Do contractors have to pay tax?

Contractors must collect the use tax from the customer and pay it to the State of California. When you are the consumer of materials and fabricate materials prior to installation, no tax is due on your labor charges; only the actual material cost is subject to tax.

Do construction contractors pay sales tax in California?

Sales Tax: In general, sales tax in California applies to the sale of tangible personal property unless the law provides a specific exemption or exclusion. When construction contractors sell or purchase tangible personal property, they are subject to sales tax.

Do independent contractors need to file taxes in California?

Consider using accounting software or hiring a bookkeeper to help you keep track of your finances. Independent contractors in California are required to file their tax returns by April 15th of each year. You will need to file a federal tax return using Form 1040, as well as a California tax return using Form 540.