Business FinancesQuestion 1156 of 1605
In California, sales or use tax on materials a contractor consumes to fulfill a construction contract is generally:
a.Owed by the contractor, who is usually the consumer of the materials
b.Always collected from the homeowner as a separate line item
c.Never owed by anyone on construction jobs
d.Paid by the CSLB
Explanation
For most construction contracts, the contractor is treated as the CONSUMER of materials furnished and installed, so the contractor owes sales/use tax on the cost of those materials (either paid to the supplier or self-reported as use tax). The tax is a job cost the contractor must build into the price.
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Sen Lin, PrepPass Founder · Verified against California CSLB Contractor License Law & Business Exam · How we review
Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)