Were roof investigation, bid-document review, re-roof document preparation, and litigation reports taxable Texas information services?

Plain-English summary

The Comptroller said the described roof consulting was not taxable as an information service. The work included investigating roofs, preparing new-roof or re-roof documents, reporting on an existing roof's condition, reviewing proposed bid documents for architects and engineers, and doing investigation and reporting for attorneys in litigation.

That did not end the analysis. The letter warned that some work might instead be taxable as an insurance loss or damage appraisal or an insurance inspection under Rule 3.355(a)(1) and (2).

What this means for you

The label “roof consultant” did not control. The historical classification depended on the actual purpose of the engagement, especially whether the work served an insurer as an appraisal or inspection.

Common questions

Was the described work taxable as an information service? No.

Did the letter rule that every roof-consulting job was nontaxable? No. It expressly raised potentially taxable insurance services.

Which insurance activities did it identify? Insurance loss or damage appraisal and insurance inspection.

Citations and references

• 34 Tex. Admin. Code Rule 3.355(a)(1) — insurance loss or damage appraisal.
• 34 Tex. Admin. Code Rule 3.355(a)(2) — insurance inspection.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8802L0859C01

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

February 2, 1988

Dear ****:

On behalf of Mr. Bullock, I hope you will accept my apology for the delay
in
answering your question concerning 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.

According to your letter, you do consulting work on roofs. Your services
include investigating and preparing new or re-roof documents for property
owners; investigating and reporting findings on the condition of an
existing
roof or reviewing proposed bid documents for architects and engineers;
and
conducting discovery work and report on investigation findings to
attorneys in the course of litigation.

Your consulting work is not taxable as an information service. However,
you
may be performing taxable insurance services. Please refer to Rule
3.355(a)(1) (insurance loss or damage appraisal) and (a)(2) (insurance
inspection).

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 1-800-531-5441 or phone 512/463-4600.

Sincerely,
Jo Ann Dieck
Tax Policy Division