Floor covering tax classification

Definition

Whether the shop consumes materials as a contractor or sells goods as a retailer.

Why It Matters

It turns on whether the covering is permanently affixed. California's regulation puts installers of permanently affixed covering among construction contractors and lists wall-to-wall carpeting, when affixed, among materials that lose their identity in the realty. Tax is measured differently on the two sides of that line, so a shop reporting on the wrong side has an assessment exposure a buyer can inherit. Ask which line the last three years of returns used, job type by job type.