Sales tax on labor in Alabama: not taxed on building repairs and new construction; repairs to things and installation depend on the job

Repairing a thing in Alabama

It depends. Repair labor on a thing is not taxed if it is billed as its own line, apart from the parts. Parts are taxed. If you make (fabricate) a repair part, the whole part charge including that labor is taxed. What it turns on: labor billed separately from parts on the invoice.

• “Labor to repair or install property is exempt as long as it is billed as a separate item on the customers invoice. (Labor to fabricate an item is not exempt.)” — Sales Tax Brochure (Alabama Department of Revenue), page date: March 2026
• “only the sales price of the repair parts is taxable provided the charges for the repair parts and the charges for the repair labor or repair services are billed separately on the invoice to the customer.” — Rule 810-6-1-.84 Labor or Service Charges, page date: amended December 28, 1998

Repairing a home or building in Alabama

Not taxed: Alabama treats the contractor as the buyer of the materials, so the labor is not taxed. Repair or alteration of real property is contractor work: you pay sales tax when you buy the materials (you are the consumer of them) and do not charge sales tax to the customer on the job. No single Alabama sentence says "repair labor is not taxed"; it follows from the rule quoted here.

• “Contractors are deemed not to be reselling building materials which they purchase and affix to realty, but rather to be using or consuming such materials in performing their contracts.” — FAQ: Who is a contractor? (Alabama Department of Revenue), no date on the page

Installation work in Alabama

It depends. Installation labor is not taxed when shown as a separate charge on the bill and in your books. What it turns on: installation charge shown separately.

• “Labor to repair or install property is exempt as long as it is billed as a separate item on the customers invoice. (Labor to fabricate an item is not exempt.)” — Sales Tax Brochure (Alabama Department of Revenue), page date: March 2026
• “he may make a separate and additional charge for making the installation which, when shown separately in his billings and on his books, will not be subject to the sales tax.” — Rule 810-6-1-.81 Installation Charges, page date: Readopted effective October 1, 1982

New construction in Alabama

Not taxed. Contractors making additions or improvements to real property are the consumers of the building materials and pay the tax when they buy them.

• “Contractors are deemed not to be reselling building materials which they purchase and affix to realty, but rather to be using or consuming such materials in performing their contracts.” — FAQ: Who is a contractor? (Alabama Department of Revenue), no date on the page

Listing labor separately on the bill in Alabama

Changes the answer. Separately billed repair and installation labor is not taxed; a lump-sum or unseparated bill is taxed in full.

• “Labor to repair or install property is exempt as long as it is billed as a separate item on the customers invoice. (Labor to fabricate an item is not exempt.)” — Sales Tax Brochure (Alabama Department of Revenue), page date: March 2026
• “only the sales price of the repair parts is taxable provided the charges for the repair parts and the charges for the repair labor or repair services are billed separately on the invoice to the customer.” — Rule 810-6-1-.84 Labor or Service Charges, page date: amended December 28, 1998
• “he may make a separate and additional charge for making the installation which, when shown separately in his billings and on his books, will not be subject to the sales tax.” — Rule 810-6-1-.81 Installation Charges, page date: Readopted effective October 1, 1982

Materials on jobs in Alabama

Contractor is the consumer of building materials affixed to real property and pays sales tax (or use tax) when buying them.

• “Contractors are deemed not to be reselling building materials which they purchase and affix to realty, but rather to be using or consuming such materials in performing their contracts.” — FAQ: Who is a contractor? (Alabama Department of Revenue), no date on the page

Trade services Alabama taxes

None of the Alabama pages used here names a trade service, such as cleaning or lawn care, as taxed on its own.

What was not checked for Alabama

• If you also sell the item over the counter, Alabama's installation rule (810-6-1-.81) expects one standard retail price for counter and installed sales alike; that detail for retailers was not worked through here.

Check with the Alabama Department of Revenue

Before you bill: check with the Alabama Department of Revenue. As of November 6, 2026.

This is a plain-words summary of each state's own revenue guidance as of November 6, 2026, not tax advice. Rules have exceptions, and cities and counties can add taxes of their own. Check with the state's tax department, linked on every state's page, before you bill.

Compare Alabama with every state's answer, or with its neighbours just below.

Next door to Alabama

• Florida: home repair not taxed, installation depends
• Georgia: home repair not taxed, installation depends
• Mississippi: home repair depends, installation taxed
• Tennessee: home repair not taxed, installation depends

Official sources for Alabama

• Sales Tax Brochure (Alabama Department of Revenue) — March 2026
• Rule 810-6-1-.84 Labor or Service Charges — amended December 28, 1998
• Rule 810-6-1-.81 Installation Charges — Readopted effective October 1, 1982
• FAQ: Who is a contractor? (Alabama Department of Revenue) — no date shown

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