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Ed Johnson
Ed Johnson, Tax Preparer
Category: Tax
Satisfied Customers: 10760
Experience:  GPHR Cert; U.S. Treasury Tax Advocacy Panel appointee
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Which states require tax on labor charges?

Resolved Question:

We service stand by emergency power generators up and down the Eastern US. We are trying to determine in which states we are required to charges sales tax on the labor charges. We are particularly interested in the New England States, North and South Carolina, Virginia, New York, New Jersey, Penn, Delaware, Maryland, Tennessee, Georgia, Alabama, Florida, West Virginia, Louisiana and Texas. We are also trying to find out about tax on service contracts where the contract price includes the parts and labor as set in the contract. Again, each state's rulings on this.

Submitted: 10 years ago.
Category: Tax
Expert:  Ed Johnson replied 10 years ago.

Generally, all states who have sales tax also have a use tax, and certain labor and services are taxed. However, which labor and services may vary from state to state.

The only states who do not have a sales and use tax are: Alaska, Delaware, Hawaii, Montana, New Hampshire, and Oregon.

Hawaii charges an excise tax in lieu of a sales tax.

For this reason, I recommend registering in each state, and obtaining a sales tax certificate. Then use the following software to help do your taxes:

http://www.thestc.com/

Ed Johnson and 2 other Tax Specialists are ready to help you
Customer: replied 10 years ago.

That didn't really answer the question I asked which was which states charge tax on labor. You answered which states have no sales tax.

Expert:  Ed Johnson replied 10 years ago.

All states except the ones listed charge tax on labor.

The states that you are concerned about, North and South Carolina, Virginia, New York, New Jersey, Penn, Delaware, Maryland, Tennessee, Georgia, Alabama, Florida, West Virginia, Louisiana and Texas, all charge sales tax on labor, including the conditions of the contracts that you are concerned about.

However, the detail of information you want requires about 12 to 18 hours of research.