Sales Tax Laws by State for Contractor Installation Labor

This page covers sales tax laws for all 48 states in the contiguous United States as it relates to contractor labor. Example: A flooring contractor installs vinyl flooring into an End Customer's residence.

It is important to note that sales and use tax regulations vary by state. For any questions regarding sales tax or other matters, please contact us at [email protected] or via our Contact Us Page.

 

Definitions

These definitions apply specifically to RYC Flooring's Sales and Use tax resource pages. 

• Installers: Customers of RYC Flooring who purchase goods with intent to use the goods to improve, alter, or repair buildings, homes or other real property, for another person or entity other than themselves. Example: general contractors, subcontractors, or specialized contractors. 
• End Customers: Customers of RYC Flooring who purchase goods with intent to place the goods in their own residence.

 

No Statewide Sales Tax

There is no statewide Sales tax in the following states, thus sales tax on installation labor is not charged:

• New Hampshire
• Oregon
• Montana
• Delaware

 

States That Require Sales Tax Charged for Installation Labor

Illinois: With regard to installation charges, labor charges that are contracted for separately from the selling price of the tangible personal property are not taxable. Labor charges that are a part of the selling price are taxable.

New Jersey: Charges for the installation of floor covering are taxable. 

New York: All charges for materials and labor that you bill to your customer for any repair, maintenance, or installation project, including any expenses or other markups, are taxable.

Washington: Sales tax is collected and due on the total contract price.

Washington DC: Sales tax at the rate of 5.75 percent is imposed on charges for the service of real property maintenance. 

States That Exempt Installation Labor From Sales Tax Collection

Alabama: Where the seller has a standard retail sales price for his products and where the standard sales price is used both when making across-the-counter sales and when selling and installing the property, he may make a separate and additional charge for making the installation which, when shown separately in his billings and on his books, will not be subject to the sales tax.

Arizona: No, labor is not taxable and a contractor's invoice for MRRA projects should not include a line item for tax as neither the labor or the materials are taxable.

California: Charges for labor or services used in installing or applying the property sold are excluded from the measure of the tax. 

Colorado: A retailer-contractor should not collect tax on installation or labor charges if such charges are listed separately on the bid proposal, sales invoice, or contract.

Connecticut: The Department considers the on-site labor described herein to be installation labor to tangible personal property and, therefore, not subject to sales tax so long as it is separately stated on Company's bill to its customer.

Florida: Labor performed at the job site to improve real property is not subject to sales tax.

Georgia: Itemized charges made for repair labor or installation labor are not subject to sales tax.

Ohio: Contractors and home remodelers do not collect sales tax on their work.

Oklahoma: Where the seller has a standard retail sales price for his products and where the standard sales price is used both when making across-the-counter sales and when selling and installing the property, he may make a separate and additional charge for making the installation which, when shown separately in his billings and on his books, will not be subject to the sales tax.

Pennsylvania: Following are examples of services upon which the person rendering the service does not collect tax but is liable for payment of tax on the purchase of taxable personal property and services used in the person’s business: (5) Construction or repair services to realty.