Contracting Requirements by State
Welcome to our State Compliance Hub, your essential resource for navigating the legal, tax, and regulatory landscape of home services across the nation.
Hiring a contractor requires understanding the specific consumer protection laws and tax rules in your location. This hub provides a direct index to our articles detailing the unique requirements for home improvement contractors, organized by state.
Michigan
A Michigan homeowner's guide to home service contractor licensing and sales tax outlines key consumer information. In Michigan, the Department of Licensing and Regulatory Affairs (LARA) requires a license—either a Residential Builder License or a Maintenance & Alteration Contractor (M&A) License—for projects valued at $600 or more. Contractors must complete prelicensure education and pass a state exam. Crucially, Michigan's 6% sales tax generally does not apply to the labor or final contract price for real property improvements (construction and remodeling services); instead, contractors pay the sales tax on the materials when they are purchased. To ensure compliance, consumers must use the LARA Professional License Search online to verify a contractor's license status before starting a home improvement project.
Pennsylvania
For home service contractors in Pennsylvania, the primary requirement is mandatory registration under the Home Improvement Consumer Protection Act (HICPA) with the Office of the Attorney General (OAG) for projects totaling $5,000 or more. This state-level registration (PA HIC number) is distinct from local municipal licensing required by some cities for specialized trades. To verify licensing, consumers must check the OAG Registered Contractors database or call the hotline. Regarding sales tax, contractors act as the end consumer, paying the 6% state sales tax (plus local taxes in Allegheny/Philadelphia) on materials permanently affixed to real property; consequently, the labor and materials on the customer's final invoice for construction/repair are generally non-taxable.