Auto repair labor is not subject to sales tax, but the parts are. Similarly, in home construction, materials consumed arent taxed, although fixtures are, and there are definitions of the what is a fixture and what is material and then labor to install a fixture or material is not taxed.
In repowering, if the shop buys the motor and sells it to you, and does so under a resale cert, then the costs of the motor t's probably taxable. If you buy it and send it to them to install, there shouldn't be any additional sales tax. Cant see how the install labor would be taxable
If you buy it out of state and ship it, and the seller doesn't collect CA sales then the CA FTB may chase you down for use tax.
BTW. It appears from this that refurbishing an old hull could be cheaper than buying new. As long as you pay sales tax on the parts and supplies along the way, the labor should be tax free, whereas on a new boat you pay sales tax knbthe wholenpurchase price. Something to consider when running the numbers.
The income tax due isn't your problem unless you are agreeing to helping him avoid paying his taxes
Thanks for chiming in everyone. So I got some emails as I put my address in the first post.
Some guys knew exactly the shop I'm talking about.
So the 1st rule about the shop is don't talk about the shop publicly.
The 2nd rule is don't talk about the shop publicly.
Anyway the guys who have gone through it say the shop will make any false documents you want for survey, insurance, and warranty etc.
The only complaints I know of the shop absolutely rapes you on renovation labor and materials and hits you with a $10k seatrial fee at the end. Cash and no contract they have you by the balls. Great work though.