Is Labor Taxable?


Quick Answer

Whether labor is taxable depends on state law and the state's definition of labor, reports the Houston Chronicle. For example, in Pennsylvania, labor is taxable for works done on a taxable item, such as a vehicle, according to the Department of Revenue of Pennsylvania.

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Full Answer

In California, labor that creates, produces, processes, or assembles a product is taxable. However, labor related to nontaxable sales, such as building a computer for a retailer to sell at a store, is nontaxable. In this state, repair labor is also nontaxable, as stated by the California Tax Service Center.

In Maryland, fabrication labor is taxable, but installation labor, which the state defines as work done to install a complete functioning unit at a site, is not subject to tax, notes the Comptroller of Maryland.

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