California Sales Tax on Labor Charges

Jun 20, 2012 | Steven Dunston

The California Board of Equalization revised a publication explaining sales tax on labor.

Although many believe labor charges are exempt from sales tax, California sales tax applies to many types of labor, including ". . . producing, fabricating, or processing tangible personal property . . . ."

A taxpayer who performs taxable labor in California must " . . . obtain a seller's permit and report and pay tax on [their] taxable services." One can apply for a seller's permit online using eRegistration, or eReg.

For special tax rules that apply to labor on buildings and real property see publication 9, Tax Tips for Construction and Building Contractors.

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.

Avalara Author

Steven Dunston

Avalara Author Steven Dunston

Steven Dunston is a marketing technologist with experience as a web developer, SEO specialist and creative director. Steven is manager of the Marketing Technology Group at Avalara.