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Ezel / Tax Rulings / TX
TX 8802L0863F06 Sales and/or Use Tax (State,Local,MTA) 1988-02-05

Were sod installation, retaining-wall work, and landscape design or engineering taxable under Texas's 1988 rules?

Short answer: Sod-installation labor was taxable for new and existing homes. Residential retaining-wall work and new nonresidential walls were contractor work; repair or remodeling of nonresidential walls was taxable. Design and engineering services were nontaxable.

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 February 1988 Texas Comptroller letter applying real-property-service and contractor rules then in effect. It says the opinion may change if the facts differ. STAR's caption also names plants and seedbed spreading, but the operative body decides only sod installation, retaining walls, and design or engineering; this page does not classify the caption-only activities. Landscaping, contractor, residential-property, repair, 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 STAR documents may no longer represent current policy even when not marked superseded.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

Labor to install grass sod on the lawns of either new or existing homes was taxable as a real-property service under Rule 3.356, effective October 1, 1987.

The Comptroller treated retaining-wall work as follows:

  • installing or repairing retaining walls on residential property was contractor work;
  • installing a new retaining wall on nonresidential property was contractor work under Rules 3.291 and 3.347; and
  • repairing or remodeling a retaining wall on nonresidential property carried taxable labor beginning January 1, 1988 under Rule 3.357.

Design and engineering services were not taxable.

What this means for you

The historical tax result depended on the type of work and whether the property was residential or nonresidential. The letter does not address plants or seedbed spreading despite STAR's caption.

Common questions

Was sod-installation labor taxable? Yes, for both new and existing home lawns.

Was residential retaining-wall work treated as taxable repair labor? No; the letter treated the business as a contractor.

Was nonresidential retaining-wall repair labor taxable? Yes, beginning January 1, 1988.

Were design and engineering services taxable? No.

Citations and references

  • 34 Tex. Admin. Code Rule 3.356 — historical real-property services rule.
  • 34 Tex. Admin. Code Rules 3.291 and 3.347 — historical contractor rules.
  • 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, TEXAS 78774

February 5, 1988

Dear *****:

Thank you for your question regarding the taxability of your business.

Labor charges for installation of grass sod, whether on the lawns of new
or existing homes, are taxable as charges for real property services.
All
charges for real property services became taxable as of October 1, 1987.
See Rule 3.356, copy enclosed.

When you install or repair retaining walls on residential property, or
install new retaining walls on non-residential property, you are acting
as
a contractor. I have enclosed copies of Rules 3.291 and 3.347 explaining
the tax responsibilities of contractors.

When you repair or remodel retaining walls on non-residential property,
you are acting as a repairer or remodeler of real property, and your
labor
charges are taxable as of January 1, 1988. See Rule 3.357, copy
enclosed.

Design and engineering services are not taxable.

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 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,
Tom Soto
Tax Policy Division

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