Question 1

Is contractor labor taxable in Texas?

Accepted Answer

It depends on the property. Texas taxes the LABOR on repair and maintenance work to COMMERCIAL or non-residential real property, but not the same work on residential property. Repair and maintenance is not the same thing as a capital improvement, which is exempt to the customer in Texas — the classification of the job is what decides the tax, not the wording on the invoice. Source: 34 Tex. Admin. Code §3.291 (Contractors) and §3.357 (Nonresidential real property repair, remodeling and restoration).

Question 2

Is contractor labor taxable in New York?

Accepted Answer

Yes. New York taxes the LABOR on repair and maintenance work to real property, on both residential and commercial jobs. Repair and maintenance is not the same thing as a capital improvement, which is exempt to the customer in New York when the customer signs Form ST-124 — the classification of the job is what decides the tax, not the wording on the invoice. 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).

Question 3

Is contractor labor taxable in Ohio?

Accepted Answer

It depends on the property. Ohio taxes the LABOR on repair and maintenance work to COMMERCIAL or non-residential real property, but not the same work on residential property. Repair and maintenance is not the same thing as a capital improvement, which is exempt to the customer in Ohio — the classification of the job is what decides the tax, not the wording on the invoice. Source: Ohio Rev. Code §5739.01(B)(3); §5739.02 (building maintenance and janitorial service is a taxable service; real property construction contractors are consumers of materials).

Question 4

Is contractor labor taxable in North Carolina?

Accepted Answer

Yes. North Carolina taxes the LABOR on repair and maintenance work to real property, on both residential and commercial jobs. Repair and maintenance is not the same thing as a capital improvement, which is exempt to the customer in North Carolina — the classification of the job is what decides the tax, not the wording on the invoice. Source: N.C. Gen. Stat. §105-164.4(a)(16) and §105-164.4H (repair, maintenance and installation services; real property contracts).

Question 5

Is contractor labor taxable in New Jersey?

Accepted Answer

Yes. New Jersey taxes the LABOR on repair and maintenance work to real property, on both residential and commercial jobs. Repair and maintenance is not the same thing as a capital improvement, which is exempt to the customer in New Jersey when the customer signs Form ST-8 — the classification of the job is what decides the tax, not the wording on the invoice. Source: N.J.S.A. 54:32B-3(b)(4); Tax Topic Bulletin S&U-2, "Sales Tax and Home Improvements".

Question 6

Is contractor labor taxable in Washington?

Accepted Answer

Yes. Washington taxes the LABOR on repair and maintenance work to real property, on both residential and commercial jobs. Repair and maintenance is not the same thing as a capital improvement — the classification of the job is what decides the tax, not the wording on the invoice. Source: RCW 82.04.050(2)(b); WAC 458-20-170 (constructing, repairing or improving real property for a consumer is a retail sale).

Question 7

Is contractor labor taxable in Arkansas?

Accepted Answer

Yes. Arkansas taxes the LABOR on repair and maintenance work to real property, on both residential and commercial jobs. Repair and maintenance is not the same thing as a capital improvement, which is exempt to the customer in Arkansas — the classification of the job is what decides the tax, not the wording on the invoice. Source: Ark. Code §26-52-301(3) (services taxed, including repair and maintenance of nonmechanical, passive or manually operated components of buildings).

Question 8

Is contractor labor taxable in Connecticut?

Accepted Answer

It depends on the property. Connecticut taxes the LABOR on repair and maintenance work to COMMERCIAL or non-residential real property, but not the same work on residential property. Repair and maintenance is not the same thing as a capital improvement, which is exempt to the customer in Connecticut — the classification of the job is what decides the tax, not the wording on the invoice. Source: Conn. Gen. Stat. §12-407(a)(37)(I) (services to industrial, commercial or income-producing real property are taxable).

State	Repair labor on real property	Source
Arkansas	Taxable — residential and commercial	Ark. Code §26-52-301(3) (services taxed, including repair and maintenance of nonmechanical, passive or manually operated components of buildings).
Connecticut	Taxable — commercial only	Conn. Gen. Stat. §12-407(a)(37)(I) (services to industrial, commercial or income-producing real property are taxable).
Hawaii	Taxable — residential and commercial	Haw. Rev. Stat. ch. 237 (General Excise Tax — levied on the business's gross income, contracting included, not on the customer).
Iowa	Taxable — residential and commercial	Iowa Code §423.2(6); Iowa Admin. Code r. 701-219 (enumerated services include carpentry, electrical and electronic repair, plumbing, painting and roof/siding/window installation and repair).
Kansas	Taxable — residential and commercial	K.S.A. 79-3603(p),(q) (services of installing or applying tangible personal property, and services to repair, service, alter or maintain real property).
Nebraska	Taxable — residential and commercial	Neb. Rev. Stat. §77-2701.16; Neb. Admin. Code tit. 316 ch. 1 §017 (contractor Option 1, 2 or 3 election).
New Jersey	Taxable — residential and commercial	N.J.S.A. 54:32B-3(b)(4); Tax Topic Bulletin S&U-2, "Sales Tax and Home Improvements".
New Mexico	Taxable — residential and commercial	NMSA 1978 §7-9-4 (gross receipts tax on receipts from performing services and selling property in New Mexico).
New York	Taxable — residential and commercial	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).
North Carolina	Taxable — residential and commercial	N.C. Gen. Stat. §105-164.4(a)(16) and §105-164.4H (repair, maintenance and installation services; real property contracts).
Ohio	Taxable — commercial only	Ohio Rev. Code §5739.01(B)(3); §5739.02 (building maintenance and janitorial service is a taxable service; real property construction contractors are consumers of materials).
South Dakota	Taxable — residential and commercial	SDCL ch. 10-46A (contractor's excise tax on realty improvement contracts) and ch. 10-45 (sales tax).
Texas	Taxable — commercial only	34 Tex. Admin. Code §3.291 (Contractors) and §3.357 (Nonresidential real property repair, remodeling and restoration).
Washington	Taxable — residential and commercial	RCW 82.04.050(2)(b); WAC 458-20-170 (constructing, repairing or improving real property for a consumer is a retail sale).
West Virginia	Taxable — residential and commercial	W. Va. Code §11-15-8; §11-15-2(b)(9) (contracting services are taxable, except work resulting in a capital improvement to real property).

Is contractor labor taxable?

Repair labor on real property, state by state

The answer in full, for the biggest rental markets