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Cabinets

• You may contract with a client to install cabinets in a home, store, office, or other building.

• For sales and use tax purposes, some cabinets are considered materials and others are considered fixtures.

• Each cabinet in a project must be evaluated individually.

Custom Cabinets

• Cabinets are considered custom and treated as materials if you incur less than 90 percent of the direct cost of related labor and materials in fabrication and installation of the cabinet before the cabinets are attached to your client’s building.

• The application of tax to your charges for materials depends on how you contract with your client, as explained earlier.

Prefabricated Cabinets

• Cabinets are considered prefabricated and treated as fixtures if you incur at least 90 percent of the direct cost of labor and materials in fabrication and installation of the cabinets before they are attached to your client’s building.

• In this case, you are considered to be the retailer of the cabinets and tax will apply to your charges for them.

• Installation charges are not taxable.

Source: California Department of Tax & Fee Administration (CDTFA)