Do Plumbers Need to Charge Sales Tax in Texas?

If you're a plumber operating in Texas, understanding when to charge sales tax is critical to avoiding fines from the Texas Comptroller. The short answer is: It depends on the type of work you are doing.

Residential Repair and Remodeling

In Texas, labor for repairing or remodeling a residential property is not taxable. However, the parts and materials you use *are* taxable.

Lump-Sum Contract: You pay the sales tax when you buy the parts. You do not charge the homeowner sales tax.

Separated Contract: You do not pay tax when buying the parts (you give your supplier a resale certificate). Instead, you charge the homeowner sales tax on the parts, but not on the labor.

Nonresidential (Commercial) Repair and Remodeling

For commercial properties, the rules flip. Both the labor and the materials are taxable. If you repair a leak in an office building, you must charge the standard 6.25% Texas State Sales Tax (plus any local taxes) on the *entire bill* — labor included.

New Construction (Residential or Commercial)

Labor for completely new construction is not taxable. Similar to residential repair, the tax is only applied to the materials used.

Proper Record Keeping

Always keep robust records. The Texas Comptroller can audit you years after the job is completed. Ensure every invoice has a sequential invoice number and clearly labels the job as residential or commercial. The distinction is critical and must be documented.

The Bottom Line

Your invoice must explicitly state whether the work was residential or commercial, and you must separate labor from parts if you are using a separated contract.

Try our free templates to keep your billing compliant:

Texas Plumber Invoice Generator

Texas HVAC Receipt Generator

Texas Electrician Estimate Generator