TEXAS - Sales Tax On Rehab Labor?

4 Replies

Hi All,

I got an estimate for rehab work on my Duplex in Texas and the contractor is claiming Sales Tax ~8% on the labor. Is this allowable? My gut says no and apparently so does the Comptroller of TX:

"Labor to repair, remodel, or restore residential real property is not taxable. Residential real property means family dwellings, including apartment complexes, nursing homes, condominiums, and retirement homes."

Source:https://comptroller.texas.gov/...

Seems pretty cut and dry, but wondering if I'm missing something.

Thanks in advance!

Doesn't sound like a legit contractor. Dallas-Fort Worth is slammed with construction work and not enough construction workers right now. Be sure to go off references. Too many contractors are burning investor right now. All of my projects take far longer this year than last.

Thanks all. Yeah, it seems pretty cut and dry and while he's actually NOT been too shady (aside from this sales tax)..aka he's on time, on budget (with reasonable pricing), and doing B/B+ work, so I'm going to give him the benefit of the doubt, he's just not sure, BUT will triple check by calling the Comptroller.

Update. Just so folks are aware, I called my contractor, explained to him what the Comptroller said and encouraged him to call himself. He did and agreed. I genuinely believe he didn't know and from his explanation he was confusing sales tax vs. income tax. Either way, he excluded the tax and he's delivering quality work for a fair price. He's now in my rolodex for future projects! Cheers!