Your shop-built cabinet is taxed on more than it cost you: the C-6 problem nobody prices

Every other trade in California buys material, installs it and pays tax on what it cost. The C-6 does not get to live in that world. A cabinet and millwork contractor is a manufacturer, a retailer and an installer inside a single contract, and CDTFA Regulation 1521 taxes each of those roles differently. Get the characterization wrong at bid time and the money does not come back, because you already signed a price.

That is the fact separating this classification from the rest of the finish trades, so this guide starts there, then covers what the C-6 signs for, where it stops, and the order to build the license in.

Materials and fixtures are taxed on different numbers

Regulation 1521 splits everything a construction contractor installs into two buckets, and which bucket an item lands in decides who the taxpayer is.

Materials. Items that become part of the structure and lose their separate identity. On materials the contractor is the consumer, and tax is measured on what the material cost you. Lumber, plywood, trim stock, adhesive, fasteners and cabinetry built in place from raw stock sit here.

Fixtures. Items that keep their identity after installation. On fixtures the contractor is the retailer, and tax is measured on the selling price, or on cost price under a lump sum contract. Prefabricated casework, manufactured cabinet units and similar shop-produced assemblies sit here.

That line runs straight through the middle of this trade. A wall of cabinetry built in place from sheet goods and a wall of shop-built boxes screwed to the same studs look identical when the paint is on, and they are taxed on different bases. Machinery and equipment is a third bucket, sold rather than consumed, and loose furniture that never becomes part of the building is a straight retail sale rather than a construction contract item.

Where the money actually moves: the self-manufactured fixture

Here is the part that lands harder on the C-6 than on any other classification. A self-manufactured fixture carries a deemed manufacturing profit inside its taxable cost price.

Read that slowly, because it runs counter to how every contractor thinks about cost. Buy a cabinet from a manufacturer and install it under a lump sum contract, and the taxable measure is what the cabinet cost you. Build the same cabinet in your own shop and install it under the same contract, and the measure is not your material plus your shop labor. It carries a manufacturing profit element on top, because what is measured is what the fixture would be worth ready for installation.

So vertical integration, the thing that makes a millwork shop worth owning, carries a tax consequence a pure installer never sees.

Two more rules attach to that table and both cost people money.

An itemized invoice does not convert a lump sum contract into an itemized one. Breaking the cabinets out as a separate line on the bill does not change how the contract was written. If you want the contract treated as an itemized one, that has to be decided before signature, not at billing.

The rate applied is a jobsite address question, because district taxes ride on the statewide rate. A shop in one county delivering to a job in another is not taxed at the shop's rate, and that belongs in the estimate rather than in a surprise at reconciliation. United States government construction contracts are treated differently again.

None of this is hidden. It is published, it is stable, and almost nobody in the trade prices it deliberately, which means the shop that does prices more accurately than its competitors on exactly the jobs with the most fabrication in them. California sales tax for contractors works the regulation through, and the CDTFA seller's permit guide covers the registration you need before you can sell a fixture at all. Run your next cabinet package both ways in the markup and margin calculator before you quote it.

What the C-6 signs for, and where it stops

Cabinets and casework built in place or shop built, closets and storage systems, architectural millwork and paneling, doors and hardware, jambs and casing, base and crown, stair parts and handrails, mantels, countertop installation as part of the casework, and the finish carpentry everybody sees when the job is done.

Work outside the classification you hold is not permitted (BPC), and the classification descriptions in the 16 CCR 832 family define the edges. The edge a C-6 meets in real life is not another trade's carpentry. It is being the prime on a kitchen.

A general building contractor takes a prime contract only where the project involves at least two unrelated building trades or crafts (BPC s.7057(a)). A kitchen with cabinets, electrical, plumbing and tile in it is that, comfortably. So the cabinet shop that wants to sell whole kitchens direct to homeowners needs a B general building license or a B-2 residential remodeling license, not a bigger C-6. The shop that supplies and installs casework under somebody else's contract needs exactly the C-6 and nothing more.

Direct to a homeowner: the $1,000 problem on a $60,000 kitchen

If you sell to homeowners, the BPC s.7159 home improvement contract rules apply, and one of them collides with this trade's economics harder than with any other.

The down payment is capped at the lesser of $1,000 or 10 percent of the contract price. On a $60,000 kitchen, 10 percent is $6,000 and the cap is $1,000. Your boxes have a lead time. Your sheet goods, hardware and finish all get bought before anything arrives on site. So the trade with the longest material commitment in the finish package gets the smallest permitted deposit in the state.

The way out is written into the same rule. Payments cannot run ahead of the value delivered, which means value delivered is what earns a payment, and material delivered to the site is delivered value. Build the payment schedule around delivery and installation milestones rather than dates: signing at $1,000, casework delivered to site, boxes set and scribed, tops templated and set, doors and drawer fronts hung, punch complete. That schedule is compliant and cash positive, and it is a very different document from the 50 percent deposit most shops out of state work on.

The rest of the family applies too: written contract above $500, prescribed headings and type sizes, a three business day right to cancel with longer periods for some buyers and after a declared disaster, and change orders written and signed before the extra work starts. The home improvement contract guide has the mechanics, and what to charge as a California contractor covers what goes in the price to begin with.

Classifications people hold alongside the C-6

• C-5 framing and rough carpentry. The other end of the same craft, and the pairing that lets one carpenter carry a job from plates to punch.
• C-15 flooring and C-54 tile. The two trades that finish the rooms you are already working in.
• B or B-2, for the shop that decides selling whole rooms is the business.

Experience, exams and the money to open the doors

Four years of journey-level experience inside the last ten (16 CCR 825). Journey-level counts a journeyman, foreman, supervising employee or contractor, so shop years count: running a millwork shop floor, leading an install crew and supervising fabrication are all journey-level time, not just field carpentry. Education credit can offset up to three of the four. The person best placed to certify it is usually the licensed contractor or shop owner you worked for, and the experience requirement guide covers what a certification needs on it.

Two exams at a PSI test center, multiple choice and closed book: Law and Business at about 115 questions and the C-6 trade exam at about 100. They are calibrated per version rather than scored against a fixed published percentage. A cabinetmaker of fifteen years still revises the business paper, and on this classification the sales tax material on it is not academic. The exams guide covers both.

The money: $450 to apply, then $200 to issue for a sole owner or $350 for anything else, the $25,000 contractor license bond (BPC s.7071.6), and an additional $100,000 bond if you form an LLC with employees or workers (BPC s.7071.6.5). Workers compensation goes in before the first shop hire, and a lapse suspends the license by operation of law on the day cover ends, with no warning and no grace. Get your CSLB license is the sequence in order and workers comp covers the lapse.

Where the work is, and what to do first

Two feeds matter here and they behave differently. Residential alteration permits published by Los Angeles, San Francisco, San Diego and Sacramento name the kitchen and bath remodels that need casework, and the GC on the permit is the person to call. Commercial tenant improvement permits are where the architectural millwork lives, and those jobs are specified months ahead, so the contact worth making is the GC's project manager. Where work is starting in California covers both.

On AEC Stack there is no monthly subscription. The platform fee is 2.5 percent of each invoice processed through the platform, so your contracts, payment schedules and job records cost nothing to keep until the work is billing.

Before you file anything, take your last three cabinet packages and characterize every item: material, fixture bought in, or fixture you manufactured. That afternoon tells you whether your shop has been quietly absorbing a tax it never priced. Then open a working demo business and build the delivery-milestone payment schedule while it is still theoretical.