When does Per Diem become taxable to a contractor? I have told it is after one year but I cannot find anywhere on the IRS web-site or in any publications.

The normal period after which per diem becomes taxable compensation IS one year.

See Pub.463 at IRS.gov
After one yr. you are considered at your normal place of work and not away from home.

From the IRS's "Taxable Fringe Benefits Guide"

Temporary vs. Indefinite Travel Assignments
Reimbursements of travel expenses for "temporary" assignments away from the tax home are generally not taxable to the employee. If the assignment is "indefinite," the employee is considered to have moved his/her tax home to the new work location. Reimbursements of expenses for "indefinite" travel are taxable. The employer must determine whether an assignment is realistically expected to last less than one year when the assignment begins. . Rev. Rul. 93-86; Rev. Rul. 99-7
An assignment is generally considered temporary if it is realistically expected to be, and does in fact last, one year or less.
An assignment is generally considered indefinite if it is realistically expected to last, and does in fact last, for more than one year.The above are the general rules. All relevant facts must be considered to determine whether the travel assignment was intended to be temporary or indefinite. Rev. Rul. 93-86; Rev. Rul. 93-7