Construction and
   Building Contractors
      Preface
      This publication is designed for building construction contractors, subcontractors, and restaurant equipment 
      contractors. It provides basic information on the California Sales and Use Tax Law and applicable regulations. 
      If you cannot find the information you are looking for in this publication, please visit our website at www.cdtfa.ca.gov 
      or call our Customer Service Center at 1-800-400-7115 (CRS:711). Customer service representatives are available 
      Monday through Friday from 7:30 a.m. to 5:00 p.m. (Pacific time), except state holidays.
      This publication complements publication 73, Your California Seller’s Permit, which includes general information about 
      obtaining a permit; using a resale certificate; collecting and reporting sales and use taxes; buying; selling; and keeping 
      records. Also, please refer to our website or the For More Information section of this publication for the complete 
      list of California Department of Tax and Fee Administration (CDTFA) regulations and publications referenced in this 
      publication.
      We welcome your suggestions for improving this or any other publication. If you would like to comment, please 
      provide your comments or suggestions directly to:
      Audit and Information Section, MIC:44
      California Department of Tax and Fee Administration
      PO Box 942879
      Sacramento CA 94279-0044
      Please note: This publication summarizes the law and applicable regulations in effect when the publication was 
      written, as noted on the back cover. However, changes in the law or in regulations may have occurred since that time. 
      If there is a conflict between the text in this publication and the law, the decision will be based on the law and not on 
      this publication.
          Contents
          Section                                                         Page
            Definition of Terms                                            1
            General Application of Tax to Construction Contractors         4 
             (Other than United States Contractors)
            Application of Tax to United States Construction Contractors   7
            Subcontractors                                                 8
            Liability by Type of Contract                                  9
            Application of Tax to Different Types of Construction Contracts 10
               Repair Contracts
               Sales of Prefabricated Buildings
               Factory-Built School Buildings
               Restaurant Equipment Contractors
               Cabinet Contractors
               Countertops
               On-premise Electric Signs
               Signs (other than on-premise electric signs)
               Solar Cells, Solar Panels, and Solar Modules
               Modular Furniture
               Landscape Contractors 
            Construction of Certain Military and Medical Facilities        18
            Procedures for Determining Tax Liability                       19
               Method of Purchasing 
               Purchasing on an Ex-tax (without tax) Basis 
               Purchasing on a Tax-paid Basis 
               Recordkeeping
            Construction Contractors’ Use of Resale Certificates           21
               Leased Fixtures
            Materials and Fixtures Used Outside of California              22
            Sales in Interstate and Foreign Commerce                       22
            Transportation Charges                                         23
     Contents
       District Taxes                   24
        Property Purchased Prior to the Operative Date of a District Tax
        Jobsite as Place of Business Installation or Delivery Location 
        Purchasing Materials and Fixtures in One Location and Using 
          Them in Another Location
          Determining the Applicable District Use Tax Rate 
          Fixed Price Contracts
          Finding the Appropriate Tax Rate
       Local Tax Allocation             28
       Required Registration to Report Use Tax – How to Register  
       and File a Return                29
       Other Tax Issues                 30
        Consumer Use Tax Account
        Farm Equipment and Machinery
        Construction Contractors and American Indian Reservations
        Bad Debts
        Supplies and Tools for Self-Use
        Sales of Short Ends or Pieces
        Miscellaneous
        Lumber and Engineered Wood Products
       For More Information             34