California IDEX Practice Exam

On a project where an interior designer specifies $300 worth of window blinds, charges $150 for installation, and purchases from a wholesaler in California, on what activity is tax NOT due?

1. Collecting money from the client

2. Measuring for the blinds

3. Writing purchase orders

4. Installation of the blinds

The correct answer is: Installation of the blinds

The correct answer indicates that tax is not due on the installation of the blinds. In California, the installation of tangible personal property, such as window blinds, can often be considered a part of the sale of that property. When an interior designer provides installation services, they typically do not charge sales tax separately on those services, as long as they are considered part of the overall sale of the blinds. When the designer sells the blinds and performs the installation, the entire transaction is generally taxed as the sale of tangible goods, meaning that the installation itself does not incur an additional tax. This is a common practice in many jurisdictions, where the installation is viewed as an integral part of the sale, rather than a separate taxable service. Thus, since installation doesn’t generate additional tax, this clarifies why the other activities would incur tax: collecting money from the client, measuring for the blinds, and writing purchase orders are typically considered part of the business operations and may not fall under the same tax-exempt scenarios as installation.