True or False: Sales tax is not charged when a contractor pays sales tax on purchases and charges a fixed fee.

Sales tax laws generally require that sales tax is paid on most tangible goods and certain services sold to consumers. When a contractor purchases materials and pays sales tax on those purchases, it does not exempt the contractor from charging sales tax to the customer for the overall service provided, including labor and other costs.

In the scenario where a contractor charges a fixed fee, the total cost billed to the customer often includes both the labor and the materials, and sales tax may apply to this total fee. Therefore, it is not correct to assume that there will be no sales tax charged just because the contractor has already paid sales tax on the materials.

Since the contractor's fixed fee might represent both tangible goods and services, charging sales tax becomes necessary unless there is a specific exemption. Thus, stating that sales tax is not charged in this context is false, confirming that sales tax is indeed applicable in most situations involving a contractor's fixed fee that encompasses these elements.