Is a 'bead blasting' service that removes stubborn scale build-up from swimming pool tile ordinary nontaxable pool cleaning/maintenance, or taxable real property restoration -- and does the answer change for a residential vs. a commercial pool?

Plain-English summary

A company offers a "bead blasting" service to strip stubborn scale build-up off swimming pool tile: microscopic glass beads are sprayed at the tile by a diesel-powered air compressor (similar to power washing) to remove scaling and stains, after which a sealant is applied to help prevent future buildup. It costs around $1,500 for a residential pool, billed as one lump sum, and the taxpayer wasn't charging sales tax on it (though it did pay tax on its own equipment and supplies). The taxpayer argued this goes well beyond routine pool cleaning — it's pricier, it removes scaling regular cleaning can't touch, it's not done on a set schedule, and it's performed as an alternative to fully replacing the tile.

The Comptroller agreed the service is more than routine cleaning. Texas's real-property-services rule (3.356) does list "pool cleaning and maintenance" as a nontaxable cleaning/janitorial service — but the Comptroller leaned on a 2004 decision involving a similar "acid-wash" service for pool plaster stains, which held that an unusually expensive, last-resort service that substitutes for repainting/replacement (rather than everyday upkeep) is restoration under Rule 3.357, not routine cleaning. The bead-blasting service here fit that same mold, so it's restoration too.

Classifying it as restoration doesn't mean it's automatically taxable — the answer splits by property type:

• Residential pools: The taxpayer counts as a "contractor" under Rule 3.291. A lump-sum charge for real property repair/restoration on a residence is NOT taxable — but the taxpayer itself owes sales/use tax on all the materials and supplies (beads, equipment, sealant) it uses to perform the job.
• Nonresidential pools (e.g., at an apartment complex, hotel, or commercial property): The ENTIRE charge to the customer is taxable under Rule 3.357(b), and the taxpayer separately owes tax on its own consumables used to perform the work.

What this means for you

Pool service companies offering deep-restoration services

If your service goes beyond the routine "pool cleaning and maintenance" bucket — notably more expensive, done only as needed rather than on a schedule, and substituting for a bigger repair or replacement — expect it to be classified as restoration, not cleaning. That classification then turns your tax obligations on whether the property is residential or not, so track that distinction carefully.

Property managers and commercial pool owners

Deep restorative pool services (tile descaling, acid-washing, similar last-resort treatments) on a commercial/nonresidential pool are fully taxable to you as the customer — budget for sales tax on the entire invoice, unlike routine pool cleaning and maintenance contracts.

Homeowners and residential pool owners

A lump-sum charge for this kind of restoration work on your home pool shouldn't include sales tax to you — the contractor instead pays tax on its own materials and equipment.

Common questions

Q: Is "pool cleaning and maintenance" always nontaxable in Texas?
A: Routine pool cleaning and maintenance is a nontaxable real property service under Rule 3.356 — but per this ruling, a service that's unusually expensive, done only as needed (not on a schedule), and substitutes for a bigger repair/replacement crosses over into taxable "restoration" instead.

Q: Does it matter whether the pool is residential or commercial?
A: Yes, per this ruling — once a service is classified as restoration, a lump-sum charge on a RESIDENTIAL pool isn't taxable to the customer (the contractor pays tax on its own materials), while the ENTIRE charge on a NONRESIDENTIAL pool is taxable.

Q: Does "bead blasting" have to be identical to the acid-wash service from the 2004 decision to get the same result?
A: No — per this ruling, the Comptroller found bead blasting "similar in nature" to the cited acid-wash decision and applied it "in the same manner," without requiring an identical process.

Citations and references

Statutes and rules:

• Tex. Tax Code § 151.0047 (Real Property Repair and Remodeling — excludes residential structures from taxable "repair and remodeling")
• Tex. Tax Code § 151.0048 (Real Property Services)
• 34 Tex. Admin. Code Rule 3.291 (Contractors — lump-sum charges on residential real property not taxable)
• 34 Tex. Admin. Code Rule 3.356(a)(7) (building/grounds cleaning, janitorial, custodial services, including "pool cleaning and maintenance")
• 34 Tex. Admin. Code Rule 3.357(a)(14) (definition of "restoration")
• 34 Tex. Admin. Code Rule 3.357(b) (nonresidential real property restoration — entire charge taxable)

Cited prior guidance:

• Comptroller's Decision No. 43,986 (2004) — an "acid-wash" service removing swimming pool plaster stains held to be restoration, not routine cleaning, because it substituted for repainting, cost significantly more than regular maintenance, and was performed only as a last resort

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/201504051L

Original ruling text

April 21, 2015

Re: Private Letter Ruling #150890384

Dear *****:

We issue this private letter ruling in accordance with Rule 3.1 in response to
your request dated March 27, 2015. Detrimental reliance is provided in
accordance with Rule 3.10, the Taxpayer Bill of Rights.

You requested guidance relating to the swimming pool tile and restoration
services provided by ***** (Taxpayer). We issue this private letter
ruling because the statutes, rules, and other applicable authorities regarding
real property services and real property repair and remodeling are not
sufficiently clear to provide guidance with respect to the proper application
of Tax Code Section 151.0047 (Real Property Repair and Remodeling) and Tax Code
Section 151.0048 (Real Property Services) to Taxpayer’s services.

RELEVANT FACTS

Taxpayer provides a service to remove scale build-up from tile surfaces in
swimming pools. Taxpayer describes its service as a “bead blasting” process.

Glass beads are “blasted” at tile to remove scaling in a process similar to
power washing. Microscopic glass beads are sprayed or “blasted” at surfaces by
a diesel powered air compressor in order to remove scaling and stains. After
the build-up is removed, Taxpayer applies a sealant to help prevent future
scaling.

The charge for this service is approximately $1,500 for a residential swimming
pool. The service is billed as a lump-sum charge. Taxpayer does not collect
tax on its charges for the service. Taxpayer pays tax on its equipment and
supplies.

Taxpayer contends its service goes beyond routine swimming pool cleaning. The
service is significantly more expensive and eliminates scaling that cannot be
removed with regular cleaning. The service is not performed on a regular basis
and is performed instead of replacing the tile completely.

RULING AND ANALYSIS

Taxpayer’s service could fall under several definitions in the Tax Code
(specifically Section 151.0047 Real Property Repair and Remodeling and 151.0048
Real Property Services) and Comptroller rules (specifically Rule 3.291
Contractors, Rule 3.356 Real Property Services, and Rule 3.357 Nonresidential
Real Property Repair, Remodeling, and Restoration; Real Property Maintenance).

Tax Code Section 151.0047(a) defines “real property repair and remodeling” as
(in relevant part):

(a) "Real property repair and remodeling" means the repair, restoration,
remodeling, or modification of an improvement to real property other than:

(1) a structure or separate part of a structure used as a residence;

(2) an improvement immediately adjacent to a structure described by
Subdivision (1) of this section and used in the residential occupancy of the
structure or separate part of the structure by the person using the structure
or part as a residence;

The term “restoration” is not defined in the Tax Code, but is defined in Rule
3.357(a)(14) as:

(14) Restoration--An activity that is performed to bring back real property
that is still operational and functional but that has faded, declined, or
deteriorated, as near as possible to its original condition. Minor restorative
work that is performed within the meaning of paragraph (7) of this subsection
is maintenance, not restoration.

Taxpayer refers to the scaling on tiles as “deterioration” and contends that
its service is necessary to “restore” the tile. According to Taxpayer, this
restoration cannot be achieved through regular cleaning or routine maintenance.

Tax Code 151.0048 provides a list of services that are defined as “real
property service.” Rule 3.356(a)(7) defines “residential or nonresidential
building or grounds cleaning, janitorial or custodial services” as:

(7) Residential or nonresidential building or grounds cleaning, janitorial, or
custodial services--The activities of keeping the inside and outside premises
of a building clean, orderly, and functional, including performing minor
adjustments, maintenance, or repairs. Examples include, but are not limited to:
window washing; floor, wall, and ceiling cleaning; collection of waste on the
premises, whether from inside a building or on the grounds; chimney or duct
cleaning; lighting maintenance, such as bulb and fuse replacement; the
cleaning, disinfecting, and restocking of restrooms or lounge areas; cleaning
or washing sidewalks, parking garages, or parking lots; and pool cleaning and
maintenance. The term does not include activities such as painting;
wallpapering; or performing significant repairs; nor domestic services such as
those of a baby-sitter, maid or cook employed by a private household to provide
domestic services for the benefit of the household.

This definition specifically refers to “pool cleaning and maintenance” as a
real property service.

Comptroller’s Decision No. 43,986 (2004) addressed the taxability of an
“acid-wash” service to remove stains from swimming pool plaster. The
Comptroller found that the acid-wash service was a substitute for repainting
plaster and was not routine cleaning. The service was significantly more
expensive than routine cleaning or regular maintenance and was only performed
as a last resort. The service was, therefore, the repair or restoration of
real property under Rule 3.357.

Although the “bead blasting” service is not identical, Taxpayer’s service is
similar in nature and the decision should apply in the same manner. The
service provided by Taxpayer involves more than routine cleaning or maintenance
as described in Rule 3.356. Taxpayer’s service falls under the definition of
restoration under Rule 3.357.

Taxpayer is a contractor under Rule 3.291 when the service is performed on
residential real property. A lump-sum charge for the service is not taxable
pursuant to Rule 3.291(b)(3). Under a lump-sum contract, Taxpayer is
responsible for sales and use tax on all items purchased for use in performance
of the service pursuant to Rule 3.291(b)(2).

The entire charge for the service is taxable when performed on nonresidential
real property pursuant to Rule 3.357(b). Taxpayer is responsible for sales and
use tax on all consumables purchased for use in performance of the service
pursuant to Rule 3.357(b)(4).

This determination is based only on the information presented. Other
information, though similar, may provide a different result.

If you have questions about this private letter ruling, please email us at
https://www.window.state.tx.us/taxhelp/ and reference Private Letter Ruling

150890384.

Regards,

Tax Policy Division