Free template, California tax rules built in
Free California Invoice Template
Invoicing in California has two wrinkles worth getting right: California taxes goods but generally not services, and many trades need a state license before they can legally bill for a job over $500. This template handles both so your invoices hold up.
Sales tax on invoices in California
Rate: 7.25% statewide base (local district taxes push many areas higher)
California has the highest statewide base sales tax rate in the country at 7.25%, and local district taxes add to it in most cities. Sales tax applies to tangible goods, not to most services. So a plumber who only charges for labor usually charges no sales tax, but if that plumber sells you a water heater, the heater is taxable. When you sell both, itemize the taxable goods separately from the non-taxable labor so the tax line is obviously correct.
What gets taxed: Most services are not taxable. Tangible goods are taxable.
Rates and rules change. Confirm the current rate and what is taxable with your state tax authority before you file.
Contractor licensing in California
California requires a contractor license from the Contractors State License Board (CSLB) for any construction job where labor and materials total $500 or more. Put your CSLB license number on your invoices. Unlicensed contracting over that threshold is not just a billing problem, it can void your right to collect at all.
Sample California invoice
Example for a job in Sacramento, CA, showing how the tax line works when some items are taxable and some are not.
| Description | Qty | Rate | Amount |
|---|---|---|---|
| Labor (not taxable in CA) | 8 | $85.00 | $680.00 |
| Water heater unit (taxable) | 1 | $1,200.00 | $1,200.00 |
| Subtotal | $1,880.00 | ||
| Sales tax (8.75% on taxable items) | $105.00 | ||
| Total | $1,985.00 | ||
Tax is applied only to the taxable lines, which is the part most invoices get wrong. Build yours with the right tax handling in the free generator.
Make this invoice freeBy trade
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California invoice FAQs
Do I charge sales tax on services in California?
Generally no. California taxes tangible goods, not most services. If you only bill labor, you usually charge no sales tax. If you sell parts or materials, those goods are taxable, so itemize them separately. Confirm your specific situation with the CDTFA.
Do I need a license number on a California contractor invoice?
Yes. For construction work totaling $500 or more in labor and materials, California requires a CSLB license, and you should show your license number on the invoice. Unlicensed contracting over that threshold can forfeit your right to be paid.
What sales tax rate do I use in California?
Start from the 7.25% statewide base and add your local district tax, which varies by city and county. Use the rate for the location where the sale takes place, and check the current rate with the CDTFA since district taxes change.