When did sweeping and pressure-washing services for parking garages and parking lots become subject to Texas sales tax, and as of what date must a provider start collecting it?

Plain-English summary

A taxpayer wrote to the Texas Comptroller asking exactly when parking garage sweeping became a taxable service, because they needed to know the date they became liable for collecting sales tax on it. The Comptroller's answer draws a distinction between two similar-sounding services with two different effective dates:

• Parking lot sweeping or cleaning has been taxable since October 1, 1987. Providers should have been collecting tax on this since that date.
• Parking garage sweeping or cleaning only became taxable later, when Rule 3.356 (Real Property Services) was revised on December 6, 1991. However, purely for administrative and audit purposes, the Comptroller's office chose not to hold providers liable for collecting and reporting tax on parking garage sweeping until April 1, 1992.

The letter adds one more wrinkle: if a provider actually collected tax on parking garage sweeping between December 6, 1991 and April 1, 1992 — even though the Comptroller wasn't yet enforcing collection during that window — that provider must remit the tax it collected to the Comptroller's office.

What this means for you

Businesses that sweep, pressure-wash, or clean parking lots or garages

Know which service you provide and since when tax applied. Open-air parking lot sweeping/cleaning has been taxable since October 1, 1987 — a long-settled rule. Parking garage sweeping/cleaning is different: it technically became taxable on December 6, 1991, but the Comptroller did not begin enforcing collection until April 1, 1992. If you only started collecting tax on garage-sweeping services on or after April 1, 1992, you're in line with how the Comptroller actually enforced this rule.

Businesses that collected tax on garage sweeping between 12/6/91 and 4/1/92

If you charged and collected sales tax on parking garage cleaning services during that four-month window — even though the Comptroller wasn't yet requiring it — you are on the hook to remit that money to the state. You can't keep tax you actually collected from a customer just because the Comptroller was still phasing in enforcement.

Accountants and tax professionals reviewing older parking-facility accounts

When advising a client on historical exposure for parking-related cleaning services, check whether the service was performed on an open lot (taxable since 10/1/1987) or in a garage (taxable 12/6/1991, enforced from 4/1/1992), since a compliance review or audit could apply different look-back periods depending on which service was performed.

Common questions

Q: Is sweeping or pressure-washing a parking lot taxable in Texas?
A: Yes, and has been since October 1, 1987, as a real property service.

Q: Is sweeping or cleaning a parking garage taxable too?
A: Yes, but it became taxable later — with the December 6, 1991 revision to Rule 3.356 (Real Property Services).

Q: If parking garage sweeping became taxable on 12/6/91, why does April 1, 1992 matter?
A: The Comptroller's office decided, for administrative and audit purposes only, to hold providers liable for actually collecting and reporting the tax starting April 1, 1992, rather than the technical effective date of December 6, 1991.

Q: What if I already collected tax on garage sweeping before April 1, 1992?
A: If you collected tax on this service between December 6, 1991 and April 1, 1992, the letter states you are liable for remitting that tax to the Comptroller's office.

Q: Does this letter apply to my business specifically?
A: This is a STAR letter ruling responding to one taxpayer's facts. It can only be relied on by the taxpayer it was issued to, and older STAR letters like this one may no longer reflect current Comptroller policy. Confirm current rules with a Texas tax professional or the Comptroller's office.

Citations and references

• 34 Tex. Admin. Code § 3.356 (Real Property Services), as revised effective December 6, 1991

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9208L1191E11

Original ruling text

August 28, 1992

Dear *****:

Thank you for your recent letter concerning the date parking garage sweeping
became taxable. You asked for clarification of the date you will be held
liable for collecting tax on this service.

It important to note the difference in the dates parking garage sweeping and
parking lot sweeping became effective.

Sweeping or cleaning parking lots has been taxable since October 1, 1987. You
should have collected tax on these services since October 1, 1987.

Sweeping or cleaning parking lots became taxable with the December 6, 1991,
revision of Rule 3.356, Real Property Services. However, for administrative and
audit purposes the Comptroller's office is holding providers of these services
liable for collecting and reporting tax on these services as of April 1, 1992.
If you collected tax on this service between December 6, 1991 and April 1,
1992, you will be liable for remitting the tax to this office.

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

If you have any questions or need additional information, you may call toll
free 1-800-252-5555, ext. 50037 or the regular Austin number is 512-475-0037.
You also may write to Tax Administration Division.

Sincerely,

Lindey Osborne
Tax Administration Division