Contractors involved in construction work on real property must follow specific tax rules, which vary based on the situation. In some cases, they are treated as consumers and must pay sales tax on their own purchases. In other cases, they act as retailers and need to collect sales tax from their customers. This guide explains what qualifies someone as a contractor, how taxes apply to their purchases and sales, the impact of contract terms on taxes, sales tax licensing requirements for contractors, and how city, county, and special district sales and use taxes affect them.

If you have questions about your specific situation, please contact one of our account managers at Salt & Main. We’ll be more than happy to assist you!