Does an independent contractor who performs state-required accessibility (TAS) plan reviews and inspections on buildings, and also does related consulting, owe Texas sales tax or need a sales tax permit?

Plain-English summary

Someone starting a business as an Independent Contract Provider with the Texas Department of Licensing and Regulation (TDLR) asked whether they'd need a tax ID/employer ID number. Their work has two parts: (1) state-required plan reviews and inspections to certify that buildings comply with the Texas Accessibility Standards (TAS), paid for by the building owner or architect (with a separate filing fee paid to TDLR for each project), and (2) some general consulting work.

The Comptroller confirmed no sales tax applies to either activity as described. The TAS review and inspection fee isn't taxable. Consultation services are also not taxable, so long as they're the consultant's own expert or professional opinions and aren't tied to selling a taxable service or item of tangible personal property. Because none of the work is taxable, a sales tax permit isn't required — a permit is only needed once someone starts selling taxable services or tangible personal property.

What this means for you

Accessibility consultants and building inspectors

Performing TAS (or similar regulatory) compliance reviews and inspections for a fee doesn't create Texas sales tax exposure, and pure advisory/consulting work is likewise untaxed as long as it stands alone and isn't bundled with selling a taxable product or service.

Independent contractors working with state licensing agencies (TDLR and similar)

You generally don't need a Texas sales tax permit just to perform inspection, certification, or consulting services — the trigger for needing a permit is selling something taxable, not simply being in business or being licensed by a state agency.

Accountants and tax professionals

Watch the boundary in this letter: consulting is exempt specifically because it isn't "related to sale of taxable services or personal property." If a client's consulting work later gets bundled with selling taxable items (e.g., recommending and then supplying accessibility hardware), that combination could change the analysis.

Common questions

Q: Is a fee for inspecting a building's accessibility compliance taxable in Texas?
A: No. This letter confirms no sales tax applies to a review/inspection fee charged to determine compliance with the Texas Accessibility Standards.

Q: Are consulting fees taxable?
A: Not when they represent the consultant's own expert or professional opinions and aren't connected to selling a taxable service or tangible personal property.

Q: Do I need a Texas sales tax permit for this kind of work?
A: Not unless you're selling taxable services or tangible personal property. Providing only inspection, certification, and non-product consulting services as described here doesn't require a permit.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/200006419L

Original ruling text

June 12, 2000

From: Emilio Lerma

To:

Subject: Do I need a tax ID#/Employer ID#?

Dear **:

Thank you for your e-mail regarding the taxability of plan reviews inspections,
and consultation services.

There is no sales tax on your review and inspection fee to determine compliance
with the Texas Accessibility Standards (TAS). Consultation services that are
the expert or professional opinions of the consultant are not taxable if they
are not related to sale of taxable services or personal property. You are not
required to obtain a sales tax permit unless you are selling taxable services
or tangible personal property.

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

If you have any questions or require additional information, you may call
1-800-531-5441, extension 6-5809. You may write to Tax Policy Division, P. O.
Box 13825, Austin, Texas 78711-3825. You may also submit inquiries to our tax
help Internet address at .

Sincerely

Emilio S. Lerma
Tax Policy Division

On Tue, 6 Jun 2000 14:27:48 ** wrote:

I am starting a business as an Independent Contract Provider with the Texas
Department of Licensing and Regulation (TDLR). I will be performing State
required plan reviews and inspections for compliance with Texas Accessibility
Standards (TAS) and I will also be doing some consulting. After speaking with
someone at your office I understand that if no product is involved in the
consulting portion of my business I will not need a tax ID#. However, they
suggested I send an email regarding the specific nature of the Plan
Review/Inspection side of the business.

I am under contract by the State to do State required TAS reviews/inspections.
I will receive a fee for these reviews/inspections (paid by the building
owner/architect) and there is also a filing fee that I pay to TDLR for each
project I review/inspect. TDLR handles all enforcement matters. I have never
heard of other independent contract providers needing a tax ID# but was advised
to contact your office just to be sure.

Thank you