Sales tax on labor for plumbers and HVAC contractors by state
In most states you do not charge sales tax on your labor. You pay the tax when you buy the parts and build it into your price, and the customer sees no tax line at all. Four of the twelve states here work differently. Washington taxes the whole bill on every job, North Carolina taxes repairs but not new construction, Texas taxes repairs for businesses but not homes, and Arizona taxes new construction in its own way.
Sales tax on labor by state, at a glance
The state name opens the full page for that state. Each row ends with where the numbers came from. A row marked "Not checked yet" is written but a person has not confirmed it.
| State | Sales tax on your labor | Who pays the tax on materials | Tax rate | ||
|---|---|---|---|---|---|
| Repair at a home | Repair at a business | New construction | |||
| Arizona | No | No | Yes, on 65 percent of the job price | You do on repair jobs. On new construction you buy them tax-free with an exemption certificate | 5.6 percent state, plus county and city rates. The state example uses 7.8 percent for Gilbert in Maricopa County |
| Checked 2026-09-16. From azleg.gov , cottonwoodaz.gov , azdor.gov · Full pages: Arizona Electrical , Arizona HVAC , Arizona Plumbing | |||||
| California | No | No | No | You do on pipe, duct, and parts. On fixtures such as sinks, water heaters, furnaces, and AC units you charge the customer | 7.25 percent statewide, plus district taxes of 0.10 to 2.00 percent in many cities and counties |
| Checked 2026-09-16. From cdtfa.ca.gov , cdtfa.ca.gov , cdtfa.ca.gov , cdtfa.ca.gov · Full pages: California Electrical , California HVAC , California Plumbing | |||||
| Florida | No | No | No | You do, when you buy them. Movable items such as window units are sold and taxed to the customer | 6 percent state plus county discretionary surtax |
| Checked 2026-09-16. From floridarevenue.com · Full pages: Florida Electrical , Florida HVAC , Florida Plumbing | |||||
| Georgia | Not checked yet | ||||
| Michigan | No | No | No | You do, when you buy them | 6 percent state rate |
| Checked 2026-09-16. From michigan.gov , michigan.gov · Full pages: Michigan Electrical , Michigan HVAC , Michigan Plumbing | |||||
| North Carolina | Yes, on the whole bill | Yes, on the whole bill | No | You do on new construction. On a taxable repair the parts are taxed on the customer's bill | 4.75 percent state plus local rates, for a total of 6.75 to 8.25 percent depending on the county |
| Checked 2026-09-16. From ncdor.gov , ncdor.gov , ncdor.gov , codes.findlaw.com , ncdor.gov · Full pages: North Carolina Electrical , North Carolina HVAC , North Carolina Plumbing | |||||
| Ohio | Not checked yet | ||||
| South Carolina | Not checked yet | ||||
| Tennessee | Not checked yet | ||||
| Texas | No | Yes, on the whole bill | No | You do, when you buy them. Or list them separately, buy them tax-free, and charge the customer tax on them | Not on our page yet |
| Checked 2026-09-16. From comptroller.texas.gov · Full pages: Texas Electrical , Texas HVAC , Texas Plumbing | |||||
| Virginia | Not checked yet | ||||
| Washington | Yes, on the whole bill | Yes, on the whole bill | Yes, on the whole bill | The customer does, as part of the taxed bill. You buy them tax-free with a reseller permit | 6.5 percent state rate plus the local rate for the job site |
| Checked 2026-09-16. From dor.wa.gov , dor.wa.gov , dor.wa.gov · Full pages: Washington Electrical , Washington HVAC , Washington Plumbing | |||||
What this means for you
Your first invoice
In nine of these twelve states, the labor line on your invoice carries no tax. You already paid tax at the supply house when you bought the parts. Put that cost into your price and leave the tax line off. If you add a sales tax line the state does not ask for, you still have to send that money to the state, and the customer has paid more than they should.
Getting it wrong costs you, not the customer
In Washington and North Carolina the tax belongs on the bill. If you forget it, the state still expects the money, and it comes out of your pocket. A $1,200 repair in Charlotte with the tax left off costs you about $85. Do it on twenty jobs and you have lost a week's pay.
The same job can be taxed differently
In Texas, fixing a water heater in a house has no tax on your labor. Fixing the same water heater in a shop is taxed on the whole bill. In North Carolina and Arizona it is the type of job that matters. A repair and a new install of the same equipment get different tax treatment, and in North Carolina a building permit is often the dividing line.
How you write the invoice matters in two states
Georgia only leaves your labor untaxed if it sits on its own line. Lump labor and parts together and the whole amount can be taxed. Michigan is the other way round. If you itemize materials and charge tax on them, the state may start treating you as a retailer. Copy the habit of your own state, not an invoice template from the internet.
Some states want you registered even with nothing to collect
Georgia asks every contractor to register for a sales tax number and file a return every month, even a month with no sales. Washington needs a reseller permit for materials and a separate business tax on your receipts. In Arizona you only register if you do new construction. In most of the other states you register only if you also sell parts over the counter.
State by state: what is different about sales tax on labor
What is unusual in each state. Nothing here repeats the table.
Arizona
Arizona calls its sales tax the transaction privilege tax, and it is a tax on you, the seller. Repairs and replacements in an existing building carry no tax on the invoice. New construction and large alterations are taxed on 65 percent of the contract price, with the other 35 percent treated as labor. A home alteration counts as a repair up to a quarter of the home's assessed value. Above that it is taxed as new construction.
California
California draws a line between materials and fixtures. Pipe, duct, and wire lose their identity once installed, so you pay tax on them and charge nothing. A sink, a water heater, a furnace, or an AC unit is a fixture. It stays recognizable after installation, so you are its retailer and you charge the customer tax on it. An HVAC shop that sells and installs units needs a seller's permit for that reason.
Florida
Florida does not tax the work when what you install becomes part of the building. Sinks, furnaces, and central air units all count. You pay tax on them when you buy them, and the customer sees no tax whether you quote one price or bill by the hour. A window unit or a portable is different. It stays a movable item, so you buy it tax-free and charge the customer tax on the sale.
Michigan
Michigan is the simplest state here. No tax on your labor for a home, a business, or new construction. You pay 6 percent when you buy the materials and charge the customer nothing. The one trap is itemizing materials and charging tax on them, which can make the state treat you as a retailer. Do not do it unless you mean to be one.
North Carolina
North Carolina taxes repairs, maintenance, and installation on the whole bill, including your labor, for homes and businesses alike. Replacing a toilet or repairing a water heater is taxed. New construction, additions, and a full system replacement are not. For those you pay tax on materials and keep a Form E-589CI on file. If a mixed job is more than a quarter repair work, the repair part is taxed.
Texas
Texas splits by customer. Repairs and remodels at a home have no tax on your labor. The same work for a business is taxed on the whole bill, labor and materials. New construction is not taxed. If you want to charge the customer tax on materials, you must list them separately and buy them with a resale certificate.
Washington
Washington is the state that taxes everything. On a job for a homeowner or a business you charge retail sales tax on the whole contract price, labor and materials, as a separate line on the invoice. You buy the materials tax-free with a reseller permit. On top of that, your receipts are taxed under the business and occupation tax, which you pay yourself and do not pass on.
Waiting on a check: Georgia, Ohio, South Carolina, Tennessee, Virginia. Those paragraphs appear once a person has confirmed them.
Words in this guide
- Use tax
- The tax you owe yourself on materials you bought without paying sales tax, or bought where the rate was lower than at the job site
- Resale certificate, or reseller permit
- A form that lets you buy goods without paying sales tax because you will charge the customer tax when you sell them
- Part of the building
- The test most states use. Something that becomes part of the house or shop, such as pipe or a furnace, is taxed one way. Something that stays movable, such as a window unit, is taxed another
- Lump-sum contract
- One price for the whole job, with labor and materials not listed separately
- Prime contracting
- Arizona's name for new construction and large alterations, which are taxed on 65 percent of the contract price
How we checked these numbers
Every row was written from the plumbing and HVAC pages for that state, where each rule links to the state tax office page or the law it came from. A person then compared each cell and each paragraph with that official page. So far 7 of the 12 rows have been through that check. How to read a page on this site.