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Ezel / Tax Rulings / TX
TX 8801L0853G14 Sales and/or Use Tax (State,Local,MTA) 1988-01-14

Was an alarm company's building prewiring taxable when performed as part of installing a permanent burglar-alarm system?

Short answer: Yes. The total alarm-system charge, including prewiring, was taxable as a security service, and future system-maintenance charges were also taxable. The specific security-service tax controlled over the general real-property labor exemption.

Apply this to your situation

This page answers the general question as of 1988. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1988
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 a January 1988 Texas Comptroller guidance letter about an alarm-system company's work; it does not include the usual fact-change caveat or cite a statute or rule. STAR's caption mentions building-only prewiring and licensing requirements, but the operative body decides only prewiring performed as part of a permanent alarm-system installation and later maintenance; this page does not infer the caption-only issues. Security-service, alarm, prewiring, real-property, maintenance, and licensing rules may have changed; verify current law. STAR documents may no longer represent current policy even when not marked superseded. The requester is 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

An alarm-system company wired a building for a burglar-alarm system while the general contractor constructed the building. The finished system would be a permanent improvement to realty.

Even so, the total charge, including prewiring, was taxable as a security service. Future maintenance charges on the system were also taxable.

The Comptroller said the specific law taxing security services took precedence over the general provision exempting labor to improve real property.

What this means for you

The historical classification followed the specific security-service provision rather than the physical permanence of the system.

Common questions

Was the prewiring taxable? Yes, as part of the total security-service charge.

Did permanent attachment to the building make the labor exempt? No.

Was later maintenance taxable? Yes.

Citations and references

The letter cites no numbered statute or rule.

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

BOB BULLOCK
COMPTROLLER January 14, 1988

Dear ****:

Recently I was asked about the taxability of labor done by an alarm
system's company to wire a building for a burglar alarm system. The wiring was
being done for the general contractor who was constructing the building. The
system was being installed in such a way that it would clearly be a permanent
improvement to realty.

The total charge including prewiring the building, is taxable as a
security service. Any charges by the alarm system's company for future
maintenance of the system will also be taxable.

The specific provision in the law taxing security services takes
precedence over the more general provision exempting labor to improve real
property.

I would appreciate your passing this information along to your customers.

If you have any questions or need more information, please call our
toll-free number
1-800-531-5441. The regular number is 512/463-4600. You may write me at
the Tax Policy Division.

Sincerely,
Al Van Allen
Tax Policy Division

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