Hello, I will be assisting you
You are permitted to mark up building materials as long as the customer knows how much they are paying and what they are getting.
As far as sales tax, you should register with the Board of Equalization as you may be deemed to be an end seller. To avoid paying double sales by registering with the board you can acquire good for resale without paying sales tax however you will be required to charge the sales tax when you sell (mark up) the good to your customers. You can find more information here
It is entirely possible that you may need to pay sales tax even on goods that are not marked up that is why it's important to register so that you can buy the goods without paying the sales tax.
Finally, you are under no legal obligation to itemize the materials you provide.
I have been under the impression that in lump sum contract, as long as i am stating what material we are installing, i don't need to disclose the cost of the material.
that is correct
Your reply "You are permitted to mark up building materials as long as the customer knows how much they are paying and what they are getting." seem to suggest that I need to disclose all my material cost before i can mark it up.
this was more of a general statement
as long as they know what they are getting not necessarily what it is made of
"how much they are paying", do you mean the overall contract or the material part
over all contract
i pay sales tax when i buy my material. So i don't need to pay sales tax for my remodeling income, right
the board of equilization can't classify me as end seller because i already pay sales tax once.
that's a more complicated issue. If you use a lump sum contract you may need to charge sales tax for it
the goods at that point are combined with the services you provide
is there any government publication that talks about when i need to charge sales tax and when i don't?
let me look
it seems to me marking up the material and the obligation to charge sales tax are orthogonal. My understanding is,
1) in a lump sum contract, i can mark up material, as long as i disclose what they material they are getting and the overall contract price.
2) as a building contractor, in a lump sump contract, i am exempt from charging sales tax
BOE Publication 9
you do purchase these items with your resale certificate?
i don't have resale certificate
that's exactly why i shouldn't need to worry about charging sales tax
page 4 of Pub 9 "If the contract explicitly provides for the transfer of title to the materials prior to installation, and separately states the sale price of the materials, exclusive of the installation charge, the contractor will be considered the retailer of the materials."
"Contractors are consumers of materials which they furnish and install in the performance of construction contracts, and tax applies to the cost of materials to the construction contractor"
With your permission I am going to opt out and I'll see see if there is CA tax expert available.
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