Many states tax labor as well as materials. I'm on the border of 3 states and each handles that differently. MS taxes both labor and materials. TN taxes neither when installed into the home as a permanent improvement. AR taxes materials and not labor.

You might get more responses by being specific in your title that it is CA tax policy that you need information about.

Also since you have not paid for the project yet, you may want to do more research about how CA environmental laws affect the durability of the cabinet finishes available in your state. Many sad stories are out there where they are now choosing factory finished products just a short time later because of the lack of durability of the finish.

Can't speak to California..... but here in the NY land of tax the air you breathe? You order wall to wall carpet, it needs to be installed. The installation is service or the carpet doesn't do you much good, correct?. The entire thing is taxed. ALL of it. Goods, service all of it. About the only things left in NY that are services not taxed are your dentist and the hairdresser.

Jan, you are so correct! Taxes and permits in New York are killer. As my attorney here once said, you need a permit to sneeze on a pansy!

That being said, sales taxes are imposed by state and local jurisdictions in the US, so you need to seek the advice of an accountant in California on this question.