California Contractor Sales Tax 2026

California sales tax rate for contractors

• Combined rate: 7.25% + local (~8.7% combined avg)
• Construction labor taxable: NO - real property labor is exempt
• Tax authority: California Department of Tax and Fee Administration (CDTFA)

How California treats contractor labor

Construction labor is NOT subject to sales tax. Repair labor on TPP may be taxable depending on transaction structure.

California-specific rules

California CSLB requires 4 years of experience plus exam. Lump-sum: contractor is consumer of materials. Time-and-materials: customer can be billed for tax-paid materials.

California mechanics lien rights

Beyond sales tax, California contractor billing must respect the mechanics lien deadline of 90 days from completion (60 days if notice of completion recorded). Preliminary notice: 20-day preliminary notice REQUIRED for all parties except direct contractors.

California contractor licensing

Contractors State License Board (CSLB) - required for licensed work. $450 application + $25K bond. Board: https://www.cslb.ca.gov.

Automate California sales tax with KaamCam

KaamCam applies the California sales tax rate, labor tax treatment, and contractor license number to every invoice automatically. Stop tracking tax rules manually. $12 per seat per month. Start a free 7-day trial.

California contractor resources by trade

• California HVAC Cost
• California Plumbing Cost
• California Electrical Cost
• California Roofing Cost
• California Painting Cost
• California Concrete Cost