Is a charge for running personal errands, like grocery shopping, picking up dry cleaning, or dropping off shoes for repair, subject to Texas sales tax?

Plain-English summary

A personal errand-running business asked the Comptroller whether its services were subject to Texas sales tax. According to the brochure the company submitted, it offered personal services like shopping, party planning, picking up dry cleaning, and taking shoes to a repair shop, charging a set hourly rate for these tasks.

The Comptroller ruled that a charge for running errands is not taxable. Examples given include shopping at a grocery store, picking up cleaning, taking shoes to the repair shop, or picking up tickets for an event -- the fee for performing these tasks on someone else's behalf is not subject to sales tax. That said, the customer still owes sales tax on any taxable items or services purchased along the way, such as the taxable goods bought at the grocery store, the dry cleaner's charge, the shoe repair shop's charge, or the price of an amusement ticket.

The letter also flags a limit on this treatment: if the company is actually providing a taxable service itself, or selling taxable items directly, like house cleaning, catering, or flowers, then the company would have to collect sales tax on those charges (the hourly fee for house cleaning, or the sales price of the catering or flowers). The distinction turns on whether the company is merely running an errand to acquire something from a third party, versus itself performing a taxable service or making a taxable sale.

As with all STAR letters, the Comptroller noted this opinion is based on the facts presented and could change if the facts were different.

What this means for you

Errand and personal concierge service businesses

If you charge customers an hourly or flat fee purely for running errands on their behalf (shopping, dropping off/picking up items, standing in line for tickets), that fee itself is not subject to Texas sales tax. Keep your invoices structured to clearly separate your errand-running fee from any taxable goods or services the customer is also being charged for.

Business owners who also sell taxable goods or services

If your errand or concierge business expands into directly providing taxable services (such as house cleaning) or selling taxable goods (such as flowers or catered food), sales tax must be collected on those specific charges, even if you also offer nontaxable errand services under the same business.

Accountants and tax professionals

When advising clients in the personal-service/concierge space, evaluate each line of business separately: pure errand-running (nontaxable) versus direct provision of taxable services or sale of taxable goods (taxable). Also remind clients that the underlying taxable purchases made during an errand (groceries, dry cleaning, amusement tickets) still carry sales tax charged by the original seller, regardless of how the errand fee itself is treated.

Common questions

Q: Is the hourly fee an errand service charges its customers subject to Texas sales tax?
A: No. A charge for running errands, such as grocery shopping, picking up dry cleaning, taking shoes to a repair shop, or picking up event tickets, is not taxable.

Q: If the errand service buys taxable items for a customer, does sales tax still apply to those items?
A: Yes. The customer still owes sales tax on the taxable items or services purchased during the errand, such as items bought at the grocery store, the dry cleaner's charge, the shoe repair charge, or an amusement ticket price.

Q: What if the errand company also cleans houses, caters, or sells flowers?
A: If the company is actually providing a taxable service or selling taxable items, like house cleaning, catering, or flowers, it must collect sales tax on the hourly charge for that service or on the sales price of those goods.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9205L1171A10

Original ruling text

May 18, 1992

Dear ***:

Thank you for your recent letter asking about the taxability of your errand
service.

According to the brochure enclosed with your letter, *** provides
personal services like shopping, party planning, picking up dry cleaning or
taking shoes to a shoe repair shop. ***** charges a set amount per hour
for each of these various personal services.

Response: A charge for running errands is not taxable. For example, if a charge
is made for shopping at a grocery store, picking up cleaning, taking shoes to
the repair shop, or picking up tickets for a particular event, the charge for
these services is not taxable. You would, of course, have to pay sales tax on
the taxable items bought at the grocery store, the charge made by the dry
cleaner, the shoe repair shop, and the ticket seller (if the ticket is for an
amusement).

On the other hand, if *** is actually providing a taxable service, or
selling taxable items, like house cleaning, catering, or selling flowers, then
***** would be required to collect sales tax on the hourly charge for
cleaning the house and the sales price of the catering and flowers.

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, you may call me toll free
at 1-800-252-5555, extension 3-4633. The regular number is 512/463-4633.

Sincerely,

Wanda Hutcheson
Tax Administration Division