A repair business fixes copiers for customers located outside Texas. Is the repair service taxable, and does it matter whether the customer picks up the repaired copier in Texas or has it shipped back out of state?

Plain-English summary

A taxpayer asked about the taxability of repairing copiers for customers located outside Texas.

The Comptroller confirmed two exempt scenarios: the repair service is exempt from Texas sales tax if the repairman travels to another state to perform the repair, and it's also exempt if the repair is performed in Texas but the repairman ships or delivers the repaired copier to a location outside Texas once the work is done. However, Texas state and local tax must be collected if the out-of-state customer picks up the repaired copier in Texas — the customer's out-of-state location doesn't excuse the tax if the item changes hands back to them inside Texas. The taxpayer should keep shipment and delivery documentation as proof the service was exempt.

What this means for you

Repair businesses serving out-of-state customers

Whether your repair charge is taxable often comes down to logistics, not just the customer's home state: repairing on-site in another state, or shipping/delivering the finished repair out of Texas yourself, keeps the charge exempt. But if the customer (or their agent) picks the item up from you in Texas, you must collect Texas state and local tax regardless of where they're headquartered.

Accountants and tax professionals

Advise clients to build a paper trail (shipping receipts, delivery confirmations) any time they claim this exemption — it's the taxpayer's burden to document that the item left Texas via the repairman's own shipment/delivery, not a customer pickup.

Common questions

Q: Is a repair service for an out-of-state customer always exempt from Texas sales tax?
A: No — it depends on how the repaired item gets back to the customer, not just where the customer is located.

Q: What if I travel to the customer's state to do the repair?
A: Exempt from Texas sales tax.

Q: What if I repair it in Texas but ship or deliver it to the customer out of state myself?
A: Also exempt.

Q: What if the out-of-state customer picks up the repaired item at my Texas location?
A: You must collect Texas state and local tax in that case.

Q: Can I rely on this letter for my own repair business?
A: No. This opinion is based on the facts submitted, and other facts, though similar, may yield different results; it can be relied on only by the taxpayer it was issued to.

Citations and references

No specific statutes or rule numbers were cited in this letter.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/200001958L

Original ruling text

January 7, 2000

Dear **:

Thank you for your letter concerning the taxability of repairs to copiers for
customers located outside of Texas.

If you go to another state and repair a copier, the repair service is exempt
from Texas sales tax. The repair service is also exempt from Texas sales tax
if you repair a copier for an out-of-state customer and the copier is shipped
or delivered by you outside Texas once the repair is completed. However, you
must collect Texas state and local tax when an out-of-state customer picks up
the repaired copier in Texas. Keep the shipment and delivery documents as your
proof the repair service was exempt from Texas tax.

This opinion is based on the facts you submitted. Other facts, though similar,
may yield different results.

You may call me toll free at 1-800-531-5441, ext. 5-0030. The direct line is
512/475-0030. You may also write to Tax Policy, Comptroller of Public
Accounts.

Sincerely,

David Somerville
Tax Policy Division