.$21,150

Markup is a percentage added on top of cost. Multiply the cost by (1 + markup): $18,000 x 1.15 = $20,700. The markup dollars are $18,000 x 0.15 = $2,700, which is added to the $18,000 cost to reach the bid price. Markup covers both company overhead and profit.

A job costs the contractor $8,000. The contractor wants a 20% gross profit MARGIN (profit as a percentage of the selling price). What must the selling price be?

• a.$9,600
• b.$10,000✓
• c.$9,800
• d.$10,400

Margin is measured against the selling price, not the cost, so you cannot simply add 20% to cost. Price = cost / (1 - margin) = $8,000 / (1 - 0.20) = $8,000 / 0.80 = $10,000. Check: profit is $2,000, and $2,000 / $10,000 = 20% margin. Adding 20% to cost ($9,600) would only give a 16.7% margin — a common and costly estimating error.

How many cubic yards of concrete are needed for a slab 27 ft long, 30 ft wide, and 4 inches thick?

• a.3.3 cubic yards
• b.6.7 cubic yards
• c.8.5 cubic yards
• d.10 cubic yards✓

First convert thickness to feet: 4 in / 12 = 0.3333 ft. Volume in cubic feet = 27 x 30 x 0.3333 = 270 cubic feet. Convert to cubic yards by dividing by 27 (there are 27 cubic feet in a cubic yard): 270 / 27 = 10 cubic yards. Getting units consistent — feet for all three dimensions — is the key step.

On a project where the exact quantities of excavation and fill are not yet known, which bidding method best protects both owner and contractor from large quantity surprises?

• a.A unit-price contract, paying a set price per unit for the actual quantity installed✓
• b.A lump-sum contract with no measurement of quantities
• c.A verbal handshake agreement
• d.A cost-plus contract with no cost records kept

Unit pricing sets a fixed price per unit (for example, per cubic yard of excavation), and the contractor is paid for the actual measured quantity. This fairly handles uncertain quantities: the owner pays only for work performed, and the contractor is protected if quantities grow. A lump sum forces the contractor to guess and gamble on the quantity, which is risky when the amount is genuinely unknown.

Which set of elements is generally required for a contract to be legally valid and enforceable?

• a.A notary stamp, a witness, and a deposit
• b.A blueprint, a permit, and a bond
• c.Offer, acceptance, consideration, legal capacity, and a lawful purpose✓
• d.A handshake, a logo, and an invoice

A valid contract requires an offer, acceptance of that offer (mutual assent), consideration (something of value exchanged by each side), parties with legal capacity to contract, and a lawful purpose. If any element is missing — for example, no consideration or an illegal objective — the agreement may be void or unenforceable. Notaries, permits, and bonds are sometimes useful but are not the core elements of contract formation.

A construction contract states that the contractor will pay the owner $500 for each day the project finishes late, agreed in advance as a reasonable estimate of the owner's loss. This clause is best described as:

• a.A performance bond
• b.A liquidated damages clause✓
• c.A mechanic's lien
• d.A punitive penalty that courts always strike down

Liquidated damages are a dollar amount the parties agree to IN ADVANCE as compensation for a breach (commonly late completion) when the actual loss would be hard to calculate. To be enforceable the amount must be a reasonable pre-estimate of the harm, not a punishment. A performance bond is a surety guarantee, and a mechanic's lien secures payment for labor and materials — different tools entirely.

The owner asks the contractor to add a bathroom that was not in the original signed contract. What is the correct way to authorize and price this added work?

• a.A written change order signed by both parties before the work proceeds✓
• b.A verbal 'go ahead' with no documentation
• c.An adjustment made quietly on the final invoice
• d.A new lawsuit filed against the owner

A change order is a written amendment that documents a modification to the scope, price, or schedule and is signed by both parties. Handling changes in writing before performing the work protects the contractor's right to be paid for the extra work and prevents disputes about what was authorized. Relying on verbal approvals is a leading cause of payment disputes.

Under the Statute of Frauds, which of the following is generally required to be in writing to be enforceable?

• a.A one-hour verbal agreement to sweep a job site
• b.A casual promise to lend a friend a hammer
• c.An agreement to buy lunch for the crew
• d.A contract for the sale of land or an interest in real property✓

The Statute of Frauds requires certain categories of contracts to be in writing and signed to be enforceable — most notably contracts for the sale of land or interests in real property, and agreements that cannot be performed within one year. This is why construction and real-property agreements are documented in writing. Minor, short, everyday arrangements are not covered.

In a Critical Path Method (CPM) schedule, the 'critical path' is:

• a.The path with the most expensive activities
• b.The longest sequence of dependent activities, which determines the shortest possible project duration✓
• c.The path that uses the newest equipment
• d.Any path that has the most float

The critical path is the longest chain of dependent activities through the network. Because it is the longest path, it sets the minimum time in which the whole project can finish. Activities on the critical path have zero float — delaying any one of them delays the entire project. It is about time and dependency, not cost or equipment.

'Float' (also called slack) for a scheduled activity means:

• a.The amount of time an activity can be delayed without delaying the project's completion date✓
• b.The amount of money left in the activity's budget
• c.The number of extra workers assigned to the activity
• d.The percentage of the activity that is already complete

Float (slack) is the scheduling flexibility of an activity — how long it can slip before it pushes out the project finish date. Activities on the critical path have zero float. Understanding float lets a manager shift non-critical work and reallocate crews without harming the overall completion date. It is a measure of time flexibility, not money or manpower.

During construction the contractor finds the plans and specifications conflict and needs clarification from the architect. The standard document used to formally ask this question is a:

• a.Certificate of occupancy
• b.Lien waiver
• c.Request for Information (RFI)✓
• d.Notice to proceed

A Request for Information (RFI) is the formal, written channel a contractor uses to ask the design team to clarify or resolve gaps, conflicts, or ambiguities in the drawings and specifications. Documenting questions and answers through RFIs creates a paper trail, avoids guesswork, and supports later claims if the answer changes the cost or schedule.

What is the primary purpose of a Gantt (bar) chart on a construction project?

• a.To calculate payroll taxes for each employee
• b.To show project activities as bars along a timeline so start dates, durations, and overlaps are easy to see✓
• c.To record the exact chemical composition of the concrete
• d.To replace the need for any building permits

A Gantt chart displays each task as a horizontal bar positioned and sized along a time axis, making it easy to communicate when activities start and finish, how long they take, and where they overlap. It is a scheduling and communication tool. It does not perform payroll, material testing, or permitting functions.

A contracting company has current assets of $240,000 and current liabilities of $120,000. What is its current ratio?

• a.0.5 to 1
• b.1.2 to 1
• c.2.0 to 1✓
• d.12 to 1

Current ratio = current assets / current liabilities = $240,000 / $120,000 = 2.0. A ratio of 2.0 means the company has $2 of short-term assets for every $1 of short-term debt, which generally indicates healthy short-term liquidity. Sureties and lenders watch this ratio closely; a ratio below 1.0 signals the company may struggle to pay near-term obligations.

Working capital is calculated as:

• a.Current assets minus current liabilities✓
• b.Total revenue minus total expenses for the year
• c.The value of all equipment the company owns
• d.The owner's original cash investment

Working capital = current assets - current liabilities. It measures the short-term funds available to run daily operations, buy materials, meet payroll, and absorb delays before receivables come in. Positive working capital is essential in construction because contractors often pay costs long before the owner pays them. It is different from annual net profit and from equipment value.

On a project, the owner withholds 10% from each progress payment until the work is satisfactorily completed. This withheld amount is called:

• a.A liquidated damage
• b.Retainage (retention)✓
• c.A change order
• d.Overhead

Retainage (retention) is a portion of each progress payment the owner holds back — commonly 5% to 10% — and releases after the contractor satisfactorily completes the work and addresses punch-list items. It gives the owner leverage to ensure completion, but it also strains the contractor's cash flow, so contractors must plan for it and pass appropriate retainage terms down to subcontractors.

Why do contractors use job costing (tracking costs to each specific project)?

• a.Because the law forbids one combined company bank account
• b.To avoid ever having to file a tax return
• c.Only to make the paperwork look more professional
• d.To compare actual costs against the estimate for each job and see which jobs are profitable✓

Job costing assigns labor, materials, equipment, and subcontractor costs to each individual project. This lets the contractor compare actual costs to the original estimate in real time, catch overruns early, price future work more accurately, and identify which types of jobs actually make money. Without job costing, a company can be busy and still lose money without knowing which project caused the loss.

Under OSHA construction standards, at what height above a lower level does fall protection generally become required for workers on a construction site?

• a.2 feet
• b.4 feet
• c.6 feet✓
• d.20 feet

OSHA's construction fall-protection rule (29 CFR 1926.501) generally requires protection — such as guardrails, safety nets, or personal fall-arrest systems — when a worker is exposed to a fall of 6 feet or more to a lower level. (Note the general-industry trigger is 4 feet, but on construction sites the 6-foot rule applies.) Falls are consistently a leading cause of construction fatalities, which is why this threshold is heavily tested and enforced.

According to the hierarchy of controls, which method of protecting workers from a hazard is MOST effective and should be considered first?

• a.Eliminating the hazard entirely✓
• b.Providing personal protective equipment (PPE)
• c.Posting a warning sign
• d.Writing the hazard into a safety manual

The hierarchy of controls ranks protections from most to least effective: elimination, substitution, engineering controls, administrative controls, and finally PPE. Removing the hazard entirely is best because it does not depend on worker behavior or equipment holding up. PPE is the last line of defense — it only reduces exposure and relies on correct, consistent use, so it is the least reliable control on its own.

OSHA requires that a trench or excavation be protected by sloping, shoring, or a protective (trench) box once it reaches what depth?

• a.3 feet
• b.5 feet✓
• c.10 feet
• d.15 feet

Under OSHA's excavation standard (29 CFR 1926.652), a protective system — sloping/benching, shoring, or a trench box (shield) — is generally required for trenches 5 feet deep or greater (unless the excavation is entirely in stable rock). A registered professional engineer must design protection for trenches deeper than 20 feet. Cave-ins are frequently fatal, so a competent person must inspect excavations daily.

Who is responsible for providing a safe workplace and requiring the use of appropriate personal protective equipment on a job site?

• a.Only the individual workers themselves
• b.Only the equipment manufacturer
• c.Only OSHA inspectors
• d.The employer✓

Under the OSH Act's General Duty Clause and OSHA standards, the employer has the primary legal duty to furnish a workplace free from recognized hazards, to assess the job for hazards, and to provide and require appropriate PPE (often at no cost to the employee). Workers must follow safety rules and use provided equipment, but the core obligation to create a safe workplace rests with the employer.

An employee is injured while framing a house during work hours. Which system is designed to cover the employee's medical bills and lost wages regardless of who was at fault?

• a.The employee's personal auto insurance
• b.Workers' compensation insurance✓
• c.A performance bond
• d.The building permit fee

Workers' compensation is a no-fault system: an employee injured on the job receives medical care and partial wage replacement without having to prove the employer was negligent, and in exchange the employer is generally protected from most injury lawsuits. Carrying required workers' compensation coverage is a fundamental legal obligation for contractors with employees. A bond and a permit serve entirely different purposes.

Under the federal Fair Labor Standards Act (FLSA), a covered nonexempt employee must generally be paid overtime for hours worked beyond:

• a.8 hours in a single day, in every state
• b.35 hours in a week
• c.40 hours in a workweek, at one-and-one-half times the regular rate✓
• d.60 hours in a week, at the regular rate

The FLSA sets the federal overtime rule: covered nonexempt employees must receive at least 1.5 times their regular rate for hours worked over 40 in a workweek. The federal standard is weekly, not daily (some states add their own daily-overtime rules, but the nationwide FLSA baseline is the 40-hour workweek). Misclassifying workers to dodge overtime is a common and costly violation.

Which factor most strongly suggests a worker should be classified as an EMPLOYEE rather than an independent contractor?

• a.The business controls how, when, and where the work is done and provides the tools✓
• b.The worker runs an independent business serving many clients and sets their own methods
• c.The worker supplies their own tools and can profit or lose based on their own decisions
• d.The worker is free to accept or reject jobs from many different companies

The central test for classification is the degree of control and independence. When the business directs how, when, and where the work is performed and supplies the tools, the worker looks like an employee. Independent contractors typically control their own methods, invest in their own tools, serve multiple clients, and bear the risk of profit or loss. Misclassifying employees as contractors to avoid taxes, overtime, and workers' comp is a serious and heavily penalized violation.

What is the purpose of Form I-9 that a contractor completes for each new hire?

• a.To calculate the employee's overtime rate
• b.To register the employee with the local building department
• c.To order the employee's personal protective equipment
• d.To verify the employee's identity and legal authorization to work in the United States✓

The federal Form I-9 is used to verify each new employee's identity and their authorization to work in the United States, as required by immigration law. Employers must complete and retain an I-9 for every employee and review acceptable documents. It is separate from tax forms (like the W-4) and from any safety, permitting, or payroll-rate functions.

What is the primary purpose of a building permit and the inspections that go with it?

• a.To generate extra tax revenue with no benefit to the public
• b.To confirm that the proposed work meets the applicable building codes for safety and to allow official inspection of the work✓
• c.To guarantee the contractor will make a profit on the job
• d.To replace the need for a written contract with the owner

A building permit is the jurisdiction's authorization to perform construction that meets the adopted building codes, and the required inspections verify that the work actually complies at key stages. The core purpose is protecting public health and safety — sound structures, safe electrical and plumbing systems, and proper egress. Permits are not a revenue trick, a profit guarantee, or a substitute for the owner-contractor contract.

Before a newly constructed building may be legally occupied, the building department typically must issue a:

• a.Certificate of occupancy✓
• b.Lien waiver
• c.Bid bond
• d.Change order

A certificate of occupancy (CO) is the document the building official issues after final inspections confirm the building complies with the code and is safe to occupy for its intended use. Occupying a building without a required CO can lead to fines and forced vacancy. A lien waiver relates to payment, a bid bond to the bidding process, and a change order to scope changes — none of them authorize occupancy.

A contractor must set a new house a minimum distance from the property line. Which type of rule most directly governs this required setback?

• a.The electrical code
• b.OSHA fall-protection standards
• c.Local zoning ordinances✓
• d.The workers' compensation statute

Setbacks — the minimum required distances between a structure and the property lines — are established by local zoning ordinances, which regulate how land may be used and where buildings may be placed. Building codes govern how a structure is built (its safety and construction), while zoning governs where and what may be built. Distinguishing zoning (land use) from building codes (construction standards) is a fundamental concept for contractors.

Since 2023 (Act H.4115), a South Carolina commercial general or mechanical contractor's license is required when the cost of the work exceeds what amount?

• a.$5,000
• b.$10,000✓
• c.$25,000
• d.$50,000

H.4115 (2023) raised the commercial licensing threshold from $5,000 to more than $10,000. Work costing over $10,000 requires a Contractor's Licensing Board license in the proper classification and financial group before the contractor bids or contracts.S.C. Code §40-11-30 (H.4115, 2023 - license threshold raised from $5,000)

A South Carolina contractor holds a commercial license issued by the Contractor's Licensing Board (CLB). What other work does that license also authorize?

• a.Only commercial work; residential building is entirely prohibited
• b.Electrical utility transmission work statewide
• c.Only federally funded projects
• d.Residential work, because the CLB commercial license also authorizes residential building✓

In South Carolina a CLB commercial license also authorizes the holder to perform residential building work, so a commercially licensed general contractor does not need a separate residential builder's license to build homes. The reverse is not true - a residential-only credential does not authorize commercial work.S.C. Code Title 40, Ch. 11 (CLB scope of commercial license)

Under South Carolina's contractor Financial Groups (Group I through Group V), a Group III contractor qualifies for a bid limit of up to what amount?

• a.$100,000
• b.$400,000
• c.$1,000,000✓
• d.$3,000,000

The Financial Groups tie bid limit to financial strength: Group I is $100,000, Group II is $400,000, Group III is $1,000,000, Group IV is $3,000,000, and Group V is unlimited. A Group III contractor may bid projects up to $1,000,000.S.C. Code Title 40, Ch. 11 Financial Groups I-V (H.4115, 2023)

To qualify for Group V (unlimited bid limit) in South Carolina, what minimum net worth must a contractor show, and what surety bond must it post (the bond equals the group's net-worth figure)?

• a.$150,000 net worth and a $150,000 bond
• b.$250,000 net worth and a $250,000 bond
• c.$350,000 net worth and a $350,000 bond✓
• d.$1,000,000 net worth and a $1,000,000 bond

Group V (unlimited bid limit) requires a minimum net worth of $350,000 (or working capital of $250,000) and a surety bond equal to the group net worth, which is $350,000. The bond amount for each group equals that group's net-worth requirement.S.C. Code Title 40, Ch. 11 Financial Groups (Group V thresholds)

How may a South Carolina contractor meet the financial requirement for a given Financial Group, and how is the required surety bond amount determined?

• a.By showing EITHER the group's minimum net worth OR its minimum working capital; the required surety bond equals the group's net-worth figure✓
• b.Only by cash held in a business bank account, with no bond ever required
• c.By net worth only, with a flat $10,000 bond in every group
• d.By gross annual revenue, with no bond required

A contractor may qualify for a Financial Group by showing either that group's minimum net worth or its minimum working capital. The surety bond required for the group equals that group's net-worth figure, giving owners a source of recovery scaled to the contractor's bid limit.S.C. Code Title 40, Ch. 11 (qualifying by net worth or working capital; bond = net worth)

Additional work beyond the original South Carolina contract scope should be documented by:

• a.A verbal understanding reached on the jobsite
• b.A signed written change order describing the added scope, price, and time✓
• c.A recorded lien affidavit
• d.The certificate of occupancy at closeout

Changes to the scope should be authorized by a written change order, signed by both parties, that states the added work, its price, and any schedule effect. Relying on verbal approvals is a leading cause of unpaid extras and disputes.Construction contract administration (change orders)

In a standard AIA contract set, which document contains the general conditions - the rules for notices, claims, changes, and payment?

• a.G702 - Application and Certificate for Payment
• b.A701 - Instructions to Bidders
• c.B101 - Owner-Architect Agreement
• d.A201 - General Conditions of the Contract for Construction✓

A201 (current edition A201-2017) is the general conditions - the rulebook governing notices, claims, changes, payments, and disputes, and it is referenced by the owner-contractor agreement. G702 is a pay application, A701 governs bidding, and B101 is the owner-architect contract.AIA A201-2017 General Conditions

A contract clause setting a fixed dollar amount per day of delay, agreed in advance as a reasonable estimate of the owner's loss, is called:

• a.Liquidated damages✓
• b.A mechanic's lien
• c.Retainage
• d.A change order

Liquidated damages are a pre-agreed, fixed sum (often per day of delay) that represents a reasonable estimate of hard-to-measure losses. To be enforceable the amount must be a genuine estimate, not a penalty; retainage and change orders address different issues.Contract law (liquidated damages)

Which of the following is required for a construction contract to be legally enforceable?

• a.Notarization by a sitting judge
• b.Prior approval by the Contractor's Licensing Board
• c.Offer, acceptance, and consideration between competent parties for a lawful purpose✓
• d.A minimum contract price of $10,000

An enforceable contract needs an offer, acceptance, and consideration (something of value exchanged), between parties competent to contract, for a lawful purpose. Notarization and board pre-approval are not general requirements for a valid construction contract.Contract law (essential elements of a contract)

A South Carolina job costs $90,000, and the contractor targets a 25% margin on the selling price. What is the correct bid?

• a.$112,500
• b.$120,000✓
• c.$108,000
• d.$72,000

For a target margin, divide cost by (1 - margin): $90,000 / (1 - 0.25) = $90,000 / 0.75 = $120,000. Multiplying cost by 1.25 gives $112,500, which is only a 20% margin - the classic markup-vs-margin trap.Margin: price = cost / (1 - margin)

A contractor's overhead runs 15% of direct job cost. On a job with $40,000 of direct cost, what is the total cost (direct cost plus allocated overhead) before profit?

• a.$46,000✓
• b.$40,000
• c.$6,000
• d.$54,000

Overhead to allocate = 15% x $40,000 = $6,000. Total cost = direct cost + overhead = $40,000 + $6,000 = $46,000, before any profit is added. Profit is then figured on top of this total cost.Estimating (overhead allocation as a percentage of direct cost)

An estimator prices framing at $6.50 per square foot for a 2,400-square-foot house. What is the framing estimate?

• a.$9,600
• b.$16,500
• c.$14,400
• d.$15,600✓

Unit-cost estimate = unit price x quantity = $6.50 x 2,400 sq ft = $15,600. The unit-cost method multiplies a known cost per unit by the measured quantity from the takeoff.Estimating (unit-cost method)

The critical path in a project schedule is best described as the path that:

• a.Carries the most float, giving the schedule flexibility
• b.Is the shortest route through the network
• c.Is the longest chain of dependent activities, has zero float, and sets the shortest possible completion time✓
• d.Contains the fewest individual tasks

The critical path is the longest chain of dependent activities. Because no other path is longer, it fixes the earliest the project can finish, and every activity on it has zero float, so any slip pushes out completion day for day.CPM scheduling (critical path)

A South Carolina general contractor (GC-Building) wants to self-perform specialty trade work on its own project. Under CLB rules, this is generally allowed only when the specialty work is ancillary and does not exceed what share of the total project cost?

• a.20%✓
• b.50%
• c.75%
• d.100%

A South Carolina GC-Building contractor may self-perform specialty work only when it is ancillary to the building project and does not exceed about 20% of the total project cost; larger specialty scopes must be performed by an appropriately licensed contractor.S.C. CLB rule (GC-Building self-performed ancillary work)

South Carolina's Illegal Immigration Reform Act requires private employers to verify new hires' work authorization how?

• a.By checking a driver's license only
• b.By enrolling in and using the federal E-Verify program for each new hire✓
• c.There is no work-authorization verification requirement in South Carolina
• d.By filing a Form W-2 at the time of hire

South Carolina requires all private employers to enroll in and use the federal E-Verify program to confirm the work authorization of new hires. This is stricter than federal law, which does not mandate E-Verify for most private employers.S.C. Code Title 41, Ch. 8 (SC Illegal Immigration Reform Act - E-Verify)

A South Carolina general contractor pays a laborer hourly, controls his daily schedule, and supplies his tools, but issues him a 1099. On audit, the laborer is most likely:

• a.A valid independent contractor, because a 1099 was issued
• b.Classified as a volunteer, because no tax was withheld
• c.Not reviewable once a contractor agreement is signed
• d.Reclassified as an employee, exposing the contractor to back payroll taxes and penalties✓

The right to control the manner and means of the work - schedule, tools, and methods - makes someone an employee, regardless of the 1099. Misclassifying an employee as an independent contractor exposes the contractor to back FICA, FUTA, and unemployment taxes plus penalties.IRS Publication 15-A (common-law control test)

When a South Carolina contractor buys materials to be permanently installed under a lump-sum contract, who generally owes the sales or use tax on those materials?

• a.The owner, on the full contract price
• b.No one; construction materials are always exempt
• c.The contractor, as the consumer of the materials✓
• d.The project architect

A lump-sum real-property contractor is treated as the consumer of the materials and owes sales or use tax on the cost of those materials, rather than collecting tax from the owner like a retailer. The tax becomes a cost built into the bid.S.C. sales and use tax (contractor as consumer of materials)

The gross FUTA (federal unemployment) rate is 6.0% on the first $7,000 of each employee's wages. With the full credit for state unemployment tax paid on time, what is the effective FUTA rate?

• a.0.6%✓
• b.5.4%
• c.6.0%
• d.1.45%

The full 5.4% state credit reduces the 6.0% gross rate to an effective 0.6% (a maximum of about $42 per employee per year). FUTA is paid entirely by the employer and is never withheld from the employee.IRS Form 940 (FUTA rate and state credit)

Under South Carolina's mechanic's lien law, a contractor or supplier must serve and file the statement of the lien within how many days after last furnishing labor or materials?

• a.30 days
• b.90 days✓
• c.45 days
• d.One year

A South Carolina mechanic's lien statement must be served and filed within 90 days after the claimant last furnishes labor or materials to the project. Missing the 90-day window generally forfeits the lien.S.C. Code §29-5-90 (time to file the lien)

After a South Carolina mechanic's lien is filed, a suit to enforce (foreclose) it must generally be commenced within what period?

• a.Ten years
• b.30 days
• c.There is no deadline once the lien is filed
• d.Six months from the last furnishing of labor or materials✓

In South Carolina, a suit to enforce a mechanic's lien must be commenced within six months of the last furnishing of labor or materials. If suit is not filed in time, the lien dissolves and the claimant is left with ordinary contract remedies.S.C. Code §29-5-120 (time to commence enforcement suit)

On a project with the three standard construction bonds, which bond protects subcontractors and suppliers if the prime contractor fails to pay them?

• a.The payment bond✓
• b.The bid bond
• c.The performance bond
• d.The license bond

The payment bond guarantees that the prime contractor pays its subcontractors and suppliers, so it protects them. A bid bond protects the owner if a low bidder backs out; a performance bond protects the owner by assuring the work is completed.Surety bonds (payment bond protects subs and suppliers)

A South Carolina construction project that disturbs one acre or more of land generally requires what before land-disturbing activity begins?

• a.A federal wetlands hunting license
• b.No permit of any kind is required
• c.An NPDES construction stormwater permit, together with an erosion and sediment control plan✓
• d.An increase in the contractor's license bond

Land disturbance of one acre or more triggers the NPDES construction stormwater permit program (administered in South Carolina by the state environmental agency), which requires coverage and an erosion and sediment control plan to keep sediment out of waterways.Clean Water Act NPDES construction stormwater permit (1-acre threshold)

Which OSHA injury-and-illness form must be posted in a conspicuous workplace location from February 1 to April 30 each year?

• a.Form 300, the Log
• b.Form 300A, the Annual Summary✓
• c.Form 301, the Injury and Illness Incident Report
• d.Form W-2, the Wage and Tax Statement

Form 300A, the Annual Summary of the year's recordable cases, must be posted from February 1 to April 30 of the following year - and it must be posted even if there were zero recordable cases. Form 300 is the running log, and Form 301 is the single-incident report.29 CFR Part 1904 (Form 300A posting, Feb 1 - Apr 30)