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Business Taxes Law Guide—Revision 2024
Sales and Use Tax Annotations
A B C D E F G H I J L M N O P R S T U V W X
C
190.0000 Construction Contractors—Regulation 1521
Annotation 190.2837
(e) Fixed-Price Contracts
190.2837 Fixed Price. A construction contract is fixed in price under section 6376(a) Revenue and Taxation Code if the contract requires the contractor to furnish and install specified materials at fixed unit prices for each item of materials. The fixed unit prices must either be tax-included prices or they must separately state the tax rate which was in effect prior to an increase. However, if the contract merely estimated the prices of materials to be furnished by the contractor, pursuant to the contract, that contract would not be a fixed price construction contract which qualifies for the exemption under section 6376.
The contract will also not qualify for the exemption from a tax increase as a fixed price contract if either the contractor or the property owner may unconditionally terminate the contract. (Section 6376(c) Revenue and Taxation Code.) 3/9/90.
(Note.—Section 6376 was repealed effective January 1, 1992.)