Do contractors charge sales tax in New York?
In New York a contractor is treated as the CONSUMER of the materials they build into real property. That means the contractor pays sales tax when they buy the materials, and does not add sales tax to the customer's invoice for that work — the tax is already inside the price. New York also has county, city or special-district rates on top of the state rate, so the rate depends on where the job site is, not where the contractor is based. Source: N.Y. Tax Law §1105(c)(3),(5); Publication 862; TB-ST-104 (Capital Improvements) and TB-ST-129 (Contractors — Repair, Maintenance and Installation Services to Real Property).
| What | New York |
|---|---|
| Contractor’s default role | Consumer of materials |
| What the charge is called | Sales Tax |
| Local rates on top | Yes — sourced to the job site |
| Capital improvement exempt to the customer | Yes |
Notes
The canonical version of the whole doctrine. ALL charges for materials and labor on a repair, maintenance or installation project are taxable, including expenses and markup. A capital improvement is exempt when the customer gives the contractor Form ST-124, Certificate of Capital Improvement. The contractor pays tax on materials at purchase and may credit tax paid on materials transferred in a taxable project. Form ST-120.1 is the contractor's own exempt purchase certificate.
Source
N.Y. Tax Law §1105(c)(3),(5); Publication 862; TB-ST-104 (Capital Improvements) and TB-ST-129 (Contractors — Repair, Maintenance and Installation Services to Real Property). — last checked 2026-09-15.
This is a summary of a state’s published guidance, not tax or legal advice. Rates and rules change, local jurisdictions add their own, and the treatment of a specific job depends on the contract and the work. Check the citation and speak to a CPA or a state tax adviser before relying on it.
How Seayora uses this rule
Seayora resolves this rule on every invoice a contractor raises — per line, from the job site’s own address — and prints the rate, the jurisdiction and this citation on the document itself, so the estimate a customer accepts is the invoice they are billed. Where the rule is more nuanced than a single answer, Seayora refuses to guess a total rather than quoting a confident wrong one.
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