Can a company that manages and coordinates real property surveys for its customers buy the underlying surveying services tax-free for resale, and does it matter that the company itself isn't a licensed surveyor?

Plain-English summary

This letter is a rebuttal to a taxpayer disputing an earlier Comptroller ruling (referenced as STAR 9911849L) that its client — a company managing and coordinating real property surveys for customers — was buying surveying services for resale, making the client's total charge to customers taxable. The taxpayer's representative argued the client shouldn't be treated as reselling surveying because (1) the client isn't a licensed surveyor, and (2) the client doesn't literally resell the survey "as a part of a taxable service performed by" the client.

The Comptroller rejected both arguments and reaffirmed the earlier ruling. On licensing: Tex. Tax Code § 151.0048(6) defines real property surveying as a real property service, § 151.0101(a)(11) makes real property services taxable, and § 151.0101(b) gives the Comptroller exclusive jurisdiction to interpret what counts as a taxable service — none of which requires the person performing the survey to hold a surveyor's license. The letter contrasts this with security services (which the Legislature explicitly tied to a licensing statute) and notes that even insurance claims adjusters and forensic engineers have been found to provide taxable services regardless of licensing status, citing Attorney General Opinion JM-1016 (1989) and Comptroller Hearing 32,613 (1995), where unlicensed registered nurses assessing claimants for an insurance company were found to be providing taxable insurance claims adjustment/processing services.

The letter also cites Stoker Management, Inc. v. Sharp, 958 S.W.2d 286 (1997), where the Court of Civil Appeals held that a company coordinating janitorial services performed by its franchisees was still a "seller" liable for collecting sales tax under Tex. Tax Code § 151.008, even though the actual cleaning was done by others — rejecting an argument (based on §§ 151.005(3) and 151.006) similar to the taxpayer's here. The Comptroller asked for a copy of the client's customer contract, noting that if the contract requires the client to perform (i.e., arrange/provide) real property surveys, the full contract amount — including the client's own fees — is subject to sales tax.

What this means for you

Companies managing or coordinating real property services for customers

If your business arranges for a taxable real property service (surveying, and by the same reasoning likely other real property services) to be performed for your customers — even if you subcontract the actual work and aren't personally licensed to perform it — your full charge to the customer is generally taxable. You're treated as buying the service for resale and reselling it, not as providing a separate nontaxable coordination/management service.

Businesses relying on a "not licensed, so not really reselling" argument

This letter forecloses that argument for real property surveying specifically, and cites parallel precedent (insurance claims adjusting, janitorial coordination) where licensing status didn't change the taxability analysis. Don't assume lack of a professional license changes your sales tax collection obligation.

Accountants and tax professionals

Note the layered citation chain here: statutory basis (§ 151.0048(6), § 151.0101(a)(11)/(b)), rule definition (Rule 3.356(a)(9)), an Attorney General opinion (JM-1016), an administrative hearing (32,613), and a Court of Civil Appeals decision (Stoker Management) — useful precedents for any "we're just coordinating, not performing/reselling the taxable service" argument. The Comptroller's request for the underlying customer contract also signals that the actual contractual scope of work (not just how the company internally categorizes its business) controls the tax outcome.

Common questions

Q: If my company isn't a licensed surveyor, can I still be treated as reselling surveying services?
A: Yes. Texas law doesn't require a person performing real property surveys to be a licensed surveyor for the sales tax resale analysis to apply — the Comptroller confirmed licensing status doesn't change the outcome.

Q: Does coordinating or managing a real property service (rather than personally performing it) avoid sales tax?
A: Generally no. If your contract with the customer requires you to provide the real property service (even through subcontractors), your full charge — including your own coordination fee — is subject to sales tax.

Q: What does the janitorial-services case have to do with real property surveying?
A: The Comptroller cited Stoker Management, Inc. v. Sharp as parallel precedent: a company that contracted to provide janitorial services but had franchisees perform the actual cleaning was still a taxable "seller," rejecting a similar "I didn't personally perform it" argument.

Q: Can I rely on this letter for my own coordination/management business?
A: No. This opinion is based on the facts presented; additional or different facts may change the opinion.

Citations and references

Statutes:

• Tex. Tax Code § 151.0048(6) (real property services include surveying)
• Tex. Tax Code § 151.0101(a)(11) (real property services are taxable services)
• Tex. Tax Code § 151.0101(b) (Comptroller's exclusive interpretive jurisdiction)
• Tex. Tax Code § 111.016 (seller liability for tax collection)
• Tex. Tax Code § 151.008 (definition of "seller")
• Tex. Tax Code §§ 151.005(3), 151.006 (raised by the taxpayer; rejected by the Comptroller)

Rules:

• 34 TAC Rule 3.356(a)(9) (definition of real property surveying)

Other authority:

• Attorney General Opinion JM-1016 (1989) (forensic engineer's services taxable as insurance investigation)
• Comptroller Hearing 32,613 (1995) (unlicensed nurses' insurance claims assessment work was taxable)
• Stoker Management, Inc. v. Sharp, 958 S.W.2d 286 (Tex. App. 1997) (coordinator of subcontracted janitorial services was a taxable "seller")

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/200005543L

Original ruling text

May 8, 2000

Dear **:

Your recent letter requesting a taxability ruling on management and
coordination of real property surveys provided by your client was assigned to
me for response.

Kevin Koller responded to four letters from you on this matter (STAR 9911849L).
He advised you that your client was buying surveying services for resale and that
the total amount your client charges its customers is taxable. You disagree.

The basis for your disagreement is based on two premises. The first is that
your client is not a licensed surveyor and second, it is not possible for your
client to buy surveying services for resale because your client does not resell
the surveying as a part of a taxable service performed by your client.

A review of the previous correspondences on this matter does not give me any
reason to reverse or change the earlier opinion that your client is buying and
reselling surveying services.

Texas Tax Code Sections 151.0048(6) defines a real property service to include
the surveying of real property. Texas Tax Code Section 151.0101(a)(11) defines
taxable services to include real property services. Texas Tax Code Section
151.0101(b) gives the comptroller exclusive jurisdiction to interpret what
constitutes a taxable service. The comptroller's duly promulgated Rule
3.356(a)(9) concerning real property services defines real property surveying.

The Legislature defined a "security service" as a service for which a license
is required under Section 13, Private investigators and Private Security
Agencies Act (Article 4413(29bb) Vernon's Civil Statutes). In the area of real
property surveying, the Legislature did not require persons performing
insurance services to be licensed. The Legislature also defined structural pest
control service as a service covered by Section 2, Texas Structural Pest
Control Act (Article 135b-6, Vernon's Texas Civil Statutes).

Persons who adjust or investigate losses on behalf of an insurer are required
to be licensed under the Texas Insurance Code. However, in Attorney General
Opinion JM-1016 (1989), the attorney general ruled that the services performed
by a forensic engineer were taxable as an insurance investigation.

In Hearing 32,613 (1995), Petitioner's employees (registered nurses) meet with
a catastrophically injured or ill person ("client") to assess his or her
medical condition. The employee met with the client on one or more occasions.
The employee also met with the professional medical providers working with the
client.

The employee assessed the care needed by the client and made a recommendation
to claimant's insurance company regarding the diagnosis and prognosis relating
to the "claimant's" medical condition. The employee also made recommendations
regarding future treatment to its client in a written report. The report could
list or compare the costs of using different types of treatment plans.

The employee did not provide medical care services to the client. The client's
participation in Petitioner's services was voluntary. The comptroller held that
Petitioner's services were taxable insurance claims adjustment or insurance
claims processing. The comptroller made this determination even though
Petitioner's employees were not licensed as insurance adjusters under the Texas
Insurance Code.

The Texas Tax Code does not require a person performing insurance claims
adjusting to be licensed as an insurance adjuster, nor does it require a person
performing real property surveys to be a licensed surveyor.

While not exactly analogous to your argument, the Court of Civil Appeals
affirmed a summary judgement rendered by the trial court in a case brought
under Texas Tax Code Section 111.016. Stoker Management, Inc. (Stoker) argued
that it was not liable for sales tax collected on the janitorial services
performed by others (its franchisees) because only a seller as defined under
Texas Tax Code Section 151.008 is liable for the collection of sales tax.
Stoker contracted with building owners to perform janitorial services. Stoker
then had franchisees under contract to perform the actual janitorial services.
Stoker collected payment for the janitorial services performed by the
franchisee along with the sales tax from the building owner. The court
concluded that even if Stoker's argument was correct the Section 111.016 only
applied to sellers, the record indicated Stoker was a seller. Stoker
Management, Inc. v. Sharp, 958 S.W. 2d 286 (1997).

The court could not have rendered this decision if it relied on the arguments
you set forth concerning Texas Tax Code Sections 151.005(3) and 151.006.

Please send a copy of the contract your client enters with its customers. The
contract should specify what services your client is required to provide.
Again, if the contracts require your client to perform real property surveys,
that is what is being contracted for. The contract amount would be subject to
sales tax, including your client's fees.

This opinion is based on the facts presented. If there are additional or
different facts, the opinion may change.

You may call me toll free at 1-800-531-5441, extension 3-4683, if you have any
questions or need more information. You may write to Tax Policy Division, P.O.
Box 13528, Austin, Texas 78721-3825.

Sincerely,

Eddie C. Washington
Tax Policy Division

c: Kevin Koller