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Sales tax on labor in Tennessee: taxed on repairs to things, not on building repairs and new construction; installation depends on the job
In Tennessee, labor is taxed on repairs to things but not taxed on building repairs and new construction; for installation it depends on the job. Read from Tennessee's own revenue pages, checked November 6, 2026, with every answer quoted below.
Repairing a thing in Tennessee
Taxed. Repairing a thing (a car and a window air conditioner) is taxable, labor included.
- “Services provided to tangible personal property: charge sales tax ... Products and/or services provided to real property; DO NOT charge sales tax” — Sales Tax Issues for Contractors (TN Department of Revenue), page date: May 2022
- “Charges for installing and repairing tangible personal property that remains tangible personal property after installation are taxable.” — Sales Tax Issues for Contractors (TN Department of Revenue), page date: May 2022
- “Services subject to tax specifically enumerated by the law are: Repair of tangible personal property or computer software Installation of tangible personal property or computer software ... Cleaning tangible personal property and animal bathing” — Tennessee Sales and Use Tax Manual (August 2026), page date: August 2026
Repairing a home or building in Tennessee
Not taxed. Repair and maintenance of the building, its plumbing, wiring and fixtures (including built-in appliances and HVAC units) is not taxed. Don't put sales tax on the customer's bill; you pay tax on the materials when you buy them.
- “Services provided to tangible personal property: charge sales tax ... Products and/or services provided to real property; DO NOT charge sales tax” — Sales Tax Issues for Contractors (TN Department of Revenue), page date: May 2022
- “Contractors may include the sales tax they pay on materials in the price of the bid/invoice. Customers should not be directly billed for sales tax by contractors for services to real property.” — Sales Tax Issues for Contractors (TN Department of Revenue), page date: May 2022
- “Real property includes office buildings, houses, built-in appliances, HVAC units, sidewalks, roads, bridges, and parking lots. The sale, repair, or maintenance of real property or any installation of property that becomes a fixture is not subject to the sales and use tax.” — Tennessee Sales and Use Tax Manual (August 2026), page date: August 2026
- “Charges for maintenance or other work on buildings, electrical wiring, plumbing, or fixtures attached to and a part of any real property are not subject to the Tennessee sales tax if billed separately from services for the maintenance of tangible personal property.” — Tennessee Sales and Use Tax Manual (August 2026), page date: August 2026
Installation work in Tennessee
It depends. Installing something that becomes a fixture (attached to the building or like an HVAC unit): not taxed. Installing something that stays a movable thing after installation (window air conditioner, curtain rods): the installation charge is taxed, whether or not you also sold the item. What it turns on: whether the installed item becomes a fixture of the real property or stays tangible personal property.
- “Charges for installing and repairing tangible personal property that remains tangible personal property after installation are taxable.” — Sales Tax Issues for Contractors (TN Department of Revenue), page date: May 2022
- “Real property includes office buildings, houses, built-in appliances, HVAC units, sidewalks, roads, bridges, and parking lots. The sale, repair, or maintenance of real property or any installation of property that becomes a fixture is not subject to the sales and use tax.” — Tennessee Sales and Use Tax Manual (August 2026), page date: August 2026
- “Such installation sales are taxed regardless of whether the installation is made incident to the sale of tangible personal property or computer software” — Tennessee Sales and Use Tax Manual (August 2026), page date: August 2026
- “window air conditioning units, curtain and drapery rods, gasoline pumps, etc., is deemed to be personal property, and the related installation charges are therefore subject to the sales and use tax.” — Tennessee Sales and Use Tax Manual (August 2026), page date: August 2026
New construction in Tennessee
Not taxed. Building work on real property: don't charge sales tax. You are the user of your materials and pay sales tax (or use tax if bought out of state) when you buy them; you may build that tax into your price.
- “Services provided to tangible personal property: charge sales tax ... Products and/or services provided to real property; DO NOT charge sales tax” — Sales Tax Issues for Contractors (TN Department of Revenue), page date: May 2022
- “A contractor is the user and consumer of what they acquire when they perform a contract (lumber, paint, brick, etc.)” — Sales Tax Issues for Contractors (TN Department of Revenue), page date: May 2022
- “Contractors may include the sales tax they pay on materials in the price of the bid/invoice. Customers should not be directly billed for sales tax by contractors for services to real property.” — Sales Tax Issues for Contractors (TN Department of Revenue), page date: May 2022
Listing labor separately on the bill in Tennessee
It depends. For installing or repairing a thing, splitting labor out does not help: installation charges are part of the taxable price.
- “Charges for maintenance or other work on buildings, electrical wiring, plumbing, or fixtures attached to and a part of any real property are not subject to the Tennessee sales tax if billed separately from services for the maintenance of tangible personal property.” — Tennessee Sales and Use Tax Manual (August 2026), page date: August 2026
- “Such installation sales are taxed regardless of whether the installation is made incident to the sale of tangible personal property or computer software” — Tennessee Sales and Use Tax Manual (August 2026), page date: August 2026
Materials on jobs in Tennessee
Contractor is the user and consumer of materials (lumber, paint, brick) and pays sales tax when buying them in Tennessee, or use tax if bought outside; may include that tax in the bid price.
- “A contractor is the user and consumer of what they acquire when they perform a contract (lumber, paint, brick, etc.)” — Sales Tax Issues for Contractors (TN Department of Revenue), page date: May 2022
- “Contractors may include the sales tax they pay on materials in the price of the bid/invoice. Customers should not be directly billed for sales tax by contractors for services to real property.” — Sales Tax Issues for Contractors (TN Department of Revenue), page date: May 2022
Trade services Tennessee taxes
The services Tennessee's own pages name as taxed, each in the page's words:
- Cleaning of things (not buildings): “Tennessee law imposes sales tax on tangible personal property cleaning services”
- “Installing tangible personal property that remains tangible personal property after installation ... is subject to Tennessee sales tax.”
Where Tennessee's list of services comes from
- “Cleaning real property, such as windows and carpeting in a building, is not subject to sales tax.” — Tennessee Sales and Use Tax Manual (August 2026), page date: August 2026
- “Services subject to tax specifically enumerated by the law are: Repair of tangible personal property or computer software Installation of tangible personal property or computer software ... Cleaning tangible personal property and animal bathing” — Tennessee Sales and Use Tax Manual (August 2026), page date: August 2026
Check with the Tennessee Department of Revenue
Before you bill: check with the Tennessee 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 Tennessee with every state's answer, or with its neighbours just below.
Next door to Tennessee
- Alabama: home repair not taxed, installation depends
- Arkansas: home repair depends, installation depends
- Georgia: home repair not taxed, installation depends
- Kentucky: home repair not taxed, installation depends
- Mississippi: home repair depends, installation taxed
- Missouri: home repair not taxed, installation depends
- North Carolina: home repair taxed, installation depends
- Virginia: home repair not taxed, installation depends
Official sources for Tennessee
- Sales Tax Issues for Contractors (TN Department of Revenue) — May 2022
- Tennessee Sales and Use Tax Manual (August 2026) — August 2026
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