# Georgia Contractor Taxes and Licensing: Sales Tax, Licenses and Income Tax

Georgia treats contractors on real property jobs as the consumer of their materials: you pay the 4% state tax plus local tax when you buy, and don't collect it on the contract. Even so, all contractors, including subs and out-of-state firms, must register for a sales tax number. Separately stated repair and installation labor is exempt.

## Key takeaways

- All contractors, resident or not, general or sub, must register with DOR for a sales and use tax number.
- Repair and installation labor is exempt only when separately stated on the invoice. Lump it in and it becomes taxable.
- Nonresident contractors face bonding at $10,000 and up, and 2% withholding by the general contractor on contracts of $250,000 or more unless bonded.
- Georgia's individual income tax is a flat 4.99% for 2026, and the corporate rate is also 4.99%.
- Workers' comp applies once you regularly employ three or more people, and corporate officers count toward the three.

## What's unusual about Georgia for contractors?

Georgia's Department of Revenue (DOR) is blunt about registration: "ALL contractors, resident, nonresident, general and subs, must register for a sales and use tax number." That surprises shops coming from states where a contractor who only pays tax on materials never registers. Georgia also cares about **how your invoice reads**. Repair and installation labor is exempt only when it's broken out on its own line. And it watches out-of-state contractors closely, with bonds and withholding on larger jobs.

This guide summarizes official Georgia sources checked on 2026-10-19. It's general information, not tax advice. Rules and rates change quarterly in some cases, so confirm with DOR and a Georgia CPA before you rely on it.

## Does Georgia charge sales tax on contractor labor?

Not when it's separately stated. DOR's contractor FAQ says "repair and installation labor are exempt when separately stated on an invoice" and "if not separately stated, labor charges are taxable." On real property construction contracts, the contractor pays tax on materials as the consumer and doesn't collect tax from the customer on the contract. We found no residential vs. commercial split in DOR's contractor guidance.

> **One invoice line can cost you**
>
> Say an HVAC tech bills a $900 repair as a single line: parts and labor together. Under DOR's rule, the labor isn't separately stated, so it becomes taxable. Show labor on its own line.
>
> This is an illustrative example. Ask your CPA how it applies to your specific invoices.

## How do Georgia contractors handle tax on materials?

A contractor performing a real property contract "is deemed to be the consumer of all tangible personal property used or consumed in performing such contract," per DOR, and that includes government jobs. You pay sales tax at the supply house and build it into your bid. If you buy from an out-of-state vendor that doesn't charge Georgia tax, "use tax is due." See [use tax for contractors](https://www.brix.so/learn/use-tax-for-contractors) for how to report it.

### Rules for out-of-state (nonresident) contractors

- "Nonresident contractors have bonding requirements if the contract the contractor will be performing is $10,000 or greater," and the job must be registered with DOR.
- On contracts of **$250,000 or more**, the general contractor must withhold **2%** from a nonresident subcontractor on behalf of the state unless DOR confirms the sub has posted a sales and use tax bond.

The broader question of who pays tax on materials versus labor across states is covered in [sales tax on labor vs. materials](https://www.brix.so/learn/sales-tax-on-labor-vs-materials).

## What's the sales tax rate in Georgia?

The state rate is **4%**. Counties add local taxes in 1% units, such as LOST, SPLOST and TSPLOST, plus MARTA in metro Atlanta and the City of Atlanta's 1% MOST. DOR publishes a new rate chart each quarter; the current one runs October 1 through December 31, 2026. Because local rates vary by county, the tax on your materials depends on where you buy and use them, so check the chart before you price a job across county lines.

## What contractor licenses does Georgia require?

Two boards under the Secretary of State cover most construction. The **State Licensing Board for Residential and General Contractors** licenses residential and general contractors once a job crosses the dollar threshold in O.C.G.A. § 43-41-2. We couldn't load the board's site to confirm the current figure, so check with the board before bidding. Its rules require a general contractor to show a "minimum net worth in the amount of $150,000," and offer a **limited tier** license capped at contracts of $1,000,000 with a $25,000 net worth minimum. Trade licenses come from the **Construction Industry Licensing Board**.

**Georgia contractor licenses by trade**

| Trade | Agency | License | Link |
| --- | --- | --- | --- |
| Residential / general | State Licensing Board for Residential and General Contractors | Residential basic, residential light commercial, general, limited tier general | [Board rules](https://rules.sos.ga.gov/gac/553) |
| Electrical | Construction Industry Licensing Board, electrical division | Class I (single-phase, up to 200 amps) or Class II (unrestricted) | [Rules 121-3](https://rules.sos.ga.gov/gac/121-3) |
| HVAC | Construction Industry Licensing Board, conditioned air division | Class I (up to 175,000 BTU heating / 60,000 BTU cooling) or Class II (unrestricted) | [Rules 121-3](https://rules.sos.ga.gov/gac/121-3) |
| Plumbing | Construction Industry Licensing Board, plumbing division | Master plumber Class I (one- and two-family dwellings) or Class II; journeyman | [Rules 121-3](https://rules.sos.ga.gov/gac/121-3) |
| Roofing | No separate state roofing license found | May fall under residential/general licensing | Check with the board |

_Sources: Georgia SOS board rules, verified 2026-10-19. No dollar threshold was found for the trade licenses._

**Local licensing:** Georgia cities and counties generally require a business license or occupation tax certificate, and building departments check state licenses before issuing permits. Ask the city or county where you're based. For the bigger picture on licensing, read our [contractor license guide](https://www.brix.so/learn/contractor-license).

## What income and business taxes do Georgia contractors pay?

Georgia has a **flat 4.99%** individual income tax for 2026, per DOR's tax updates page. Sole proprietors and owners of LLCs and S corporations pay it on their share of business profit. Corporations pay **4.99%** of Georgia taxable net income, plus a **net worth tax**: corporations with net worth of $100,000 or less owe none but must file, and the maximum is $5,000 for net worth over $22 million.

Because no employer withholds for you, plan [quarterly estimated taxes](https://www.brix.so/learn/quarterly-estimated-taxes-for-contractors) for both federal and Georgia. Our [quarterly estimated tax calculator](https://www.brix.so/tools/quarterly-estimated-tax-calculator) helps with the federal side; for Georgia's estimated payment rules, check with the department or your CPA.

## When is workers' comp required in Georgia?

"If you regularly employ three or more persons in your Georgia business, you are required to provide the benefits," says the State Board of Workers' Compensation. Corporate officers and LLC members count. Up to five can waive coverage on themselves, but "officer exemptions do not reduce the number of employees." Sole proprietors and partners are treated as employers, not employees, and can elect coverage in writing. More in [workers' compensation for contractors](https://www.brix.so/learn/workers-compensation).

## Local taxes Georgia contractors should know

- **Local sales taxes** stack on the 4% state rate in 1% units and change by county and quarter.
- **Business license or occupation tax** from your city or county.
- **Permit fees** set by local building departments. Not a tax, but price them in.

## Neighboring state guides

Working near the line? [Florida](https://www.brix.so/taxes/florida) has no personal income tax but decides sales tax by contract type. [South Carolina](https://www.brix.so/taxes/south-carolina), [Tennessee](https://www.brix.so/taxes/tennessee), [Alabama](https://www.brix.so/taxes/alabama) and [North Carolina](https://www.brix.so/taxes/north-carolina), which taxes repair and installation work, each handle contractors differently.

BRIX invoices keep labor and materials on separate lines, which is how Georgia's labor exemption is applied. It also tracks licenses, insurance and permits and flags renewals before they lapse. BRIX doesn't file or advise on taxes; that stays with your CPA.

- [Invoicing and payments](https://www.brix.so/features/invoicing-payments): Turns finished jobs into invoices and politely chases unpaid ones until the money is in your account.
- [Quotes and estimates](https://www.brix.so/features/quotes-estimates): Builds accurate quotes on site and follows up on every open estimate.
- [Compliance and permit tracking](https://www.brix.so/#use-cases): Tracks licenses, safety documents and permits and flags renewals before they lapse.

## Frequently asked questions

### Do Georgia contractors need a sales tax number?

Yes. The Georgia Department of Revenue says all contractors, resident or nonresident, general or sub, must register for a sales and use tax number, even though contractors on real property jobs usually pay tax on materials as consumers rather than collecting it from customers.

### Is labor taxable in Georgia?

Repair and installation labor is exempt when it's separately stated on the invoice. If labor isn't separately stated, DOR treats it as taxable. Write labor on its own line to keep the exemption.

### Do contractors pay sales tax on materials in Georgia?

Yes. On real property contracts, Georgia treats the contractor as the consumer of materials, so you pay state and local sales tax when you buy them, including on government jobs. If an out-of-state vendor doesn't charge Georgia tax, you owe use tax.

### What do out-of-state contractors need to know in Georgia?

Nonresident contractors face bonding requirements on contracts of $10,000 or more and must register the job. On contracts of $250,000 or more, the general contractor withholds 2% from a nonresident sub unless DOR confirms a sales and use tax bond.

### What is Georgia's income tax rate for 2026?

Georgia's individual income tax is a flat 4.99% for 2026, according to the Department of Revenue. The corporate income tax rate is also 4.99%, and corporations may owe a separate net worth tax capped at $5,000.

### How many employees before workers' comp is required in Georgia?

Three. Georgia requires coverage when you regularly employ three or more people, and corporate officers and LLC members count. Up to five officers or members can waive coverage on themselves, but they still count toward the three.

### Does Georgia have a state contractor license?

Yes. The State Licensing Board for Residential and General Contractors licenses residential and general contractors above a dollar threshold set by statute, and the Construction Industry Licensing Board licenses electrical, plumbing and conditioned air contractors. Check the current threshold with the board.

## Related

- [Do Contractors Charge Sales Tax on Labor or Materials?](https://www.brix.so/learn/sales-tax-on-labor-vs-materials)
- [What Is Use Tax for Contractors?](https://www.brix.so/learn/use-tax-for-contractors)
- [What Is a Contractor License?](https://www.brix.so/learn/contractor-license)
- [What Is Workers' Compensation Insurance?](https://www.brix.so/learn/workers-compensation)
- [Quarterly Estimated Taxes for Contractors: How They Work in 2026](https://www.brix.so/learn/quarterly-estimated-taxes-for-contractors)
- [Quarterly Estimated Tax Calculator for Self-Employed Contractors (2026)](https://www.brix.so/tools/quarterly-estimated-tax-calculator)
- [Florida Contractor Taxes and Licensing: Sales Tax, Licenses and Workers' Comp](https://www.brix.so/taxes/florida)
- [South Carolina Contractor Taxes and Licensing: Sales Tax, Licenses and Income Tax](https://www.brix.so/taxes/south-carolina)
- [Alabama Contractor Taxes and Licensing: Materials Tax, Licenses and Workers' Comp](https://www.brix.so/taxes/alabama)
- [Tennessee Contractor Taxes and Licensing: Sales Tax, Business Tax and Licenses](https://www.brix.so/taxes/tennessee)

## Sources

- [Georgia DOR — Contractor FAQs](https://dor.georgia.gov/contractor-faqs) (checked 2026-10-19)
- [Georgia DOR — Sales and Use Tax Rates](https://dor.georgia.gov/taxes/business-taxes/sales-use-tax/tax-rates) (checked 2026-10-19)
- [Georgia DOR — Sales Tax Rates, General (rate chart effective Oct. 1–Dec. 31, 2026)](https://dor.georgia.gov/sales-tax-rates-general) (checked 2026-10-19)
- [Georgia DOR — Important Tax Updates (2026 flat 4.99% income tax)](https://dor.georgia.gov/taxes/important-tax-updates) (checked 2026-10-19)
- [Georgia DOR — Corporate Income and Net Worth Tax](https://dor.georgia.gov/taxes/corporate-income-and-net-worth-tax) (checked 2026-10-19)
- [Georgia Rules, Dept. 553 — State Licensing Board for Residential and General Contractors](https://rules.sos.ga.gov/gac/553) (checked 2026-10-19)
- [Georgia Rules, Ch. 121-3 — Construction Industry Licensing Board (electrical, plumbing, conditioned air)](https://rules.sos.ga.gov/gac/121-3) (checked 2026-10-19)
- [Georgia State Board of Workers' Compensation — Insurance FAQs](https://sbwc.georgia.gov/frequently-asked-questions/workers-compensation-insurance-faqs) (checked 2026-10-19)

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Written by BRIX Editorial Team. Last updated 2026-10-19. General information, not tax, legal or financial advice.
Canonical: https://www.brix.so/taxes/georgia