How did Texas tax brick-and-concrete residential mailboxes versus standard mailboxes on wooden posts?

Plain-English summary

Brick-and-concrete residential mailboxes were permanent improvements to real property. Under a separated contract, the business collected tax on the materials' selling price while labor was nontaxable. Under a lump-sum contract, the business paid tax on its materials and did not collect tax on the lump-sum customer charge.

A standard mailbox on a wooden base or post was tangible personal property rather than a permanent improvement. The business collected tax on the mailbox's total sales price, including materials and fabrication labor. A separately stated installation charge was nontaxable.

Common questions

Were brick-and-concrete mailboxes treated as real property? Yes.

How was a lump-sum permanent-mailbox contract taxed? The contractor paid tax on materials; the customer charge was nontaxable.

Was a standard post-mounted mailbox taxable? Yes, including the labor to make it, but separately stated installation was not taxable.

Citations and references

The reproduced letter cites no numbered statute or rule. It says a “Taxes on Labor” brochure was enclosed.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8601L0693B03

Original ruling text

January 9, 1986

Dear **:

Thank you for your recent letter concerning the construction and installation
of residential mail boxes.

The brick and concrete mail boxes can be considered permanent improvements to
real property. If your contract with your customer is separated between
materials and labor, you should collect sales tax on the selling price of the
materials. The labor is not taxable. If you operate under a lump-sum contract,
you are the consumer of materials used to perform the contract and you are
required to pay sales tax on the materials. The lump-sum charge to your
customers is not taxable.

A standard mail box on top of a wooden base or post is not a permanent
improvement to real property. You should collect sales tax on the sales price
of the mail box (material and labor to make the mailbox) from your customer. A
separately stated charge to install the mail box is not taxable.

I have enclosed the "Taxes on Labor" brochure for your reference.

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

Please feel free to contact me if you have additional questions. You may write
me, call toll free 1-800-252-5555 from anywhere in Texas or phone 512/463-4600.

Sincerely,

Julie Pesl
Tax Policy Section
Tax Administration Division