Guide for HVAC, plumbing and electrical contractors

Sales tax for contractors, state by state

Of the 50 states and DC, 32 do not tax a contractor’s labor on HVAC, plumbing and electrical work in a building, 6 tax it (Delaware, Hawaii, Mississippi, New Mexico, South Dakota and Washington), and 13 tax it only on some jobs. Here is what each state says about labor and materials, in plain words, with a link to the state’s own guidance.

By Nischal, CA, the senior accountant at Books and Trucks, which does monthly bookkeeping for US trade companies on QuickBooks Online from $599 a month. Checked against each state’s source on October 10, 2026. Not tax advice.

6tax the labor
13depends on the job
32do not tax the labor

Out of 51 (50 states and DC), for labor on HVAC, plumbing and electrical systems in a building.

How it works

States handle contractors in one of three ways

1The contractor is the customerIn most states a contractor who installs materials into a building is treated as the end user of those materials. You pay sales or use tax when you buy them and do not charge sales tax to the homeowner.
2The contractor is the sellerIn some states, or for some contracts, you buy materials tax-free for resale and charge sales tax to the customer on the materials, and sometimes on the labor too.
3Labor itself is taxedA smaller group of states taxes repair labor, installation labor or all construction services, either as sales tax or as a gross receipts tax on the business.

Many states mix these. A common split is repair work, which is often taxed, versus a new system or capital improvement, which often is not. Repairing equipment that is not attached to the building, such as a window unit or an appliance, is usually treated like any other repair of goods.

Every state and DC

Labor and materials, by state

Find your state

Showing 51 of 51.

Sales tax on contractor labor and materials, by state
State	Labor on HVAC, plumbing and electrical work	Materials	State source
AlabamaNot taxed	Labor on HVAC, plumbing and electrical workNot taxed. A contractor working on a building is treated as providing a service. Separately billed repair labor on equipment is not taxed either; the parts are.	MaterialsYou pay sales or use tax when you buy materials, including HVAC systems and plumbing and electrical fixtures. You do not charge sales tax to the customer.Also know: Materials for contracts with government entities can be exempt if Rule 810-6-3-.77 is followed.	State source Rule 810-6-1-.27, Building Materials Rule 810-6-1-.84, Labor or Service Charges
AlaskaDepends	Labor on HVAC, plumbing and electrical workNo state sales tax. Each city or borough sets its own sales tax and decides whether contractor labor is taxed.	MaterialsSet by the local sales and use tax rules where you buy and where the job is.Also know: A city and the borough around it can both charge tax. Check with the municipality for each job site.	State source Alaska Office of the State Assessor, sales tax information
ArizonaDependsFull Arizona guide	Labor on HVAC, plumbing and electrical workRepair, replacement or alteration of an existing building (MRRA) is not taxed. New construction and other modification work is taxed on 65% of the contractor's gross income (transaction privilege tax).Read the full Arizona guide	MaterialsOn MRRA jobs you pay tax when you buy materials and do not add tax to the invoice. On modification jobs, materials built into the project can be bought exempt and the prime contractor pays tax on 65% of the job.Also know: A contractor doing only MRRA work does not need a TPT license. Prime contractors on modification jobs do.	State source A.R.S. 42-5075, Prime contracting classification ADOR contracting guidelines, MRRA
ArkansasDepends	Labor on HVAC, plumbing and electrical workInstalling, repairing or replacing mechanical and electrical items in an existing building, such as heating and air conditioning units and water heaters, is taxed. First installation in a new building is not. Wiring, ducts and pipes are not taxed. Appliance and motor repair is taxed.	MaterialsOn untaxed contract work you pay tax on materials when you buy them. On taxed repair or replacement jobs you charge tax to the customer on labor and materials.	State source Arkansas Gross Receipts Tax Rules GR-9, GR-9.17 and GR-21
CaliforniaNot taxedFull California guide	Labor on HVAC, plumbing and electrical workInstallation labor on a building is not taxed. Repair labor on equipment is not taxed either; the parts are.Read the full California guide	MaterialsMixed. For materials such as wiring, pipe and ductwork you are the consumer and pay tax when you buy. For fixtures such as AC units, furnaces, lights and plumbing fixtures you are the retailer and owe tax on their sale price.Also know: Contractors that supply fixtures need a seller's permit. District tax rates follow the job site.	State source CDTFA Regulation 1521, Construction Contractors CDTFA Tax Guide for Construction Contractors
ColoradoNot taxed	Labor on HVAC, plumbing and electrical workSeparately stated labor is not taxed. Home-rule cities set their own rules.	MaterialsDepends on the contract. Lump-sum: you are the consumer and pay tax on materials. Time-and-materials: you buy tax-free and charge tax on the materials, with a sales tax license. Furnaces, air conditioners and electrical fixtures are taxed to the customer.Also know: Exempt projects need a certificate (DR 0172). City or county use tax may be paid through the building permit.	State source FYI Sales 6, Contractors and Retailer-Contractors Colorado Sales Tax Guide
ConnecticutDepends	Labor on HVAC, plumbing and electrical workLabor on existing commercial, industrial and income-producing property is taxed. New construction and owner-occupied homes of 1 to 3 units are not. Repair or maintenance of units such as AC units and furnaces is taxed on any property.	MaterialsOn installations you are the consumer and pay tax; furnaces, central AC and water heaters cannot be bought on a resale certificate. On taxed repairs you can buy parts for resale and charge tax to the customer.Also know: Every contractor and subcontractor needs a sales and use tax permit, even for untaxed work.	State source IP 2018(2), Building Contractors' Guide to Sales and Use Taxes
DelawareTaxed	Labor on HVAC, plumbing and electrical workNo sales tax. Instead contractors pay a gross receipts tax on everything received for work and materials on Delaware property, after a monthly deduction.	MaterialsNo sales or use tax when you buy materials. Materials you supply count in your gross receipts. Payments to licensed subcontractors can be deducted.Also know: Contractors need an annual business license. Out-of-state contractors must post a bond on larger contracts.	State source 30 Del. C. 2501 to 2502, Contractors Delaware licenses and gross receipts tax rates
District of ColumbiaDepends	Labor on HVAC, plumbing and electrical workConstruction and major repairs are not taxed. Real property maintenance, such as minor repairs and furnace and AC cleaning, is taxed. Repair of equipment that is personal property is taxed.	MaterialsSales of materials to contractors are retail sales, so you pay tax when you buy them.	State source D.C. Code 47-2001, definitions OTR, real property maintenance services
FloridaNot taxedFull Florida guide	Labor on HVAC, plumbing and electrical workLabor on real property contracts is not taxed, even when labor and materials are itemized. Repair of equipment that is personal property is taxed, including the labor.Read the full Florida guide	MaterialsYou pay tax on materials as the consumer. The exception is a retail sale plus installation contract, where you charge tax on the materials; it has strict requirements.Also know: Contractors doing only real property work should not register as dealers unless they fabricate items.	State source Rule 12A-1.051, Contractors Florida DOR Tax Information Publication 03A01-03
GeorgiaNot taxed	Labor on HVAC, plumbing and electrical workInstallation and repair labor on a building is not taxed, as long as it is separately stated on the invoice. Separately stated repair labor on equipment is not taxed either; the parts are.	MaterialsYou pay tax when you buy materials, including on government jobs. On untaxed or customer-supplied materials you accrue use tax.Also know: All contractors must register and file monthly. Out-of-state contractors post a 10% performance bond.	State source Georgia DOR, Contractor FAQs Rule 560-12-2-.26, Contractors
HawaiiTaxed	Labor on HVAC, plumbing and electrical workHawaii has a general excise tax (GET) instead of sales tax. All gross income from contracting, labor and materials, is taxed at 4% plus the county surcharge. Equipment repair is a service and is also taxed.	MaterialsYou buy materials that go into the job at the 0.5% wholesale GET rate with a resale certificate. Materials cannot be deducted from contracting income.Also know: Payments to licensed subcontractors can be deducted. GET may be passed on to the customer.	State source Tax Facts 99-3, GET and Use Tax for Construction Contractors Hawaii general excise tax
IdahoNot taxed	Labor on HVAC, plumbing and electrical workPlumbers, electricians and HVAC contractors improving real property, including home repairs, do not charge sales tax. Separately stated repair labor on equipment is not taxed; the parts are.	MaterialsYou pay tax when you buy materials, under any contract type. A customer's exemption does not pass to you.Also know: Contractors that also sell goods without installing them need a seller's permit.	State source Idaho State Tax Commission, contractors working in Idaho IDAPA 35.01.02, Sales and Use Tax Rules
IllinoisNot taxed	Labor on HVAC, plumbing and electrical workIllinois does not tax labor. For equipment repair, Service Occupation Tax applies to the parts; if parts are not separately stated, tax is on 50% of the bill.	MaterialsYou owe Use Tax on your cost of materials built into real estate, under any contract type. Separately stating materials does not change this.Also know: Tax shown on a customer invoice for real property materials counts as overcollected: refund it or pay it to the state.	State source IDOR Sales Tax Audit Manual, Chapter 13, Construction Contractors Publication 113, Service Occupation Tax
IndianaNot taxed	Labor on HVAC, plumbing and electrical workInstallation labor on real property is not taxed when separately stated. For equipment repair, separately stated labor is exempt; if not separated and parts are over 10% of the charge, the whole charge is taxed.	MaterialsTime-and-materials contracts: you buy tax-free on Form ST-105 and charge tax on the materials. Lump-sum contracts: you pay tax on materials and charge none.Also know: Time-and-materials contractors must register as retail merchants.	State source Sales Tax Information Bulletin 60, Contractors and Construction Material
IowaDepends	Labor on HVAC, plumbing and electrical workNew construction, reconstruction, alteration, expansion and remodeling labor is exempt. Repair and installation work below that level, such as fixing a water heater, furnace or central AC, is taxed on labor and materials. Appliance and machine repair is taxed.	MaterialsConstruction jobs: you pay tax when you buy and charge none. Repair jobs: you buy materials for resale and charge the customer tax, with credit for tax already paid.Also know: Most areas add a 1% local option tax to the 6% state rate.	State source Iowa Contractors Guide Iowa taxable services
KansasDepends	Labor on HVAC, plumbing and electrical workLabor on original construction and on residential work, including home repairs, is exempt. Labor on existing commercial buildings, including plumbing, electrical and HVAC work, is taxed. Appliance and equipment repair is taxed on parts and labor.	MaterialsYou pay tax when you buy materials on all jobs and cannot use a resale certificate. Repairers of equipment buy parts for resale and charge tax.Also know: Exempt-entity jobs use a Project Exemption Certificate. Out-of-state contractors register each contract over $10,000.	State source Publication KS-1525, Business Taxes for Contractors, Subcontractors and Repairmen
KentuckyNot taxed	Labor on HVAC, plumbing and electrical workLabor to install or repair fixtures in a building, such as furnaces, water heaters, wiring and plumbing, is not taxed. Equipment repair labor is taxed when sold with taxable parts, or when it is a service listed in the statute.	MaterialsYou pay tax when you buy materials and fixtures, under any contract type. A pure contractor cannot give a resale certificate.Also know: Contractors that also sell appliances or window AC units without building them in need a sales tax permit. Furnace repair under an extended warranty is taxed.	State source 103 KAR 26:070, Construction contractors
LouisianaNot taxed	Labor on HVAC, plumbing and electrical workLabor to build or repair immovable (real) property is not taxed; plumbing, heating, cooling and electrical systems are part of the building. Labor to repair movable property, such as refrigerators, washers and dryers, is taxed.	MaterialsYou pay sales or use tax on your purchases, even on state agency jobs, unless the agency gives you Form R-1020.Also know: The state rate rose to 5% on January 1, 2025.	State source LDR FAQ, sales tax on charges for labor
MaineNot taxed	Labor on HVAC, plumbing and electrical workConstruction contract labor, including repair of real property, is not taxed. Separately stated repair or installation labor on equipment is not taxed; the parts are.	MaterialsBy default you pay tax when you buy materials. A registered retailer billing time-and-materials plus tax can buy for resale and charge tax on the materials.Also know: Maine's service provider tax was repealed on January 1, 2026.	State source Instructional Bulletin No. 4, Contractors and Subcontractors
MarylandNot taxed	Labor on HVAC, plumbing and electrical workLabor to install or repair real property is not taxed, whether listed separately or in one price. Labor that restores equipment is not taxed; separately listed parts are.	MaterialsYou pay 6% when you buy materials for real property work. You can buy tax-free for resale only items that stay personal property, and then charge the customer tax.Also know: Materials for government jobs are taxed. A yearly construction license is needed unless you hold a Home Improvement License.	State source Business Tax Tip 18, Real Property Contractors and Maryland Taxes COMAR 03.06.01.03, Repairs
MassachusettsNot taxed	Labor on HVAC, plumbing and electrical workInstallation labor on a building is not taxed; the contractor pays tax on materials instead. For equipment repair, separately listed labor is not taxed; if not separated and parts are over 10% of the bill, the whole bill can be taxed.	MaterialsYou pay tax when you buy materials and do not use a resale certificate. If you sell a standard unit and install it at a separate price, you act as a vendor and charge tax on the unit.Also know: Jobs for government or 501(c)(3) bodies can use Form ST-5C to buy building materials tax-free.	State source Sales Tax Guide for Plumbers
MichiganNot taxed	Labor on HVAC, plumbing and electrical workA contractor building or repairing real estate pays tax on what it uses and may not charge sales or use tax to the customer, though it can build the tax into its price.	MaterialsYou pay the 6% tax at purchase, or use tax if none was charged. A contractor that is also a retailer can buy for resale but owes use tax when it takes stock for a job.	State source RAB 2025-18, Sales and Use Taxation of the Construction Industry
MinnesotaNot taxed	Labor on HVAC, plumbing and electrical workLabor to permanently attach items to a building, such as a furnace or water heater, and repair of those items, is untaxed construction labor. Separately listed labor on appliance repair is not taxed; the parts are.	MaterialsYou pay tax when you buy building materials. A business that is more than half retail buys for resale and pays use tax on stock used in jobs.Also know: Building cleaning and maintenance is a taxable service in Minnesota, which may cover some maintenance visits. Local taxes apply.	State source Fact Sheet 152, Labor Minn. Stat. 297A.61, definitions
MississippiTaxed	Labor on HVAC, plumbing and electrical workResidential jobs and prime contracts of $10,000 or less: 7% sales tax on gross income, labor included. Non-residential prime contracts over $10,000: 3.5% contractor's tax on the full contract price. Air conditioning and electrical repairs are taxed at 7%.	MaterialsComponent materials for HVAC, plumbing and electrical work are bought tax-free, under the prime contractor's Material Purchase Certificate on large jobs. Tools and equipment are taxed.Also know: Contracts over $75,000, or over $10,000 for out-of-state contractors, need the tax prepaid or bonded.	State source Mississippi DOR, Guide for Construction Contractors 35 Miss. Admin. Code Part IV, Subpart 10, Chapter 01
MissouriNot taxed	Labor on HVAC, plumbing and electrical workServices are not taxed unless a statute says so. For equipment repair, separately listed labor is not taxed; if not separated, the whole bill is taxed.	MaterialsYou pay tax when you buy materials as the final consumer. A contractor that is also a retailer buys stock for resale and pays tax on items taken for jobs.Also know: Project exemption certificates from schools, churches and government let you buy materials tax-free. Local sales taxes apply.	State source 12 CSR 10-112.010, Contractors
MontanaNot taxed	Labor on HVAC, plumbing and electrical workMontana has no general sales tax.	MaterialsNo state sales tax on materials.Also know: A 1% contractor's gross receipts tax applies to public construction contracts over $80,000, usually withheld by the public body.	State source Montana sales tax guidance Contractor's 1% gross receipts tax
NebraskaNot taxed	Labor on HVAC, plumbing and electrical workContractor labor is not taxed. Repair or maintenance of personal property, such as appliances, is taxed on labor and parts. Cleaning a furnace, AC, ducts or drains is a taxable building cleaning service.	MaterialsDepends on the option you choose. Option 1: buy tax-free and charge tax on materials, with labor listed separately. Option 2: pay tax when you buy. Option 3: buy tax-free and pay use tax when you take stock. Option 1 applies if you choose none.Also know: Contractors must register in the Contractor Registration Database.	State source Nebraska Construction Contractors FAQs Taxation of Contractors, general information
NevadaNot taxed	Labor on HVAC, plumbing and electrical workThe contractor is the consumer of materials and adds no sales tax to the bill. For equipment repair, separately listed labor is not taxed; a single charge is taxed in full unless parts are minor.	MaterialsYou pay tax when you buy materials, or use tax on untaxed out-of-state purchases. Only a registered retailer that actually resells may use a resale certificate.Also know: Showing sales tax on the invoice turns the job into a taxable retail sale.	State source Tax Bulletin SUT 14-0002, Construction Contractors Repairs and Reconditioning
New HampshireNot taxed	Labor on HVAC, plumbing and electrical workNew Hampshire has no general sales tax.	MaterialsNo state sales tax on materials.	State source NH DRA, general information FAQ
New JerseyDependsFull New Jersey guide	Labor on HVAC, plumbing and electrical workRepairs and maintenance of a building, such as fixing plumbing or an electrical outlet, are taxed. Capital improvements, such as a new heating system, new central air, rewiring or a new water heater, are not. Repair of window AC units and appliances is taxed on labor and parts.Read the full New Jersey guide	MaterialsYou pay tax when you buy all materials; there is no resale option for real property work. On a taxed repair, the separately stated cost of materials can be left out of the taxable amount.Also know: For a capital improvement, the owner gives you Form ST-8. Hard-wired alarm installation is taxed even as a capital improvement.	State source Tax Topic Bulletin S&U-3, Contractors and New Jersey Taxes
New MexicoTaxed	Labor on HVAC, plumbing and electrical workConstruction receipts, including repairs and materials, are subject to gross receipts tax (GRT), not sales tax. The tax is on the contractor but is usually passed on to the customer.	MaterialsGive the supplier a Type 6 nontaxable transaction certificate (NTTC) to buy materials that become part of the project without GRT. GRT is then due on your full receipts.Also know: The invoice must show the tax or say it is included. Construction is reported at the job-site location.	State source FYI-105, Gross Receipts and Compensating Taxes: An Overview
New YorkDependsFull New York guide	Labor on HVAC, plumbing and electrical workRepair, maintenance and installation work is taxed on labor and materials. Capital improvements are not taxed when the customer gives Form ST-124. Replacing a gas furnace is a capital improvement; repairing its controls is taxed. Equipment repair is taxed.Read the full New York guide	MaterialsYou pay tax when you buy materials. On taxed repairs you charge tax on the full bill and can take a credit for tax paid on materials passed to the customer. Resale certificates generally cannot be used.Also know: Publication 862 lists item by item what counts as a capital improvement and what counts as a repair.	State source TB-ST-129, Contractors: repair, maintenance and installation services TB-ST-104, Capital improvements Publication 862, capital improvement or repair
North CarolinaDependsFull North Carolina guide	Labor on HVAC, plumbing and electrical workRepair, maintenance and installation services (RMI) on a building or equipment are taxed. A real property contract for a capital improvement is not. A contract mixing both is taxed under a 25% rule.Read the full North Carolina guide	MaterialsOn capital improvement contracts you are the consumer and pay tax on materials. On RMI jobs you can buy parts that become the customer's property exempt, and charge tax on the full sales price.Also know: Get Form E-589CI (Affidavit of Capital Improvement) from the customer. Without it, work on real property is treated as taxed RMI.	State source NCDOR Sales and Use Tax Bulletins (SUTB 72 and 75), January 2026
North DakotaNot taxed	Labor on HVAC, plumbing and electrical workConstruction and repair labor on a building is not taxed, and repair labor on equipment is not taxed either.	MaterialsYou pay tax when you buy materials, even for exempt customers such as schools or hospitals. You can build it into the price but not show it as a sales tax line. Parts for equipment repair are bought for resale and taxed on the invoice.Also know: A Contractor's Certificate, with a sales and use tax permit, lets you pay use tax instead of paying tax at purchase.	State source Contractors Tax responsibilities for contractors
OhioNot taxed	Labor on HVAC, plumbing and electrical workRepairs, construction and additions to a building are not taxed; plumbing, electrical and HVAC repair on a building is untaxed building maintenance. Repair of equipment that is personal property, such as appliances, is taxed.	MaterialsOn building work you are the consumer and pay tax on materials. On personal property or business fixture jobs, such as HVAC for a computer room, you buy for resale and charge tax on the whole invoice.Also know: Whether a unit is part of the building or a business fixture needs judgment. Larger businesses also pay the Commercial Activity Tax.	State source Ohio sales and use taxability Ohio sales tax for construction contractors (2022)
OklahomaNot taxed	Labor on HVAC, plumbing and electrical workContracts and labor for improvements to real property are not taxed.	MaterialsYou pay tax when you buy materials and cannot use a sales tax permit to avoid it. Narrow exceptions exist for some public and church contracts.Also know: Materials bought tax-free out of state need a consumer use tax account.	State source Oklahoma Tax Commission, businesses help center OAC 710:65, sales and use tax rules
OregonNot taxed	Labor on HVAC, plumbing and electrical workOregon has no general sales or use tax.	MaterialsNo sales tax on materials.Also know: Larger businesses pay the Corporate Activity Tax on Oregon commercial activity.	State source Sales tax in Oregon Corporate Activity Tax
PennsylvaniaNot taxed	Labor on HVAC, plumbing and electrical workConstruction and repair of real estate are not taxed. Repair of equipment that is personal property, including replacement parts, is taxed.	MaterialsYou pay tax on everything you furnish and install and may include it in the price, but not as a separate line. Items that do not become part of the building, such as a portable dishwasher, can be bought for resale and taxed to the customer.Also know: HVAC units, boilers and fixtures can be bought tax-free only for exempt customers, using Form REV-1220.	State source 61 Pa. Code 31.6, Construction contractors Building machinery and equipment
Rhode IslandNot taxed	Labor on HVAC, plumbing and electrical workContractors on construction contracts, which include repair of real property, pay tax as consumers of materials rather than collecting tax on the job. Separately stated repair labor on equipment is not taxed; the parts are.	MaterialsYou pay tax when you buy materials, tools and equipment. If you also sell materials at retail, or contract to sell them at a set price plus service, you are a retailer and must collect tax.	State source 280-RICR-20-70-54, Contractors and Subcontractors 280-RICR-20-70-24, Repairers
South CarolinaNot taxed	Labor on HVAC, plumbing and electrical workA contractor improving real property is the consumer of what it buys, so nothing is charged on the contract. For equipment repair, parts are taxed; labor is untaxed only if parts and labor are agreed and invoiced separately.	MaterialsYou pay tax when you buy materials, including HVAC, plumbing and electrical items. A business set up as a retailer buys for resale and charges tax on materials; its separately stated installation labor is not taxed.Also know: Whether you are a retailer or a contractor depends on the facts, such as a showroom, advertising and use of resale certificates.	State source SC Sales and Use Tax Manual, Chapter 16, Construction Contractors
South DakotaTaxed	Labor on HVAC, plumbing and electrical workPrime contractors pay a 2% contractor's excise tax on gross receipts for building, installing or repairing real property fixtures, including remodels. Cleaning or adjusting only, such as a furnace clean, is subject to sales tax instead. Equipment repair is subject to sales tax.	MaterialsYou pay state and municipal sales or use tax on all materials, tools and supplies.Also know: A contractor's excise tax license is required. Subcontractors are generally covered by the prime contractor's tax.	State source Contractor's Excise Tax Guide (July 2026) Contractor's excise tax
TennesseeNot taxed	Labor on HVAC, plumbing and electrical workDo not charge sales tax on work to real property; an installed HVAC unit counts as real property. Installing or repairing items that stay personal property, such as a window AC unit, is taxed.	MaterialsYou pay sales tax on materials, or use tax on out-of-state purchases, and may build it into your price. Contractor-dealers buy on a resale certificate and report use tax on stock used in contracts.Also know: The state's test: can the customer take it with them when they move?	State source Sales Tax Issues for Contractors
TexasDependsFull Texas guide	Labor on HVAC, plumbing and electrical workNew construction labor and residential repair or remodel labor are not taxed. Repair, remodeling or restoring nonresidential (commercial) property is taxed on the total charge. Appliance and equipment repair is taxed.Read the full Texas guide	MaterialsNew construction and residential work: on a lump-sum contract you pay tax on materials; on a separated contract you buy on a resale certificate and collect tax on the materials price. Nonresidential repair: tax on the total charge.Also know: Scheduled periodic maintenance and adding new usable square footage are not nonresidential repair.	State source Publication 94-116, Real Property Repair and Remodeling Publication 96-259, Taxable Services
UtahNot taxed	Labor on HVAC, plumbing and electrical workLabor to repair or renovate a building, or fixtures permanently attached to it such as furnaces and built-in AC, is not taxed. Repair of personal property, including dishwashers, fridges, stoves, washers and dryers, is taxed on labor and parts.	MaterialsOn furnish-and-install jobs you are the final consumer, pay tax on materials and must not collect sales tax from the owner.	State source Publication 42, Installation and Repair of Property Attached to Real Property Publication 25, Sales and Use Tax General Information
VermontNot taxed	Labor on HVAC, plumbing and electrical workDo not charge sales tax on real property work. Labor that restores equipment to its original condition is not taxed; the parts are.	MaterialsYou pay 6% tax when you buy materials built into real property, or pay use tax. A business that is mainly a retailer may elect retailer treatment.Also know: On jobs for nonprofit or government owners, exemption certificates can make incorporated materials exempt.	State source Vermont Department of Taxes, contractors BR-1299, Sales and Use Tax for Contractors
VirginiaNot taxed	Labor on HVAC, plumbing and electrical workReal property contractors are treated as consumers and do not pass tax on to customers. For equipment repair, separately charged labor is exempt and parts are taxed; if parts are not itemized, the whole charge is taxed.	MaterialsYou pay tax on materials as the consumer, or use tax if the supplier did not charge it, and should factor it into bids. A resale certificate cannot be used for contract materials.Also know: Contractors that also sell at retail register as dealers.	State source 23VAC10-210-410, Contractors Va. Code 58.1-609.5, service exemptions
WashingtonTaxed	Labor on HVAC, plumbing and electrical workBuilding, repairing or improving structures for consumers is a retail sale. The prime contractor collects sales tax on the full contract price, including labor. Equipment repair is also a retail sale.	MaterialsYou buy materials that go into the job for resale with a reseller permit, then charge tax on the total price. Tools and supplies are taxed to you. Speculative builders pay tax on all materials.Also know: Retailing B&O tax also applies to gross receipts.	State source WAC 458-20-170, Constructing and repairing for consumers Washington DOR, custom construction
West VirginiaDepends	Labor on HVAC, plumbing and electrical workWork that results in a capital improvement, such as installing central AC or a new furnace, is exempt. Repairs, maintenance and other installations are taxed on labor and materials. Installing or replacing a window AC unit is taxed.	MaterialsCapital improvement jobs: you pay tax on materials. Taxed repair jobs: you can buy parts passed to the customer tax-free with an exemption certificate, then charge tax on the total.Also know: TSD-310 lists HVAC, plumbing and electrical jobs by type. Municipal tax may apply.	State source TSD-310, Capital Improvement Rule TSD-300, Construction Contractors
WisconsinDepends	Labor on HVAC, plumbing and electrical workInstalling central air, furnaces, wiring and plumbing is real property work and not taxed. Repair or service of listed items, such as furnaces, air conditioners, boilers, heaters and bathroom fixtures, is taxed on labor and parts.	MaterialsReal property work: you are the consumer, pay tax on materials and charge none. Taxed repairs: you buy parts for resale and charge tax on the full price, including trip charges.Also know: A contractor acting as a retailer needs a seller's permit.	State source Publication 207, Sales and Use Tax Information for Contractors
WyomingNot taxed	Labor on HVAC, plumbing and electrical workLabor or service to real property is not taxed. Repair or alteration of personal property is taxed.	MaterialsYou are the end consumer of materials and pay sales tax, or use tax when the seller did not charge it.Also know: Out-of-state contractors need extra registration and a bond or retainage.	State source Wyoming DOR, Sales Tax 101 (June 2023)

Local sales taxes, exempt buyers (government, nonprofits, resale), and special rules for new construction or manufactured homes are left out. They can change the answer for a single job.

Full state guides

The long answer for the states with the most complicated rules

In these states the answer changes with the job: repair or capital improvement, home or commercial building. Each guide covers labor, materials, filing, licensing, payroll and the mistakes we see in trade shop books, with the state source next to every rule.

In QuickBooks Online

Set up tax the way your state expects

If you are the end user of materials, tax belongs in the cost of the materials, so job costs show the real price. If you resell materials, it belongs on the invoice as tax you collect and file. Mixing the two up leaves you owing tax you never collected, or makes jobs look cheaper than they were.

Run ServiceTitan? It applies sales tax by tax zone and sends it to QuickBooks with each invoice, so the zones need to follow the rules above. Checking that tax agrees between the two every month is part of our bookkeeping services for ServiceTitan. When the two disagree, see why ServiceTitan and QuickBooks sales tax do not match.

Sales tax filing is part of our monthly bookkeeping for trade shops on QuickBooks Online, from $599 a month: see HVAC bookkeeping, plumbing bookkeeping, electrical contractor bookkeeping, roofing, septic, drain cleaning, general contractors and lawn care and landscaping.

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Questions

About this guide

Is this tax advice?

No. It is a plain summary of each state's published guidance, with a link to the source. Rules have exceptions for exempt customers, government jobs, new construction and local taxes. Check the state source or a tax adviser before you change how you bill.

What does "depends on the job" mean?

The state treats some jobs differently from others. Common splits are repair versus capital improvement, residential versus commercial, and lump-sum versus time-and-materials contracts. The row says which split applies.

Why does it matter how materials are taxed?

It decides whether tax goes into your cost of materials or onto the customer's invoice. If QuickBooks is set up the wrong way, you either undercharge tax and owe it later, or your job costs look lower than they really are.

Is HVAC, plumbing or electrical labor taxable in Texas?

It depends on the building. Labor to repair or remodel a home is not taxed, and neither is labor on new construction. Repair, remodeling or restoration of nonresidential (commercial) property is taxed on the total charge, labor included. Repairing appliances and equipment is taxed. Scheduled periodic maintenance and adding new usable square footage do not count as nonresidential repair. Source: Texas Comptroller Publication 94-116.

How often is this page checked?

Every row was checked against the state source on October 10, 2026. States change their guidance, so always open the source link before relying on a row.

Can you set this up in our QuickBooks?

Yes. Sales tax filing is part of our monthly bookkeeping for trade shops on QuickBooks Online, including setting up tax on materials and labor the way your state expects.