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Sales tax on labor in Indiana: not taxed on building repairs and new construction; repairs to things and installation depend on the job
In Indiana, labor is not taxed on building repairs and new construction; for repairs to things and installation it depends on the job. Read from Indiana's own revenue pages, checked November 6, 2026, with every answer quoted below.
Repairing a thing in Indiana
It depends. Repair labor on a thing is not taxed when it is listed separately from the parts. What it turns on: whether labor is separately stated from parts; if not, whether parts are more than 10% of the total charge.
- “Repair charges on tangible personal property are generally exempt as a charge for a service when separately stated from any materials used in the repairs. If the service charge is not separately stated, the entire transaction could be subject to sales tax if the materials are more than 10% of the overall charge” — Indiana Sales Tax Information Bulletin #60 (Contractors), page date: March 2024
Repairing a home or building in Indiana
Not taxed. On a time-and-material job (labor and materials priced separately) you charge tax on the materials only, not the labor. On a lump-sum job you pay tax when you buy the parts and charge no tax to the customer.
- “when tangible personal property is affixed to real property, the repairperson would be repairing real property ... Separately stated repair parts in a time and material contract would be subject to sales tax ... If the contract is not a time and material contract, then the repairperson would pay sales tax on the repair parts and would not charge sales tax on any part of the contract to their customers.” — Indiana Sales Tax Information Bulletin #60 (Contractors), page date: March 2024
Installation work in Indiana
It depends. Installation charges listed separately on the invoice are not taxed. What it turns on: whether the installation charge is separately stated on the invoice.
- “NOTE: Installation charges separately stated on an invoice are not included in gross retail income. Labor incurred as part of on-site installation may be exempt.” — Indiana Sales Tax Information Bulletin #60 (Contractors), page date: March 2024
New construction in Indiana
Not taxed. Labor on building and improving real property is not taxed. Who pays tax on materials depends on the contract: on a time-and-material contract the contractor charges the customer tax on the materials; on a lump-sum contract the contractor pays the tax when buying them.
- “contractors converting construction material into real property under a time and material contract must collect and remit sales tax on the material portion of their contracts.” — Indiana Sales Tax Information Bulletin #60 (Contractors), page date: March 2024
- “contractors using contracts that do not meet the definition of a time and material contract are not reselling construction material” — Indiana Sales Tax Information Bulletin #60 (Contractors), page date: March 2024
Listing labor separately on the bill in Indiana
Changes the answer. Separately stating labor keeps it out of tax for repairs of things and for installation; on real-property jobs it decides whether you are a retail merchant (charge tax on materials) or a consumer (pay tax on materials yourself).
- “Repair charges on tangible personal property are generally exempt as a charge for a service when separately stated from any materials used in the repairs. If the service charge is not separately stated, the entire transaction could be subject to sales tax if the materials are more than 10% of the overall charge” — Indiana Sales Tax Information Bulletin #60 (Contractors), page date: March 2024
- “NOTE: Installation charges separately stated on an invoice are not included in gross retail income. Labor incurred as part of on-site installation may be exempt.” — Indiana Sales Tax Information Bulletin #60 (Contractors), page date: March 2024
- “Repair charges on tangible personal property are generally exempt as a charge for a service when separately stated from any materials used in the repairs. If the service charge is not separately stated, the entire transaction could be subject to sales tax if the materials are more than 10% of the overall charge, which would make it a taxable bundled transaction.” — Indiana Sales Tax Information Bulletin #60 (Contractors), page date: March 2024
Materials on jobs in Indiana
Either: on a time-and-material contract (materials and labor stated separately) the contractor is a retailer and charges sales tax on materials; on a lump-sum or other contract the contractor is the consumer and pays tax when buying materials.
- “when tangible personal property is affixed to real property, the repairperson would be repairing real property ... Separately stated repair parts in a time and material contract would be subject to sales tax ... If the contract is not a time and material contract, then the repairperson would pay sales tax on the repair parts and would not charge sales tax on any part of the contract to their customers.” — Indiana Sales Tax Information Bulletin #60 (Contractors), page date: March 2024
- “contractors converting construction material into real property under a time and material contract must collect and remit sales tax on the material portion of their contracts.” — Indiana Sales Tax Information Bulletin #60 (Contractors), page date: March 2024
- “contractors using contracts that do not meet the definition of a time and material contract are not reselling construction material” — Indiana Sales Tax Information Bulletin #60 (Contractors), page date: March 2024
Trade services Indiana taxes
Not checked here. No official Indiana list of taxed trade services was checked, and Sales Tax Information Bulletin 60 names none.
Check with the Indiana Department of Revenue
Before you bill: check with the Indiana 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 Indiana with every state's answer, or with its neighbours just below.
Official sources for Indiana
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