What must the Contractor do regarding sales and use taxes paid by the City?

The requirement for the Contractor to remit to the State of California any sales or use taxes paid by the City is based on the legal obligations surrounding taxation. When the City pays sales or use taxes, it is expected that these taxes be forwarded to the appropriate state tax authority, ensuring compliance with state tax laws. This process helps maintain transparency and accountability in handling public funds and ensures that the obligations to the state are fulfilled properly.

The other options either suggest actions that do not conform with tax laws or give the impression of misappropriating funds meant for tax payments. For example, paying the City directly for taxes goes against the structure of how sales and use taxes are collected and remitted, as these taxes are typically sent to the state instead. Keeping the sales tax upon receipt or ignoring these taxes altogether can lead to legal issues, as it would not follow the established requirements for tax handling.