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Ezel / Tax Rulings / TX
TX 8412L0622B04 Sales and/or Use Tax (State,Local,MTA) 1984-12-11

Were repairs to built-in heating, cooling, and plumbing equipment taxable in Texas after October 2, 1984?

Short answer: Generally no for equipment wired or plumbed into the realty, such as central heating and air-conditioning units. Repairs to plug-in property, such as a window unit, and associated trip or mileage fees were taxable.

Apply this to your situation

This page answers the general question as of 1984. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1984
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is an official Texas Comptroller of Public Accounts letter published on the State Tax Automated Research (STAR) system. Letters on STAR can be the basis of a detrimental reliance claim only for the taxpayer to whom the letter was directly issued (see 34 Tex. Admin. Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded. Taxpayer-identifying details are redacted. This summary is informational only and is not legal or tax advice. Consult a licensed Texas tax professional about your specific situation.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page) is the authoritative source for any reliance.

Plain-English summary

The Texas Comptroller said repairs, remodeling, restoration, or maintenance of tangible personal property became taxable effective October 2, 1984. Associated trip or mileage fees were also taxable. The same work performed on real property was not taxable.

The letter used how equipment was attached as the practical dividing line. An item wired and plumbed into the realty would probably qualify as an improvement to realty, while an item simply plugged into an outlet would not. Accordingly, labor to repair central air-conditioning and heating units was not taxable, but labor to repair a window unit was taxable.

Painting, wallpaper, and drywall contractors were described as improving real property and therefore unaffected by the change discussed in the letter.

If a homeowner removed a built-in item such as a garbage disposal and took it to the repair shop, the repairer could accept an exemption certificate instead of tax on the labor. The certificate had to state that the item was a permanent improvement to real property.

What this means for you

Repair businesses

The letter distinguished equipment incorporated into the realty from plug-in property. That classification controlled whether repair labor was treated as taxable.

HVAC and plumbing contractors

Central heating and air-conditioning repair labor was nontaxable on the stated facts, while window-unit repair labor was taxable.

Accountants and tax professionals

Related trip and mileage fees followed the taxable personal-property repair. For a removed built-in item, retain an exemption certificate specifically identifying it as a permanent real-property improvement.

Common questions

Q: Was labor to repair central air conditioning taxable?
A: No, according to the letter.

Q: Was labor to repair a window air-conditioning unit taxable?
A: Yes.

Q: Were trip and mileage charges taxable with a taxable repair?
A: Yes.

Q: Could repair labor on a removed built-in garbage disposal be exempt?
A: Yes, if the homeowner signed an exemption certificate stating that the item was a permanent improvement to real property.

Citations and references

  • The letter describes an October 2 effective date for taxing repair, remodeling, restoration, and maintenance of tangible personal property, but it does not identify a statute or rule number.

Source

Original ruling text

December 11, 1984

Dear ***:

Thank you for your recent letter regarding the effect of the new statute
on your membership.

Effective October 2, repairs, remodeling, restoration or maintenance to
tangible personal property became taxable. Associated charges such as
trip or mileage fees would also be taxable. The above functions
performed on real property would not be taxable.

As we discussed, painting, wallpaper and drywall contractors are
improving real property and should not be affected.

Regarding plumbing, heating and cooling repair contracts, if a repaired
item is wired and plumbed into the realty it will probably qualify as an
improvement to realty. Alternately, if it is simply plugged into an
electric outlet it will not qualify. Therefore labor to repair central
air conditioning and heating units would not be taxable. Labor to
repair a window unit would be taxable. Should a homeowner remove a
built-in item such as a garbage disposal and bring it to a member's
business for repair, the repairman may have the homeowner sign an
exemption in lieu of tax on the repair labor. The exemption certificate
should state that the item is a permanent improvement to real property.

I am enclosing a copy of the Law, Pamphlet Supplement and an Exemption
Certificate for your review.

Please feel free to contact us if you have additional questions. You
may call toll free 1-800-252-5555 from anywhere in Texas.

Sincerely,

Tax Policy Section
Tax Administration Division

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