Texas Sales Tax for Remodeling Contractors (2026): Lump Sum vs Separated
Whether a Texas contractor charges sales tax on a home remodel, how a separated contract changes it, and three jobs worked at 6.25%.
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 Texas
Materials only
Residential repair and remodeling labor isn't taxed. On a lump-sum job you pay tax on materials and charge none.
6.25%
6.25% plus local up to 2%
Itemizing or time and materials
On a separated contract you collect tax on the materials, not the labor.
Resale certificate for separated contracts
Source: TX Comptroller Publication 94-116 (Comptroller publication, rev. Mar 2007)
“Labor to repair, remodel, or restore residential real property is not taxable.”
Three jobs, worked
| Job | Customer | You pay |
|---|---|---|
| Bathroom $12,000 job, $5,000 materials | $0 | $312.50 |
| Kitchen $40,000 job, $15,000 materials | $0 | $937.50 |
| Addition $90,000 job, $35,000 materials | $0 | $2,187.50 |
On the kitchen: The customer pays no sales tax. You pay $937.50 on $15,000 of materials at 6.25%, and build it into the price. Itemize materials or bill time and materials and you collect 6.25% on the materials from the customer instead.
How it works in Texas
Lump-sum contract
One price for the job. You're the consumer of materials: pay tax when you buy them and don't charge tax to the homeowner.
Separated contract
Materials and labor priced apart. You collect tax on the materials from the customer and can buy them for resale.
Nonresidential work
Repair and remodeling of commercial property is taxed differently. This page covers homes.
Also check
- Local sales tax can add up to 2%, for 8.25% total.
- Pick one contract type per job and write it into the contract.
Texas sales tax questions
Do contractors charge sales tax in Texas?
Not on a lump-sum home remodel. On a separated contract, they collect tax on the materials only.
Is labor taxable in Texas?
Not to repair or remodel a home. Repair and remodeling labor on commercial property is a different rule.
What is a separated contract in Texas?
A contract that states the price of materials apart from labor. The contractor collects sales tax on the materials.
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.