If I rent my Texas condo out short-term part of the year and use it as my residence the rest of the year, is repair and remodeling work on it taxable?

Plain-English summary

A taxpayer wrote to the Comptroller about plumbing repairs on a condominium that was used two different ways during the year: rented out monthly during the winter, and rented daily or weekly during the summer. The Comptroller's Tax Administration Division explained that the daily/weekly summer rentals are themselves taxable under the Hotel Occupancy Tax, and that — as a general rule — rentals longer than 30 days are treated as residential use.

But because this particular condo was used BOTH residentially (the winter monthly rentals) AND commercially (the summer daily/weekly rentals), the Comptroller ruled that the unit as a whole is treated as a commercial structure. That classification means any repair or remodeling work done on the condo — like the plumbing repairs the taxpayer asked about — counts as taxable nonresidential repair and remodeling services under Rule 3.357, rather than exempt residential repair work.

What this means for you

Condo and timeshare owners who rent short-term

If you own a condo or timeshare unit and rent it out on a daily or weekly basis for any part of the year, that mixed use can push the whole property into "commercial structure" status for sales tax purposes — even during the months you or your tenants use it more like a residence. That matters because Texas taxes repair and remodeling labor on nonresidential (commercial) property but generally does not tax the same labor on purely residential property.

Property managers and contractors

If you do repair or remodeling work on a mixed-use condo or timeshare unit like the one in this letter, don't assume the job is tax-exempt just because the owner also lives there part of the year. If the unit is also rented out short-term (daily/weekly) during part of the year, the Comptroller's position in this letter is that the repair work is taxable.

Accountants and tax professionals

The letter draws a bright line based on rental duration: rentals over 30 days are generally residential use, while daily/weekly rentals are commercial and subject to Hotel Occupancy Tax. When a single unit has both patterns of use across the year, this ruling treats the whole structure as commercial for purposes of Rule 3.357, meaning repair/remodeling services on it are taxable.

Common questions

Q: Is repair work on my condo taxable if I rent it out short-term part of the year?
A: Based on this letter, yes — if your condo is used both residentially and commercially (for example, monthly rentals part of the year and daily/weekly rentals another part of the year), the Comptroller treats the whole structure as commercial, and repair or remodeling services on it are taxable under Rule 3.357.

Q: What counts as "residential" versus "commercial" rental use here?
A: The letter states that rentals in excess of 30 days are generally considered residential use, while the daily and weekly rentals described in the letter are taxable under the Hotel Occupancy Tax.

Q: Does this letter apply to my situation?
A: Not automatically. This is a letter ruling addressed to one taxpayer based on the specific facts they described (a condo rented monthly in winter and daily/weekly in summer). Under STAR's reliance rules, only that taxpayer can rely on it directly — your facts may differ.

Citations and references

Rules cited:

• 34 Tex. Admin. Code Rule 3.357 (nonresidential repair and remodeling services)

Other references in the letter:

• Hotel Occupancy Tax (referenced as applying to the daily/weekly rentals, no specific statute cited)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9304L1232B14

Original ruling text

April 7, 1993

Dear **:

Thank you for your letter postmarked March 12, 1993, concerning plumbing
repairs to a condominium used both as a residence and commercially.

Your condominium is rented out on a monthly basis during the winter and on a
daily or weekly basis in the summer. The daily and weekly rentals are taxable
under the Hotel Occupancy Tax.

Generally, rentals in excess of 30 days are considered residential use.

However, a condominium that is used both in a residential and commercial
manner will be considered a commercial structure. Any repair or remodeling will
be considered taxable services per enclosed Rule 3.357 concerning
nonresidential repair and remodeling services.

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

You may call me toll free at 1-800-531-5441, ext. 5-0613. The direct line is
512/475-0613. You may also write to Tax Administration Division, Comptroller of
Public Accounts.

Sincerely,

Kevin Koller
Tax Administration Division