Texas sales tax for contractors in Mansfield comes down to three questions. Is the job new construction or repair and remodeling? Is the property residential or nonresidential? And did you write the contract lump-sum or separated?
Answer those three, then pick the rate from the job site address, not your shop address. That’s the whole framework. Everything else is detail.
We put this together because the same questions come up every fall, usually from a contractor bidding a Q4 job in Mansfield, Arlington, Burleson, or Midlothian, or from someone who just opened a letter from the Comptroller and wants to know how bad it is.
Three questions decide whether you charge sales tax
Texas charges 6.25 percent state sales and use tax, and local jurisdictions (cities, counties, special purpose districts, and transit authorities) can add up to 2 percent, for a maximum combined rate of 8.25 percent.
Who hands that money over changes with the job.
If you build new improvements to real property, or repair and remodel a home, you are a contractor under the Comptroller’s rules. If you repair, remodel, or restore commercial property, you are providing a taxable service instead. Same tools, same crew, different tax result.
The contract form matters too. A lump-sum contract is one agreed price with no separate charge for materials, and it makes you the consumer of the materials. A separated contract splits the price into a stated amount for materials and a stated amount for labor, and it makes you a retailer of the materials.
New construction, repair, and the 5 percent rule that can tax an entire job
New construction labor isn’t taxed. That covers building a new structure, finishing an unfinished one, and initial finish out work to the interior or exterior of a structure.
Repair, remodeling, and restoration of nonresidential property is taxed. The old lump-sum versus separated distinction no longer applies to that work, so the total charge is taxable either way.
Here’s the part that catches people on mixed jobs. Minor repair, restoration, or remodeling performed in connection with new construction is not taxable where that portion is 5.0 percent or less of the overall lump-sum charge. Above that, the taxable and nontaxable labor must be separately identified, and if they aren’t, the entire contract is presumed to be taxable remodeling.
Run the math on a commercial job in Mansfield. A $215,000 lump sum that includes $15,000 of remodeling tie-in work is 6.98 percent remodeling. That’s over the line. If the invoice doesn’t split it out, the exposure is 8.25 percent of the full $215,000, or $17,737.50, instead of 8.25 percent of $15,000, which is $1,237.50.
Same job at $209,000 with $9,000 of remodeling comes to 4.31 percent, and the minor remodeling isn’t taxable. A few thousand dollars of scope moves the answer.
Residential and nonresidential work, and what you actually bill
For residential repair and remodeling, a lump-sum contract means you pay tax on your supplies, materials, equipment, and taxable services when you buy them, and you don’t charge your customer tax. Under a separated contract, you give suppliers resale certificates instead of paying tax on incorporated materials, and you charge the customer on the materials.
For nonresidential repair or remodeling, you collect state and local tax on the total charge for the job, including all costs passed on to the customer, except separately stated building permit fees you pay on the customer’s behalf. On a $48,000 Burleson office remodel with a $600 permit fee stated separately, the tax base is $47,400 and the tax at 8.25 percent is $3,910.50.
Here’s a residential kitchen remodel in Mansfield, billed both ways. The numbers are an example, not a quote.
| Line | Lump-sum contract | Separated contract |
|---|---|---|
| Price to the customer | $60,000, one number | $34,000 materials plus $26,000 labor |
| Your cost of materials | $30,000 | $30,000 |
| Tax you pay your supplier | $2,475 | $0, resale certificate |
| Tax you collect | None | $2,805 |
| Customer’s total | $60,000 | $62,805 |
One detail worth knowing before you mark materials up: as a retailer under a separated contract you collect tax based on the agreed contract price of the incorporated materials, and the rate must be applied to that price or your cost, whichever is greater.
The 8.25 percent question: city limits versus unincorporated Johnson and Ellis County
Inside city limits, the four cities we see most are all at the cap. Mansfield is 8.25 percent, Arlington is 8.25 percent, with 6.25 percent state and 2 percent city, Burleson publishes a total of 8.25 percent, and Midlothian is 8.25 percent.
Outside city limits it gets interesting. Johnson County itself adds no county sales tax, and Ellis County doesn’t either. The local piece in unincorporated areas comes from emergency services districts instead.
Ellis County Emergency Services District No. 2 imposes a 2 percent local tax, excludes the cities of Midlothian and Ovilla, and partially covers unincorporated areas in ZIP Codes 75154, 75167, 76065, and 76084. A second piece of that district, No. 2-A, sits at 1.75 percent where it overlaps the Ovilla Municipal Development District. In Johnson County, the Comptroller has even set up combined areas, such as Alvarado/Johnson County Emergency Services District 1-B at 2 percent, to sort out overlapping jurisdictions.
So two Midlothian-address jobs a mile apart can carry the same 8.25 percent but belong to different local codes on your return. And some unincorporated addresses don’t reach the full 2 percent local. Pull the rate by street address from the Comptroller’s Sales Tax Rate Locator before you bid, not by city name or ZIP.
Which address?
Under a separated contract you collect local tax on the materials charge based on the location of the job site.
Under a lump-sum contract, if the local tax your supplier collected is less than the 2 percent cap, additional local use tax is due based on where the goods are first stored or used, and items shipped to the job site from outside Texas mean you accrue local tax based on the job site. That second rule is the one that quietly creates assessments for contractors who buy out of state.
When a separated contract isn’t worth it
If you only do residential remodels and you price by the job, lump-sum is usually simpler. You pay tax once at the supply house, your invoice has no tax line, and your customer sees one number. Going separated means resale certificates on file, a materials price you can defend, and local codes tracked per job site. That’s real bookkeeping work.
If most of your work is nonresidential repair and remodeling, the choice doesn’t save you anything, because the full charge is taxable either way. Spend the effort on documenting new construction scope instead.
And if you’re mostly a subcontractor, remember that subcontractors are not required to use the same type of contract as the general contractor. Your paperwork has to stand on its own.
One more timing note for Q4. Quarterly filers report October through December by January 20, and if a due date falls on a Saturday, Sunday, or legal holiday, the next working day is the due date. January 20, 2027 is a Wednesday, so that one holds. December 20, 2026 is a Sunday, so a monthly filer’s November return is due Monday, December 21.
Frequently asked questions
Do Mansfield contractors charge sales tax on labor?
Not on new construction labor, and not on residential repair or remodeling labor. On nonresidential repair, remodeling, or restoration, you collect tax on the total charge for the job, which includes the labor.
Is the rate 8.25 percent everywhere around here?
Inside Mansfield, Arlington, Burleson, and Midlothian city limits, yes. Outside city limits in Johnson or Ellis County, the local piece depends on which emergency services district the address falls in, so check the address.
What rate applies if my shop is in Mansfield but the job is in Arlington?
The job site rate for separated contracts. Your office address doesn’t set the rate.
Can I buy materials tax free?
Only under a separated contract, by giving your supplier a resale certificate on the materials that go into the customer’s property. You still owe tax on equipment and consumables used to do the work.
Is there any reward for filing on time?
Yes. Permitted taxpayers can claim a 0.5 percent discount on tax timely reported and paid, plus another 1.25 percent for prepaying.
Talk to FFG Advisory before your next bid
We handle job costing, WIP, and the sales tax side for contractors around Mansfield, Arlington, Burleson, Midlothian, and Venus. If you’re bidding a job that crosses a city line, or you’ve got a notice sitting on the truck seat, we’ll go through your contracts and invoices and tell you where the exposure is and what to change. Call (954) 398-4909 or reach us through our contact page. You can also read more about our tax planning and preparation and construction bookkeeping work.
This article reflects Texas state and local sales tax rules as of October 2026. Talk to a tax professional about your situation.
Sources
- Texas Comptroller, Sales and Use Tax (rates, due dates, discounts)
- Texas Comptroller, Publication 94-116, Real Property Repair and Remodeling
- 34 Texas Administrative Code Section 3.291, Contractors
- Texas Comptroller, Rule 3.357, Nonresidential Real Property Repair, Remodeling, and Restoration
- Texas Comptroller, Publication 94-105, Local Sales and Use Tax
- Texas Comptroller, Combined Area Sales and Use Tax
- Texas Comptroller, Local Tax Rate Changes, January 2025 (Ellis County ESD No. 2)
- City of Burleson, Taxes
- Arlington Economic Development Corporation, Tax Environment
- SalesTaxHandbook, Mansfield, Texas Sales Tax Rate
- SalesTaxHandbook, Midlothian, Texas Sales Tax Rate
- SalesTaxHandbook, Johnson County, Texas Sales Tax Rates
