Indiana Sales Tax for Contractors (2026): Who Pays on a Home Remodel
Whether an Indiana contractor charges sales tax on a home remodel, who pays on materials, and three jobs worked at 7%.
Not tax advice. General information from each state's revenue department, checked Oct 29, 2026. Rates shown are the state rate; city and county tax is extra where it applies. The facts of your job and contract can change the answer; for a specific job, ask a tax professional in your state.
The rule in Indiana
Materials only
On a lump-sum job you pay tax on materials and charge none.
7%
7%
Itemizing or time and materials
Separately stated materials make it time and materials: you collect 7% on the materials.
Registration for time and materials
Source: IN DOR Information Bulletin 60 (DOR bulletin, Mar 2024)
“Instead, such contractors will not charge their customers sales tax.”
Three jobs, worked
| Job | Customer | You pay |
|---|---|---|
| Bathroom $12,000 job, $5,000 materials | $0 | $350 |
| Kitchen $40,000 job, $15,000 materials | $0 | $1,050 |
| Addition $90,000 job, $35,000 materials | $0 | $2,450 |
On the kitchen: The customer pays no sales tax. You pay $1,050 on $15,000 of materials at 7%, and build it into the price. Itemize materials or bill time and materials and you collect 7% on the materials from the customer instead.
Also check
- Pick the contract type before you bid; it decides who pays the tax on materials.
Indiana sales tax questions
Do contractors charge sales tax in Indiana?
Not on a home remodel. The contractor pays tax on materials when buying them and charges the homeowner none. Separately stated materials make it time and materials: you collect 7% on the materials.
Is labor taxable in Indiana?
Not for remodeling a home.
What rate do contractors pay on materials in Indiana?
7%. Indiana has no local sales tax.
Compare other states
How we checked
We read each state's sales tax rule for construction contractors on the revenue department or legislature site, and its 2026 state rate. Two independent research passes covered all 50 states and DC, and a third reviewer checked the result. Where a state's own page would not load, the row names the copy we read. Last checked .
This guide explains the general rule for remodeling an owner-occupied home. It is not tax advice.