TX 8509L0667A12 Sales and/or Use Tax (State,Local,MTA) 1985-09-25

Was a separately stated handling charge connected with a taxable repair service subject to Texas sales tax?

Short answer: Yes. The Comptroller confirmed that handling charges connected with a taxable repair service were taxable to the customer.

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This page answers the general question as of 1985. Ezel answers yours, under current Texas tax law, with citations.

Disclaimer: This is an official 1985 Texas Comptroller taxpayer-response letter based on separately stated parts, labor, and handling charges for repairs of tangible personal property taxable under then-current Tax Code § 151.0101(5). STAR's caption identifies an October 1, 1987 endpoint, but the reproduced body does not explain or establish it. The letter expressly says different facts could change the opinion. Current repair, handling, invoice, service, and sales-tax rules may differ, and STAR documents may no longer represent current policy even when not marked superseded. Letters on STAR can support detrimental reliance only for the taxpayer to whom the letter was directly issued under 34 Tex. Admin. Code Rules 3.1 and 3.10. Taxpayer-identifying details are redacted. This summary is informational only and is not legal or tax advice.

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 business repaired taxable tangible personal property and separately listed parts, labor, and handling charges on its invoices. It had been taxing all three categories since October 2, 1984.

The Comptroller confirmed that handling charges connected with a taxable service were taxable to the customer.

Common questions

Was the handling charge taxable? Yes.

Did separate statement make it nontaxable? No.

Did the reproduced body explain the caption's October 1, 1987 endpoint? No.

Citations and references

Tex. Tax Code § 151.0101(5) — taxable-property definition identified in the request.

Source

STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
Opinion: https://star.comptroller.texas.gov/view/8509L0667A12

Original ruling text

September 25, 1985

Dear ***:

Thank you for your recent letter which is restated with response below.

A part of CORP ABC's activities in the State of Texas includes the
repairing of tangible personal property for a fee. The property
being repaired fits the definition of that which would be taxable
under section 151.0101(5) of Title 2. The invoice for these repairs
is typically, segregated into three categories (parts, labor and
handling charges). It has been our opinion that all three categories
are taxable for sales tax purposes since October 2nd of 1984, and we
have taxed our customers accordingly.

A number of our customers have questioned the taxability of handling
charges as a taxable service and several have threatened lawsuits.
We therefore request that you address the taxability of this category,
and advise us accordingly.

Response: You are correct, handling charges connected with a taxable
service are taxable to your customers.

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

If you have any questions or need more information, please call us at
1-800-252-5555 toll free from anywhere in Texas. You may write us at the
Tax Administration Division.

Sincerely,

Tax Policy Section
Tax Administration Division

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