Tennessee Sales Tax for Contractors (2026): Who Pays on a Home Remodel
Whether a Tennessee 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 Tennessee
Materials only
You pay tax on materials and don't charge tax on work to the home. Installing removable items is taxable.
7%
7% plus local up to 2.75%
Itemizing or time and materials
Not addressed.
None
Source: TN DOR, Sales Tax Issues for Contractors (DOR guide, May 2022)
“A contractor is the user and consumer of what they acquire”
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.
Also check
- Installing or repairing items that stay removable, like window air conditioners, is taxable.
Tennessee sales tax questions
Do contractors charge sales tax in Tennessee?
Not on a home remodel. The contractor pays tax on materials when buying them and charges the homeowner none.
Is labor taxable in Tennessee?
Not on work to the home itself. Installing or repairing removable items, like window air conditioners, is taxable.
What rate do contractors pay on materials in Tennessee?
7% plus local tax up to 2.75%. You pay it when you buy, like any buyer.
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.