Louisiana Contractor Taxes and Licensing: Sales Tax, LSLBC Licenses and Income Tax

In Louisiana, repairs and maintenance to immovable property such as a house aren't taxable, but repairs to movable property, like a refrigerator or washer, are. Contractors pay sales or use tax on materials, now at a 5% state rate since January 1, 2025, plus parish and city taxes. Government jobs are taxable too unless the agency provides Form R-1020.

What makes Louisiana different for contractors?

Louisiana's civil law roots show up in its tax vocabulary: property is immovable (land and buildings) or movable (everything else). That line decides whether your repair work is taxed. Louisiana also just rewrote its tax code: a higher state sales tax from 2025, a flat 3% personal income tax, and the end of the corporation franchise tax. And contractor licensing runs on a ladder of dollar thresholds starting at $7,500 for home improvement.

This guide reflects official Louisiana Department of Revenue (LDR) and licensing board pages as of 2026-10-19. It's general information, not tax advice. Parish rules vary, so confirm with LDR, your parish collector and a CPA.

Is labor taxable in Louisiana?

Labor on immovable property generally isn't. LDR says "repairs and maintenance to immovable property, such as a residence, are not taxable. However, repairs and maintenance of tangible personal property within a home (movable property) are subject to sales tax." Its examples of movable property include "refrigerators, washing machines, dryers and furniture." We found no residential vs. commercial distinction on these pages.

Who pays tax on materials in Louisiana?

The contractor does, as the consumer. That holds even on government work unless the agency issues Form R-1020. LDR told an HVAC contractor: "If the Louisiana state or municipal government agency did not provide you with the R-1020 with their contract then, yes," "you will owe the sales/use tax on the purchases," and "the fact that these purchases are for a state agency does not exempt you." Tools and consumables never qualify. For resale certificate forms, check with the department.

If you buy from out-of-state suppliers who don't charge Louisiana tax, you owe use tax; see use tax for contractors. For a multi-state comparison, read sales tax on labor vs. materials.

What is the Louisiana sales tax rate now?

The state rate is 5% from January 1, 2025, up from 4.45%, and LDR marks it "until 12/31/2029." "Sales and use taxes levied by political subdivisions of the state are in addition," so parish and city taxes stack on top. Local taxes are administered locally; the Louisiana Association of Tax Administrators publishes local rate information. Check the parish where materials are delivered and used.

Which Louisiana contractor licenses do you need?

The Louisiana State Licensing Board for Contractors (LSLBC) uses dollar thresholds measured on labor and materials together. Plumbers are licensed separately by the State Plumbing Board, which says everyone doing plumbing or gas work must be licensed or registered as an apprentice.

Local licensing: LSLBC warns that "an occupational license is NOT a contractor's license." Parishes and cities issue their own occupational licenses and permits, and some license electricians locally. Homeowners can build their own primary residence without a license, but not to rent or sell. More in our contractor license guide.

What are Louisiana's income and franchise taxes?

"For taxable periods beginning on or after January 1, 2025, the individual income tax rate is a flat 3%," says LDR. Corporations pay "a flat 5.5%," and the graduated brackets are gone. The corporation franchise tax "has been repealed for franchise tax periods beginning on or after January 1, 2026."

Individuals must file estimated payments when Louisiana tax after credits and withholding is "expected to exceed $1,000 for single filers and $2,000 for joint filers." Plan state and federal quarterly estimated taxes together; the quarterly estimated tax calculator handles the federal piece.

When do Louisiana contractors need workers' comp?

Right away. The Louisiana Workforce Commission's Office of Workers' Compensation says "employers in Louisiana are required to maintain workers' compensation insurance even if they only have one employee." A business owned by one person with no employees is exempt. Owners or officers holding at least 10% "may choose to exempt themselves," in writing to the insurer. See workers' compensation for contractors.

Local taxes in Louisiana

• Parish and municipal sales and use taxes, administered locally on top of the 5% state rate.
• Occupational licenses from parishes and cities, separate from LSLBC licensing.
• Permits and inspections from local building departments.

Neighboring state guides

Compare Texas, which splits residential and nonresidential repair, Mississippi, with its 3.5% contractor's tax, and Arkansas.