Construction & Trades Bookkeeping in Texas

The question that decides Texas sales tax for construction & trades is how labor, materials, and installation are treated — states split on whether the contractor is the end consumer of materials or a reseller, and whether installation labor is taxable. Remote sellers may elect a single local use tax rate instead of tracking every jurisdiction. The franchise tax is a separate annual filing. We code parts and labor separately on every job so the treatment is deliberate.

Contractor and trade licensing in Texas is administered separately from tax registration, and the entity itself is registered with the Texas Secretary of State. Licensing is not bookkeeping, but it touches the books — license and permit costs, bonding, and insurance all need consistent treatment, and lenders reviewing a construction & trades file will look for them.

Employer registration in Texas runs through the Texas Workforce Commission, a different agency from the Texas Comptroller of Public Accounts that handles your sales tax — a separate account number, a separate login, and separate deadlines. Businesses routinely register for one and forget the other, then discover the gap when a notice arrives.

The Texas statewide base rate is 6.25%. Local rates stack on top and are generally sourced to the delivery address, so the effective rate varies within the state. Getting sourcing right is what keeps the liability account matching what you actually collected.