Contractor tax and licensing guides by state
State guides for trades businesses covering whether installation labor is subject to sales tax, how materials and use tax work, which trades need a state license, and where to file. Every rule links to the state agency that publishes it and shows when we last checked it.
Taxes
- AlabamaAlabama contractor guide: tax on materials, local rates up to 5%, home builder license over $10,000, GC license at $100,000, and workers' comp rules.
- AlaskaAlaska has no state sales or personal income tax, but cities and boroughs set their own sales taxes. Contractor bonds, insurance and certificates.
- ArizonaArizona taxes new construction under prime contracting TPT at 65% of the job, while repair work pays tax on materials. ROC licensing, bonds and comp.
- ArkansasArkansas taxes some installation and repair labor in existing buildings. Contractor sales tax rules, $2,000 residential license trigger, comp at two.
- CaliforniaCalifornia contractors pay tax on materials, charge it on fixtures, and skip it on labor. CSLB license rules, the $800 FTB tax and comp, with sources.
- ColoradoColorado taxes contractors on materials, not labor, and your contract type decides who pays. Home-rule city use tax, licensing, comp and official sources.
- ConnecticutConnecticut contractor taxes: when 6.35% sales tax hits your labor, why homeowner jobs differ from commercial, DCP registration and trade licenses.
- DelawareDelaware has no sales tax, but contractors pay a 0.6472% gross receipts tax, need a $75 license, DOL registration and a 6% bond if nonresident.
- FloridaFlorida contractor sales tax explained: lump-sum vs. retail sale plus installation contracts, DBPR licensing, workers' comp from employee one.
- GeorgiaGeorgia contractor taxes: why every contractor registers for a sales tax number, separately stated labor, nonresident bonds, licenses and 4.99% income tax.
- HawaiiHawaii has no sales tax, but contractors owe 4% general excise tax plus county surcharge on gross income. Subcontract deduction, use tax and licensing.
- IdahoIdaho contractors pay 6% tax on materials and don't bill sales tax on improvement jobs. DOPL registration, trade licenses, comp rules and official sources.
- IllinoisIllinois contractors pay use tax on materials and don't charge sales tax on construction. Repair SOT, plumbing and roofing licenses.
- IndianaIn Indiana, your contract type decides sales tax: time-and-material contractors collect it, lump-sum contractors pay it. Licensing, 2026 rates and comp.
- IowaIowa taxes repair labor but not new construction or remodeling labor. Contractor registration, trade licenses, the 3.8% 2026 income tax and workers' comp.
- KansasKansas taxes commercial remodel and repair labor but not residential or new construction labor. PECs, roofer registration and more.
- KentuckyKentucky contractor guide: flat 6% sales tax with no local add-on, taxable warranty contracts since 2023, local occupational taxes and comp from one.
- LouisianaLouisiana contractor guide: 5% state sales tax since 2025, home vs. appliance repairs, LSLBC thresholds from $7,500, flat 3% income tax, comp from one.
- MaineMaine doesn't license general contractors, but it licenses electricians, plumbers and fuel techs and requires written contracts over $3,000. Tax rules too.
- MarylandMaryland contractors pay 6% sales tax on materials, need an MHIC license for home improvement and face new 2025 income tax brackets. The rules, sourced.
- MassachusettsMassachusetts contractor taxes: 6.25% sales tax on materials, the HIC vs. CSL split, the 4% millionaire surtax and workers' comp rules for trades.
- MichiganMichigan real property contractors owe 6% use tax on materials and need no sales tax license. LARA builder licenses, the $600 rule, city income tax, comp.
- MinnesotaMinnesota doesn't tax construction labor but does tax lawn care and building cleaning. Residential contractor and roofer licenses, 2026 brackets and comp.
- MississippiMississippi's 3.5% contractor's tax on commercial jobs over $10,000, 7% on residential trade work, MSBOC license thresholds and workers' comp at five.
- MissouriMissouri doesn't tax construction labor, and most contractor licensing is local. Sales and use tax on materials, St. Louis earnings tax and workers' comp.
- MontanaMontana has no general sales tax, but public jobs over $80,000 carry a 1% gross receipts tax. The 2026 contractor license, comp rules and official sources.
- NebraskaNebraska contractors pick Option 1, 2 or 3 to set how they handle sales tax on materials. Labor rules, DOL registration, 2026 income tax rates and more.
- NevadaNevada contractors pay tax on materials, not labor, and must keep sales tax off the invoice. Commerce Tax, MBT, NSCB licenses and comp rules, with sources.
- New HampshireNew Hampshire has no sales tax, but contractors still face the 7.5% Business Profits Tax, the 0.55% BET, trade licenses and cross-border use tax.
- New JerseyNew Jersey contractor sales tax on repair and installation labor, ST-8 exempt capital improvements, HIC registration, BAIT and workers' comp in one guide.
- New MexicoNew Mexico's gross receipts tax hits construction labor and materials at the job site rate. NTTCs, CID licenses, comp rules and sources for contractors.
- New YorkNew York contractor taxes: capital improvement vs. repair, ST-124 and ST-120.1, local-only home improvement licenses, NYC rules and workers' comp basics.
- North CarolinaNorth Carolina taxes repair, maintenance and installation labor on real property. RMI vs. capital improvement, Form E-589CI, licenses and 3.99% tax.
- North DakotaNorth Dakota contractors pay tax on materials they install and can't itemize it as sales tax. The $4,000 license rule, WSI state-fund comp and 2026 rates.
- OhioOhio contractors pay tax on materials for real property jobs, but lawn care, janitorial and carpet installs are taxable. CAT, city income tax and BWC comp.
- OklahomaOklahoma contractors pay tax on materials, not labor. No state GC license, CIB trade licenses, a new roofing endorsement in 2028, 4.5% top income tax.
- OregonOregon has no sales tax, so labor and materials go untaxed at the counter. What contractors still owe: income tax, CAT, Portland taxes, CCB and comp.
- PennsylvaniaPennsylvania contractors pay 6% tax on materials, register with the Attorney General for home improvement work and get trade licenses locally. Here's how.
- Rhode IslandRhode Island contractors: who pays the 7% tax on materials, CRLB registration and the 2028 residential license, income tax brackets and workers' comp.
- South CarolinaSouth Carolina contractor guide: contractor vs. retailer for sales tax, licenses at $500, $5,000 and $10,000, 2026 income tax brackets, comp at four.
- South DakotaSouth Dakota charges a 2% contractor's excise tax on realty improvement contracts and taxes most services. No income tax, trade licenses and workers' comp.
- TennesseeTennessee contractor guide: no income tax on wages, but a business tax over $100,000, F&E tax for LLCs, a $25,000 license trigger and comp from one.
- TexasIs labor taxable in Texas? Residential vs. nonresidential repair rules, lump-sum vs. separated contracts, TDLR licenses and the franchise tax.
- UtahUtah furnish-and-install contractors pay tax on materials and can't bill it to the owner. Repair labor rules, DOPL licenses, 4.45% income tax and comp.
- VermontVermont contractor rules: why you can't put sales tax on real property invoices, the $10,000 residential registration, income tax rates and workers' comp.
- VirginiaVirginia treats contractors as consumers of materials, licenses them in Class A, B or C by job size, and adds local BPOL tax. Rates, rules and sources.
- WashingtonWashington taxes the whole construction contract, labor included, and adds B&O tax on gross receipts. Licensing, L&I comp and sources for contractors.
- West VirginiaWest Virginia taxes repair labor but not capital improvements. The 6% rate, TSD-310 test, $5,000 residential license line and workers' comp rules.
- WisconsinWisconsin contractors pay tax on materials and don't charge it on real property work, but lawn care is taxable. Dwelling contractor rules and 2026 rates.
- WyomingIn Wyoming, contractors pay sales tax on materials and labor on real property isn't taxed. Nonresident bond rules, licensing, state-fund comp and sources.
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