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In states with a sales tax, you do pay sales tax on the labor charges.

In some jurisdictions, like in Norway, for instance, if you are a craftsman working on your own property, you are (supposed) to pay VAT on the added value your work brings to the property.

I expect very few people to report this to the authorities, unless, of course, you are going to do something which is significant enough to require you to apply for a building permit.

You earn gross income with your labor, on which you pay tax. The net is used to pay Jiffy Lube, which pays employer taxes on the mechanic’s labor, and passes that cost onto you, the customer. If you do your own labor for yourself, pay neither.