Was spraying homeowners' pecan trees taxable when some owners sold the harvested nuts?

Plain-English summary

The service provider sprayed pecan trees on homeowners' city lots. Some owners sold the harvested nuts or used them in pastries, while another kept the trees for shade and personal consumption.

The Comptroller treated every described spraying job as a taxable structural pest-control service under Rule 3.356 because the work required a Structural Pest Control Board license. The commercial use of some pecans did not change that answer.

The provider could give suppliers a resale certificate for insecticides and other tangible property transferred to customers as part of the service. It still had to pay tax on equipment used to perform the work, such as spray equipment.

Common questions

Were the jobs involving commercially sold pecans exempt? No.

Could the provider buy transferred insecticide for resale? Yes.

What about the provider's spray equipment? The provider had to pay tax on it.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8907L0948G06

Original ruling text

July 21, 1989

Dear **:

Thank you for your inquiry regarding the taxability of spraying peach and pecan
trees.

You indicate that you spray pecan trees for homeowners located in **.
The homeowners have average to large city lots which contain pecan trees. In
two of the cases that you presented, the homeowner harvests the pecans and uses
them for commercial purposes (that is, they are sold as is or in pastries).
One homeowner claims that he harvests enough nuts to pay his property taxes.
The final homeowner maintains the pecan trees for shade and uses the nuts for
personal consumption.

Your charge to spray the pecan trees in all four cases that you presented are
taxable. Specifically, the services will be taxable as a structural pest
control service as defined in the enclosed Comptroller's Rule 3.356 (Real
Property Service).

In particular, these are services for which a license is required from the
Structural Pest Control Board under Section 2, Texas Structural Pest Control
Act. Therefore, any services that you perform for which this license is
required are taxable.

However, you may issue a resale certificate to your suppliers in lieu of tax on
tangible personal property such as insecticides that are transferred to your
customer in connection with this service. You must pay tax on taxable items
such as spray equipment that you use in performing your service.

This opinion is based on the facts presented. If there are additional or
different facts, the opinion may change.

If you have any questions, please contact Tax Correspondence. You may call toll
free 1-800-252-5555, or our regular number is 512/463-4600. My extension is
3-4662.

Sincerely,

Bob Jeffcoat
Tax Correspondence