Which repair, appliance, assembly, crating, and packing charges to moving companies were taxable in Texas?

Plain-English summary

Repairing an item was taxable even if the item had been damaged during an interstate move or the carrier was licensed by the Interstate Commerce Commission. The letter said neither fact exempted the repair.

By contrast, listed labor services billed to local agents of national moving companies licensed by the Interstate Commerce Commission, the Texas Railroad Commission, or both were nontaxable. The examples were connecting or disconnecting major appliances, assembling or disassembling household goods, custom crating, and packaging valuables. The service provider still had to pay tax on materials and supplies used to perform those services.

The provider also had to collect the city tax for the place where a repair was performed, in addition to the MTA tax it had already been collecting.

Common questions

Did interstate-move damage make a repair exempt? No.

Were the listed labor services to licensed moving-company agents taxable? No.

Could the provider buy service materials tax-free? No. The letter required payment of tax on all materials and supplies used in the nontaxable labor services.

Citations and references

• Texas Comptroller Rule 3.292 — cited for the taxation of repair services.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8602L0699C07

Original ruling text

February 20, 1986

Dear ***:

Thank you for your letter of February 10, 1986, concerning your sales tax
responsibilities.

You have been correctly collecting and reporting sales tax in regard to
your established business. The fact that the repaired item was damaged during
an interstate move or the fact that the carrier is licensed by the
interstate Commerce Commission (ICC) does not cause the repair to be exempt.

Labor services (charges to connect/disconnect major appliances,
assembly/disassembly of household goods, custom crating and packaging
of valuables, etc.) billed to local agents of national moving companies
licensed by either or both, the ICC and the Texas Railroad Commission are
not taxable. You are required to pay tax on all materials and supplies used
in providing these services.

The tax consequences differ for the two aspects of your business in that
repair services are specifically taxed under the sales tax law and Rule
3.292. Movers which are licensed by the ICC or the Railroad Commission
are not provided an exemption for repairs on damaged items.

You are also required to collect and report city tax in which the repair
is made just as you have been collecting MTA tax.

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