Sales tax on electrical work: what goes on the invoice

There is no national sales tax

Sales tax in the US is set at state level, and most states let counties, cities and special districts add their own tax on top. That means two jobs a few miles apart can carry different rates, and the same work can be taxable in one state and exempt in another. Five states have no statewide general sales tax at all, though localities in one of them still levy their own.

How it usually lands on electrical work

Materials you supply are usually taxable, and in several states a contractor is treated as the end consumer of materials — meaning you pay tax when you buy and do not itemize it to the customer. Whether installation labor is taxable depends on the state and often on whether the work is a repair or a capital improvement. Keep materials and labor separate on every invoice.

What a tax-ready invoice shows

• A unique, sequential invoice number.
• Your business name, address and, where you have one, your seller's permit or tax ID.
• The customer's name and the service address — the location often decides the rate.
• The invoice date and the date the work was performed.
• Materials and labor on separate lines, described per line.
• The taxable subtotal, the rate applied, and the tax amount as its own line.
• The total due, and any exemption certificate reference if the sale is exempt.

Finding your own rate

We deliberately do not publish rates — they change, and a stale number on an invoice is your problem, not ours. Look up the combined state and local rate for the service address with your state's revenue department, and confirm whether your type of work is taxable there before you charge or omit tax.

Worked example

Subtotal for the job

$525.00

Sales tax at your combined rate

you enter the rate

Total the customer pays

subtotal + tax

Any tax you collect is never your money — you are holding it for the state and remitting it on your next return.

Common questions

Should permits appear on the invoice?

Yes, as a clearly labeled pass-through line at cost, with the permit number if you have it. It reassures the customer and documents the job.

Is a repair different from a capital improvement for tax?

In several states, yes — new installation work and repairs are treated differently. Check with your state revenue department before deciding how to tax a job.

How do I invoice a job the inspector hasn't signed off yet?

Invoice for the work completed and note that final inspection is pending, or hold a stated retainage line until sign-off.