New York Sales Tax Calculator for Contractor Services
Calculate the total sales tax owed on contractor services in New York State. New York taxes the materials used in capital improvement and repair jobs, and taxes labor on repair/maintenance services. Capital improvements are exempt from labor tax. Enter your project details below to estimate your tax liability.
Capital improvements are exempt from labor tax. Repair/maintenance labor is taxable.
Cost of materials incorporated into the job (always taxable to the contractor or customer).
Labor charges billed to the customer. Taxable only for repair/maintenance and installation jobs.
Select the county where the work is performed.
If the contractor purchased materials and paid sales tax at purchase, those materials are not taxed again on the invoice.
Formula
Taxable Base = Taxable Materials + Taxable Labor
- Taxable Materials = Materials Cost (if contractor did NOT pre-pay tax), else $0
- Taxable Labor = Labor Cost if service type is Repair/Maintenance or Installation; $0 if Capital Improvement
Combined Tax Rate = NY State Rate (4%) + County/Local Rate + NYC Rate (if applicable)
Total Sales Tax = Taxable Base × Combined Tax Rate
Total Invoice with Tax = (Materials + Labor) + Total Sales Tax
Effective Rate = Total Sales Tax ÷ Total Invoice (pre-tax) × 100
Assumptions & References
- New York State base sales tax rate is 4% on all taxable transactions (NY Tax Law §1105).
- Capital improvements (permanent additions or alterations that add value to real property) are exempt from sales tax on labor charges. The contractor owes tax on materials purchased for the job unless the customer provides a valid ST-124 Certificate of Capital Improvement. (NY Tax Law §1105(c)(3); TSB-M-83(17)S)
- Repair and maintenance services are taxable on both materials AND labor charges billed to the customer. (NY Tax Law §1105(c)(5))
- Installation of tangible personal property (e.g., appliances, equipment not becoming part of real property) is taxable on both materials and labor.
- If the contractor purchased materials and paid sales tax at the time of purchase, those materials are not re-taxed on the customer invoice (no double taxation).
- County and local rates reflect 2024 rates as published by the NYS Department of Taxation and Finance. Rates may change; verify current rates at tax.ny.gov.
- NYC (all 5 boroughs) imposes an additional 4.5% local tax. The Metropolitan Commuter Transportation District (MCTD) 0.375% surcharge applies in NYC and select surrounding counties and is incorporated into the displayed county rates.
- This calculator provides estimates only and does not constitute tax or legal advice. Consult a licensed CPA or tax attorney for project-specific guidance.
- References: NY Tax Law §§1101, 1105, 1115; NYS Publication 862 (Sales and Use Tax Classifications of Capital Improvements and Repairs to Real Property); Form ST-124.