California Code of Regulations › Title 18 - Public Revenues › Division 2 - California Department of Tax and Fee Administration- Business Taxes (State Board of Equalization- Business Taxes, See Ch. 6 and 9.9) › Chapter 4 - Sales and Use Tax › Article 20 - Transactions (Sales) and Use Taxes › Section 1826 - Construction Contractors

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a)
				  In General. All of the provisions of the state Sales and Use Tax Law and
				  regulations adopted thereunder relating to construction contractors, including
				  subcontractors, (other than those relating to the rate of tax) are applicable
				  to state-administered transactions (sales) and use taxes.
(b) Jobsite Is Place of Business.
(1) The jobsite is regarded as a place of
				  business of a contractor and is the place of sale of "fixtures" furnished and
				  installed by a contractor. The place of use of "materials" is the jobsite.
				  Accordingly, if the jobsite is in a district (or districts) having
				  state-administered transactions (sales) and use taxes, the transactions (sales)
				  tax applies to the sale of the fixtures, and the use tax applies to the use of
				  the materials. If the jobsite is not in a district with a state-administered
				  tax, state-administered transactions (sales) tax will not apply to the sale of
				  the fixtures even though the contractor's principal place of business is in a
				  district with such a tax.
(2) The
				  contractor is entitled to a credit against use tax liability for transactions
				  tax reimbursement paid to the retailer of the materials in a district, under
				  the conditions specified in paragraph (b)(1)(E) of Regulation 1823
				  (18 CCR
				  1823), Application of Transactions (Sales)
				  Tax and Use Tax. If fixtures are purchased by a contractor tax paid in a
				  district having state administered transactions (sales) and use taxes, the
				  contractor, upon installing the fixtures in a county without such a tax, is
				  entitled to a credit for the tax of the district of purchase. If the contractor
				  installs the fixtures in a district (or districts) imposing transactions and
				  use taxes at a rate (or combined rate) greater than the district in which the
				  contractor purchased the fixtures tax paid, the contractor is also entitled to
				  a credit for the tax of the district of purchase, but is liable for the
				  transactions tax (or taxes) of the district (or districts) where the fixtures
				  are installed.
(3) The place of
				  sale or purchase of a factory-built school building (relocatable classroom) as
				  defined in paragraph (c)(4)(B) of Regulation 1521 (18 CCR
				  1521), Construction Contractors, is the place
				  of business of the retailer of the factory-built school building regardless of
				  whether sale of the building includes installation or whether the building is
				  placed upon a permanent foundation.
The district use tax of the district (or districts) where
					 the building is installed or placed will apply, if the rate of tax (or combined
					 rate) is greater than the rate of tax in the district of sale, or if the place
					 of sale is not in a district. See paragraph (b) of Regulation 1823
					 (18 CCR
					 1823).