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Ezel / Tax Rulings / TX
TX 8801L0862G11 Sales and/or Use Tax (State,Local,MTA) 1988-01-27

Did a mortgage company's ownership make otherwise residential property commercial for Texas repair-and-remodeling tax purposes?

Short answer: No. Property meeting the letter's residential definition remained residential regardless of who owned it. The definition included family dwellings, multi-family apartment or housing complexes, nursing homes, condominiums, and retirement homes, but excluded hotels and other hotel-occupancy-tax facilities.

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. It says the opinion may change if the facts differ and cites no statute or rule. STAR's caption mentions foreclosed versus owned property, but the operative body asks only whether ownership by a large mortgage company changes residential classification; this page does not add a foreclosure distinction. Residential-property, hotel-occupancy, repair, remodeling, and institutional-housing definitions 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 STAR documents may no longer represent current policy even when not marked superseded.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

The Comptroller said property remained residential regardless of who owned it if it met the residential definition.

The letter's definition included a family dwelling, multi-family apartment or housing complex, nursing home, condominium, or retirement home. It excluded hotels and other facilities subject to hotel occupancy tax.

What this means for you

Under the historical rule, ownership by a large mortgage company did not convert residential property into commercial property for repair-and-remodeling classification.

Common questions

Did mortgage-company ownership make a home commercial? No.

What properties did the definition include? Family dwellings, multi-family apartment or housing complexes, nursing homes, condominiums, and retirement homes.

What did it exclude? Hotels and other facilities subject to hotel occupancy tax.

Citations and references

The letter quotes a residential-property definition but gives no numbered statute or rule.

Source

Original ruling text

COMPTROLLER PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

January 27, 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.

You ask if repair and remodeling work on residential properties owned by
large mortgage companies is considered commercial or residential.
Residential property is defined as "a family dwelling or a multi-family
apartment of housing complex, nursing homes, condominiums or retirement
homes. The term does not include hotels or any other facilities which
are
subject to the hotel occupancy tax." Any property fitting this
definition
would therefore be considered residential no matter who the owner is.

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
1-800-531-5555 toll free from anywhere in Texas. The regular number is
512/463-4600. You may write me at the Telephone Bank Operations.

Sincerely,
Sharon Herbort
Telephone Bank Operations

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