A person is considered a contractor without regard to whether or not they are acting in fulfillment of a contract. Owner-builders who do not sell the improved property within 24 months are subject to the tax on all materials and construction contracts for the project. This tax is due during the 25th month after the construction is completed. Speculative Builders , including home developers, are liable for tax on the full sales price at the close of escrow or transfer of title, whichever is earlier. Sales of improved land and reconstructed property are also subject to the tax under the speculative builder activity.
Gross income derived from acting as a subcontractor is exempt from the tax.
Installation of floor covering, paint, wallpaper and cabinets is construction contracting. The sale of consumable goods incorporated into or applied to real property is considered a retail sale. Examples of consumable goods are lubricants, washers and refrigerant. Installation of solar energy devices Repair of air conditioners, plumbing, etc. All construction contractors must report their income from each job to the city in which the job-site is located , not the city in which the contractor is based.