# Missouri Contractor Taxes and Licensing: Untaxed Labor, Local Licenses

Missouri doesn't list construction, installation or repair labor among its taxable sales, so contractors generally don't charge sales tax on their work. Instead, a contractor improving real property is usually the consumer of materials and pays tax when buying them. The state rate is 4.225%, and cities, counties and special districts add their own.

## Key takeaways

- Labor isn't on Missouri's list of taxable sales in RSMo 144.020, so the tax question is mostly about materials.
- The 4.225% state sales and use tax is split among four funds; local rates come on top.
- Jobs for exempt entities use a project exemption certificate so materials can be bought tax-free.
- Missouri has no state general contractor, plumbing or HVAC board. Its statewide electrical contractor license is optional.
- Construction employers need workers' comp with even one employee; most other employers at five.

## Do Missouri contractors charge sales tax on labor?

Generally no. Missouri taxes what RSMo 144.020 lists: retail sales of tangible goods, admissions, utilities and telecommunications, lodging and meals, rentals and a few others. Construction, installation and repair services aren't on that list. That puts Missouri in the simpler group of states, unlike Iowa or Kansas, where some repair or remodeling labor is taxed.

The Missouri Department of Revenue's Contractors Tax Matrix defines a contractor as "any person entering into an agreement to improve, repair, replace, erect or alter real property." For those jobs, Missouri treats the contractor as the user of the materials it installs, so the tax shows up on your supply purchases, not on the customer's invoice. The matrix also lists "contractor sales of tangible personal property where title passed to the customer after installation" as exempt, which reflects the same idea: you paid the tax going in.

> **Selling items without installing them is different**
>
> If you sell parts, equipment or materials over the counter without installing them, that's a retail sale, and you may need to collect sales tax. Contractors who run a showroom or parts counter should ask the department how to register.

## Sales and use tax on materials in Missouri

The Department of Revenue says "the 4.225 percent state sales and use tax is distributed into four funds": 3% to general revenue, 1% to education, 0.125% to conservation and 0.1% to parks and soils. It adds that "cities and counties may impose a local sales and use tax," and special taxing districts can add more. Check the combined rate for an address with the department's rate lookup.

If you buy materials from an out-of-state supplier that doesn't charge Missouri tax, you generally owe use tax on them. The same goes for anything bought tax-free and then used on a job. Our [use tax for contractors](https://www.brix.so/learn/use-tax-for-contractors) guide walks through the common traps, and [sales tax on labor vs. materials](https://www.brix.so/learn/sales-tax-on-labor-vs-materials) compares Missouri's approach with other states.

### Jobs for exempt entities

When you build for a government body or other exempt organization, the matrix lists building materials as exempt when the entity "provides project exemption certificate." Get the certificate before you buy, keep it with the job file, and use it only for materials that go into that project.

> **Example: a $9,000 bathroom remodel in Missouri (illustrative)**
>
> Materials cost $3,500 and labor is $5,500. The contractor pays sales tax on the $3,500 at the supplier's local rate and builds that cost into the price.
>
> The homeowner's invoice shows no sales tax line. If the same job were for a school district with a project exemption certificate, the contractor could buy the $3,500 of materials tax-free.

## Contractor licensing in Missouri

Most Missouri contractor licensing happens at the city or county level. The Division of Professional Registration's board list includes electrical contractors but no board for general contractors, plumbers, HVAC or roofers, so those are handled by local governments. Kansas City, St. Louis and other cities run their own licensing and permit offices, and rules vary a lot from one county to the next.

**Missouri contractor licensing by trade**

| Trade | Who licenses it | License | Where to check |
| --- | --- | --- | --- |
| Electrical | Office of Statewide Electrical Contractors (optional) or your city/county | Statewide electrical contractor license, optional; local licenses still valid locally | [Statewide electrical contractor FAQ](https://pr.mo.gov/boards/electrical/FAQ's_for_Contractors.pdf) |
| Plumbing | City or county | Local license, where required | Your local building department |
| HVAC / mechanical | City or county | Local license, where required | Your local building department |
| General contractor, remodeler, roofer | City or county | Local license or registration, where required | Your local building department |

_Checked 2026-10-19 against the Missouri Division of Professional Registration. Local rules change; confirm with the city or county where the job is._

The electrical license is the one Missouri twist. The state's FAQ says plainly: "The statewide electrical contractor license is optional, not mandatory." It lets a contractor hold "one license that is recognized statewide instead of having a license for each city or county." Under section 324.920.4, a contractor working where no local license is required, or where it holds the local license, doesn't need the statewide one. A business that wants the statewide license must employ a licensed electrical contractor at a supervisory level. For licensing in general, see [contractor license](https://www.brix.so/learn/contractor-license).

## Missouri income tax and city earnings taxes

The Department of Revenue says "the individual income tax rate for tax year 2025 is 4.7%" at the top bracket. That's the rate most pass-through owners (sole proprietors, LLC members, S corp shareholders) see on business profit. Missouri adjusts its rate under a revenue-trigger law, so check the department's "What's new" page for the published 2026 rate when you file. Corporate income tax rules are on the department's business tax pages; ask your CPA which applies to your entity.

St. Louis adds a local layer. The city's Collector of Revenue describes "the one percent earnings tax" owed by city residents "regardless of the location of their employer" and by people who work in the city. Businesses there also handle a payroll expense tax, filed quarterly. If you work in other Missouri cities, check whether they levy an earnings or business license tax before you bid.

Federal and state estimated payments are due quarterly when you have no withholding. See [quarterly estimated taxes for contractors](https://www.brix.so/learn/quarterly-estimated-taxes-for-contractors) or plug your numbers into the [quarterly estimated tax calculator](https://www.brix.so/tools/quarterly-estimated-tax-calculator).

## Workers' comp rules for Missouri contractors

Missouri sets a lower bar for construction. The Division of Workers' Compensation says "Missouri employers are required to carry workers' compensation insurance if they have five or more employees," but construction employers must carry it with one or more. Construction means "employers who erect, demolish, alter or repair improvements," which covers most trades businesses. Coverage comes from private insurers or approved self-insurance. More: [workers' compensation](https://www.brix.so/learn/workers-compensation).

## Local taxes to watch in Missouri

- **Local sales and use tax:** cities, counties and special districts each add rates, so materials bought in one town can cost a different amount of tax than in the next.
- **Earnings taxes:** St. Louis levies a 1% earnings tax and a payroll expense tax; check any other city you work in.
- **Local licenses and permits:** often the biggest compliance cost for Missouri contractors working across county lines.

> **Not tax or legal advice**
>
> This page summarizes Missouri's official guidance as of the date shown. A CPA who works with Missouri contractors can tell you how it applies to your contracts, and the Department of Revenue can give written guidance on specific facts.

BRIX keeps your quotes, invoices and job costs in one place and syncs them with QuickBooks, so material purchases and tax paid are easy to hand to your bookkeeper. BRIX doesn't determine taxability or file returns.

- [Bookkeeping and tax help](https://www.brix.so/features/bookkeeping-taxes): Keeps expenses categorized, tracks 1099 subcontractors and sales tax, and reminds you of quarterly estimated tax dates. BRIX does not file taxes or give tax advice.
- [QuickBooks sync](https://www.brix.so/integrations/quickbooks): Syncs customers, invoices and payments with QuickBooks so the books match the jobs.
- [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.

### Nearby state guides

- [Kansas](https://www.brix.so/taxes/kansas): Commercial remodel labor is taxable
- [Illinois](https://www.brix.so/taxes/illinois): State-licensed plumbing and roofing
- [Iowa](https://www.brix.so/taxes/iowa): Repair labor is taxable
- [Nebraska](https://www.brix.so/taxes/nebraska): Contractor option elections

## Frequently asked questions

### Is labor taxable in Missouri?

Construction, installation and repair labor isn't on Missouri's list of taxable sales in RSMo 144.020, so contractors generally don't charge sales tax on labor. The contractor typically pays tax on the materials it installs.

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

Usually yes. A contractor improving real property generally pays sales tax when buying materials, or use tax if the seller didn't charge Missouri tax. Jobs for exempt entities with a project exemption certificate are the main exception.

### Does Missouri require a general contractor license?

Missouri has no state board that licenses general contractors, plumbers or HVAC contractors. Cities and counties set those rules, so check with the building department where the job is.

### Do I need a Missouri statewide electrical contractor license?

No, it's optional. You can keep working under local licenses where you hold them, or where no license is required. The statewide license lets you use one license across Missouri instead of one per city or county.

### What is the Missouri sales tax rate?

The state sales and use tax is 4.225%. Cities, counties and special districts add local taxes, so the total depends on the address. Use the Department of Revenue's rate lookup.

### When do Missouri contractors need workers' comp?

Construction employers need coverage with one or more employees, according to the Division of Workers' Compensation. Most other Missouri employers need it at five or more employees.

### Does St. Louis have an earnings tax?

Yes. St. Louis levies a 1% earnings tax on residents and on people who work in the city, and businesses file a payroll expense tax quarterly. Check with the Collector of Revenue for current rules.

## 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)
- [Kansas Contractor Taxes and Licensing: Residential vs. Commercial Labor](https://www.brix.so/taxes/kansas)
- [Illinois Contractor Taxes and Licensing: Use Tax, Service Occupation Tax and State Licenses](https://www.brix.so/taxes/illinois)
- [Iowa Contractor Taxes and Licensing: Repair Labor, Registration and Income Tax](https://www.brix.so/taxes/iowa)
- [Self-Employment Tax Calculator (2026)](https://www.brix.so/tools/self-employment-tax-calculator)

## Sources

- [Revised Statutes of Missouri — Section 144.020](https://revisor.mo.gov/main/OneSection.aspx?section=144.020) (checked 2026-10-19)
- [Missouri Department of Revenue — Contractors Tax Matrix (rev. 03-28-2025)](https://dor.mo.gov/taxation/business/documents/Contractors.pdf) (checked 2026-10-19)
- [Missouri Department of Revenue — Sales and use tax](https://dor.mo.gov/taxation/business/tax-types/sales-use/) (checked 2026-10-19)
- [Missouri sales tax rate lookup](https://missouri.atr.avalara.com) (checked 2026-10-19)
- [Missouri Department of Revenue — What's new (individual income tax)](https://dor.mo.gov/personal/whatsnew/) (checked 2026-10-19)
- [Missouri Office of Statewide Electrical Contractors — FAQs for electrical contractors](https://pr.mo.gov/boards/electrical/FAQ's_for_Contractors.pdf) (checked 2026-10-20)
- [Missouri Division of Professional Registration — Boards](https://pr.mo.gov/boards.asp) (checked 2026-10-20)
- [City of St. Louis Collector of Revenue — Earnings tax](https://www.stlouis-mo.gov/government/departments/collector/earnings-tax/index.cfm) (checked 2026-10-19)
- [Missouri Division of Workers' Compensation — Insurance requirements](https://labor.mo.gov/DWC/Employers/insurance) (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/missouri