Labor Charges (Publication 108)

Labor Charges

Many sellers believe there is a general exemption from sales tax for labor charges. However, in California many types of labor charges are subject to tax. Tax applies to charges for producing, fabricating, or processing tangible personal property for your customers. Generally, if you perform taxable labor in California, you must obtain a seller's permit and report and pay tax on your taxable sales.

You can register by selecting Register, and then select Register a New Business Activity or Location. You can also register in person at any of our offices. Please contact our Customer Service Center for assistance at 1‑800‑400‑7115  (TTY:711).

Special rules apply to labor when you perform work on houses, buildings, and other real property. For additional information, please see publication 9, Construction and Building Contractors, or Regulation 1521, Construction Contractors, also available by calling our Customer Service Center at 1‑800‑400‑7115  (TTY:711).

Note: This publication summarizes the law and applicable regulations in effect when the publication was written as noted above. However, changes in the law or in regulations may have occurred since that time. If there is a conflict between the text in this publicationand the law, decisions will be based on the law and not on this publication.