Texas Contractor Sales Tax 2026

Texas sales tax for contractors 2026. Labor taxable? Materials? Real rules from state revenue department.

Texas sales tax rate for contractors

  • Combined rate: 6.25% + local (~8.2% combined avg, capped at 8.25%)
  • Construction labor taxable: PARTIALLY - depends on contract type
  • Tax authority: Texas Comptroller of Public Accounts

How Texas treats contractor labor

NEW CONSTRUCTION labor exempt. REMODELING and REPAIR labor on real property TAXABLE. Lump-sum vs. separated contracts treated differently.

Texas-specific rules

No statewide GC license, but HVAC, electrical, plumbing require state license. Remodel/repair distinction is critical for sales tax - new construction exempt, remodeling and repair taxable.

Texas mechanics lien rights

Beyond sales tax, Texas contractor billing must respect the mechanics lien deadline of 15th day of 4th month after last work (residential); 15th day of 3rd month (commercial). Preliminary notice: Notice to owner required by 15th day of 2nd month after first work for residential.

Texas contractor licensing

Texas Department of Licensing and Regulation (TDLR) - for HVAC, electrical, plumbing only; no statewide GC license. Board: https://www.tdlr.texas.gov.

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Texas contractor resources by trade