California Sales Tax for Interior Designers -Subcontracted Work

Your charges to your client for subcontracted improvements to real property (the subcontractor furnishes and installs materials/fixtures) are generally not taxable because the contractor is responsible for reporting the tax.


When the subcontractor is the retailer of materials and fixtures furnished in a construction contract, he or she owes tax on the sale.

If your client pays the subcontractor directly, the subcontractor may charge your client an amount for tax on charges for materials and fixtures.

If you pay the subcontractor yourself, you may be charged an amount for tax.

You cannot give the subcontractor a resale certificate for materials or fixtures furnished in a construction contract.

Example

You have a contract to furnish a master bathroom. As part of the job, you subcontract with a tile installer who furnishes and installs 400 square feet of marble tiles for a total, nontaxable lump sum charge of $8,000. You do not owe tax on the amount you charge your client for this work. The contractor is the consumer of the tile used on the job and, therefore, must pay tax to his supplier or to CDTFA.

You subcontract another portion of the job to a plumber who furnishes and installs a new sink, toilet, and whirlpool tub. The plumber charges you $750 for installation labor, $3,200 for the fixtures, and an amount for sales tax on the fixtures. The plumber owes sales tax on the $3,200 fixture charge and may bill you for tax. You may not issue a resale certificate to the plumber. Again, you do not owe tax on the amount you charge your client for this work.


Source: California Department of Tax & Fee Administration (CDTFA)

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