Who includes taxes in their cost calculations?

The Materials and Resources calculator has a note that states the Material Costs "include all expenses to deliver the material to the project site INCLUDING taxes and delivery costs incurred by the contractor. Excludes labor and equipment costs once the material is delivered to the site."

The same language appears in the LEED-2009 BD+C Reference Guide in the “Calculation” paragraphs of the MRc4, MRc5, & MRc6 chapters:

“Material costs include all expenses to deliver the materials to the project site. Material costs should account for all taxes and transportation costs incurred by the contractor but exclude any cost for labor and equipment once the material has been delivered to the site.”

I have always assumed that the same definition applies to material costs for MRc3 & MRc7. However, I have always wondered how to figure taxes & shipping into MRc7 FSC calculations, which require wood costs to be itemized separately on invoices. In these cases, tax & shipping charges are typically added as a separate line item at the bottom of the invoice. Therefore, they are not usually included in the invoiced wood price.

How do we account for this discrepancy when entering MRc7 wood costs into the M&R Calculator?

I just put it in a separate excel file and figure out what the tax rate was, and add a column for the individual line items + tax. So for instance if I have some MDF that is $100 and some Door cores that are $500 and my tax rate is 7% the invoice will total all the items at the bottom of the invoice and add the tax for a total of $642.That's not good for my LEED documentation. I'll figure out what the tax was (7%) and add it for each individual line item. My excel sheet will have MDF $100 x 1.07 = $107, Door Cores $500 x 1.07 = $535. Then I enter those numbers ($107 & $535) into the Materials and Resources Calculator. It's a pain but it's the only way I can make sure I'm accounting for everything properly.

Not sure about shipping, I guess you could divide it evenly among the products? Sometimes I'll have a bulk freight charge on an invoice for several products.

I have only pursued this credit on tax-exempt projects, so I have not had to address taxes. Shipping costs are usually based on weight & distance.

Rather than to try divvying up shipping costs among separate items, I have included all shipping costs in the "Total Wood Cost", but not in the compliant, FSC value. This assumes the "worst case." It would be great if there were an official ruling.

MRc7 reporting requirements have been modeled after FSC rules. I wonder, does the FSC or USGBC have a policy for how to treat tax & shipping costs?

Material costs for MRc3-7 are to include all costs to deliver the product to site, as has been quoted already in the thread.The invoice requirement for itemizing is for the manufacturer to meet FSC invoicing requirements, but the LEED calculation should not have the costs broken down. LEED just needs to see the end product as shipped to site. Enter the cost for the product shipped to site, the percentage of new wood, and the percentage FSC as per the FSC label. The invoice submitted should be the invoice for this product which is shipped to site.

What if an invoice includes multiple items? To illustrate the dilemma, here is an example taken from an invoice that shows $4,192 in FSC end-products (before tax & freight). It also separately itemizes $122 in non-wood products that do not apply toward MRc7:

Casework - FSC Mixed 70% - COC-#......$ 3,739.00
Loose Millwork - FSC Pure - COC-#..........$ 453.00
SS Cabinet Hardware...............................$ 122.00
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Subtotal 1............................................$ 4,314.00
Freight....................................................$ 444.00
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Subtotal 2............................................$ 4,758.00
Tax.........................................................$ 333.06
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Total....................................................$ 5,091.06

Finally, the invoice includes about $777 in freight & taxes applicable to all three items on the invoice.
Does this invoice comply with FSC requirements?
If USGBC requires us to include taxes & shipping in our MRc7 calculation, how do we figure how much of the $777 to apply toward each of the two FSC items?
What values do we enter into the BDC-MR Calculator for “Material Cost,” “Percent New Wood,” & “Percent New Wood that is FSC Certified” for the items on this invoice?

This invoice complies with FSC requirements for invoicing except that the "FSC claims" are out of date ("FSC Pure" is now "FSC 100%" and "FSC Mixed 70%" is now "FSC Mix 70%"). FSC requirements for invoicing are only that FSC-certified products carry the appropriate FSC claim and that the companies CoC # is included somewhere on the invoice.

Given the evident confusion, it seems like maybe we need a definitive ruling from USGBC on how this works.

For whatever it's worth, if it were me, in your example, I'd get a total for the FSC products ($3739 + $453 = $4192) and then calculate this as a percentage of all items on the invoice ($4192 / $4314 = 97% or .97). Then I'd apply the percentage to both the freight and the tax and add that to the FSC total (($444+ $333.06) * .97 = $753.75; $4192 + $753.75 = $4945.75). I would put $4945.75 into the MRc7 calculator as the "Material Cost" and put in 100% for both the "Percent New Wood" and the "Percent New Wood that is FSC Certified."

Thanks Jason.

Admittedly, the example that I gave is an oddity. Most FSC invoices that I have received have been much cleaner, addressing only one FSC Type, with no non-wood items and no interpretation issues. This one threw me.

On the other hand, non-FSC wood invoices frequently include a jumble of unrelated materials.

Now that you mention it, I had noticed the recent change in claim terminology. I had modified the claims in my example to match the language in the LEED Reference Guide.

One more question: If the FSC Claim is “FSC Mix 70%”, does that mean the “Percent New Wood” is 70%, and the “Percent New Wood that is FSC Certified” is 100%? If it is the other way round, it makes a big difference.