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[musical introduction] Welcome to the Comptrollers Contractor Video Series. This video discusses the tax responsibilities for contractors who perform residential repair, remodeling and restoration work. If you dont understand the terms used in this video, please watch the Contractor Overview Video. As previously discussed in our Contractor Overview Video, repairing real property means mending or bringing the broken, damaged or defective real property back, as near as possible, to its original working order. Remodeling or restoring real property means rebuilding, replacing, altering, modifying or upgrading existing real property. For tax purposes, repairing, remodeling or restoring real property are all treated the same. The labor to repair, remodel, restore or maintain residential real property are not taxable. The incorporated materials into the real property are taxable. The taxing responsibilities for residential repair, remodeling and restoration work are identical to new constr