In Louisiana, labor to fabricate, repair, or maintain tangible personal property is generally subject to sales tax. Examples include repairing equipment, fabricating custom products, or performing taxable repair services on tangible personal property.

Labor to construct, install, remodel, or repair immovable (real) property is generally not subject to Louisiana sales tax. Examples include work performed on buildings, homes, permanently installed fixtures, and other real property improvements.

When labor charges are part of the sale of taxable tangible personal property, the taxability of the labor may depend on how the charges are billed. Certain installation, application, remodeling, or repair labor may not be taxable if the labor charges are separately stated on the invoice as provided by Louisiana law.

Common Examples

Common Mistakes to Avoid

• Assuming all labor charges are exempt from sales tax.

• Charging sales tax on labor performed to construct or repair immovable (real) property.

• Failing to separately state qualifying installation, repair, or remodeling labor charges on customer invoices when allowed by law.

• Assuming labor is taxable without first determining whether the work involves tangible personal property or immovable property.

Recommendation: Before determining whether labor charges are taxable, identify whether the work is performed on tangible personal property or immovable (real) property. Properly itemizing labor charges on invoices and maintaining accurate records can help ensure the correct amount of tax is collected and simplify compliance during an audit.