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Ezel / Tax Rulings / TX
TX 8801L0859A07 Sales and/or Use Tax (State,Local,MTA) 1988-01-28

How did Texas tax wallpaper installation in new construction, additions, existing nonresidential buildings, and residential property?

Short answer: Wallpaper in new construction or a new addition was treated as an improvement to realty. In existing buildings outside finish-out, nonresidential remodeling labor was taxable and residential remodeling labor was nontaxable; wallpaper and other materials were taxable.

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 taxpayer-specific January 1988 Texas Comptroller letter applying a remodeling law change effective January 1, 1988. It says the opinion may change if the facts differ. The letter distinguishes new construction or additions, existing-building work outside finish-out, residential property, nonresidential property, labor, and materials. Wallpaper, finish-out, contractor, residential-property, nonresidential-property, and remodeling rules may have changed; verify current law. STAR documents may no longer represent current policy even when not marked superseded. 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

Installing wallpaper in a newly constructed building or a new addition was an improvement to real property governed by Rule 3.291.

Beginning January 1, 1988, wallpaper installation in an existing building outside finish-out work was remodeling. Nonresidential remodeling labor was taxable, while residential remodeling labor was nontaxable. The wallpaper and other materials were taxable.

What this means for you

The historical result depended on project stage and property type. Materials were taxable even when residential installation labor was not.

Common questions

How was new-construction wallpaper treated? As an improvement to realty under the contractor rule.

Was existing commercial-building installation labor taxable? Yes, when treated as nonresidential remodeling.

Was residential remodeling labor taxable? No.

Were wallpaper and materials taxable? Yes.

Citations and references

  • 34 Tex. Admin. Code Rule 3.291 — historical contractor rule.
  • 34 Tex. Admin. Code Rule 3.357 — historical real-property repair and remodeling rule.

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, TX 78774

January 28, 1988

Dear *:

On behalf of Mr. Bullock, I hope you'll accept my apology for the delay
in
answering your question involving changes in the sales tax law. This
isn't
the way we normally do business.

Our people were, and still are, swamped by a deluge of inquiries as they
attempted to interpret provisions of the new law and draft rules which
would
not adversely impact businesses. In many instances, an answer to a
question
just wasn't available when the question arrived.

Question: Do we charge sales tax when we install wallpaper for a
customer?

Answer: The installation of wallpaper is considered an improvement to
real
property when installed in a newly constructed building or a new addition
to an existing building. See Rule 3.291 for additional information.

On January 1, 1988 the law changed. Installation of wallpaper in
existing
buildings (not as a part of finish-out work) is considered real property
remodeling. Remodeling of non-residential realty is taxable. Remodeling
of
residential property is not taxable. The wallpaper and other materials
are
taxable. See Rule 3.357 Real Property Repair and Remodeling.

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 me at
1-800-252-5555 toll free from anywhere in Texas. The regular number is
512/463-4600. You may write me at Telephone Bank Operations.

Sincerely,
Bonnie Leach
Telephone Bank Operations

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