Bid Builder Guide

How to think about tax lines on contractor estimates

Contractors often confuse two different tax ideas: a client-facing sales tax or similar project tax, and the internal tax set-aside an owner uses to plan for income taxes.

Client-facing tax

Some locations and trades require certain parts of a project to be taxed. In other situations, labor may be treated differently than materials. Because rules vary, Bid Builder Pro lets you choose whether to include tax and what base to apply it to.

Owner tax set-aside

The owner tax set-aside is internal planning. It helps you estimate how much of your owner income should be reserved for taxes. It is not the same as sales tax charged to the client.

Keep tax language clear

If you include tax on a bid, label it clearly. If you are unsure, confirm with a qualified tax professional before sending the contract.

Tax rules vary by location. Do not rely on a generic calculator as tax advice.