When must architects, engineers, or contractors in Texas charge sales tax on copies of blueprints or plans, and when do they instead owe tax as the purchaser?

Subject

Blueprint and Plan Copy Sales — When Architects, Engineers, and Contractors Owe or Collect Sales Tax

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9309L1292D12

Plain-English Summary

This letter responds to a question about reproduction services purchased by architects, engineers, contractors, and government entities, and asks under what circumstances copies may be sold tax free. The letter opens with the general rule: the Texas Tax Code requires a seller of a taxable item to collect tax unless the seller accepts "in good faith" a valid and properly completed Texas resale certificate or exemption certificate.

For architects, the letter distinguishes two situations. When an architect produces original plans and copies of those plans for a client under a client/architect agreement, that is a nontaxable professional architectural service — the architect does not collect sales tax on separately-stated charges for the blueprint or blueline copies given to the client. However, the architect must still pay sales tax on the purchase of those reproductions, regardless of whether the client itself is tax-exempt. By contrast, if an architect sells copies of "stock" blueprints and specifications that were not produced for a client under an owner/architect agreement — the letter's example is someone who wants to bid on a construction project and buys a copy of the original plans directly from the architect — the architect must collect sales tax on that sale (or may accept a resale certificate if the copies are purchased for resale).

Engineers are treated the same way as architects: copies of original designs provided to clients under client/engineering agreements are not taxable, even if separately stated, and the engineer pays sales tax on those copies even when the client is exempt. But if someone purchases copies of existing designs rather than receiving original engineering services, that purchase is taxable, and the engineer must collect and remit tax (again, with the option to accept a resale certificate for copies that are genuinely resold).

Contractors are consumers of blueprint or design copies used for their own contract to improve real property — they must pay sales tax on such copies even if they separately state the charge to the property owner, and even if the owner is exempt. But contractors must collect and remit tax on copies of plans sold to people who are not parties to the construction contract, such as someone seeking copies to bid on the project; a resale certificate may be issued for copies that are genuinely resold.

Finally, the letter confirms that the United States, the State of Texas, and political subdivisions are exempt from sales tax, and that a valid, properly completed exemption certificate — or a purchase voucher issued by the government entity — is acceptable documentation in lieu of tax.

What This Means For You

If you're an architect or engineer providing plan copies to your own client: Don't collect sales tax on those copies when they're delivered under the client agreement, even if separately billed — but budget for the sales tax you owe on purchasing the reproduction service yourself, since that liability doesn't go away just because your client is tax-exempt.

If you're an architect, engineer, or contractor selling "stock" copies to someone outside the original agreement (e.g., a bidder): That sale is taxable. You must collect and remit sales tax, unless the buyer gives you a valid resale certificate for copies purchased for resale.

If you're a contractor: You're a consumer of copies used for your own construction contract, so you pay tax on those regardless of the property owner's exempt status — but if you sell copies to someone who isn't part of the construction contract (like a competing bidder), you must collect and remit tax on that sale.

If you're dealing with a government customer: A valid exemption certificate or a government purchase voucher is sufficient documentation to sell tax free to the United States, the State of Texas, or a political subdivision.

Q&A

Q: Does an architect collect sales tax on blueprint copies given to its own client?
A: No. Per the letter, the architect does not collect sales tax on separately-stated charges for copies of blueprints or blueline prints provided to clients under client/architect agreements — but the architect must pay sales tax on the purchase of those copies regardless of the client's exempt status.

Q: What happens if an architect sells copies of "stock" plans to someone who isn't the original client?
A: The letter states architects who sell copies of "stock" blueprints and specifications not produced for a client under an owner/architect agreement must collect sales tax on such sales — for example, when a person who wants to bid on a construction project buys a copy of the original plans directly from the architect. The architect may issue a resale certificate for copies purchased for resale.

Q: Are engineers treated differently from architects for copies of designs?
A: No — per the letter, engineers "like architects, provide nontaxable professional engineering services," and copies of original designs provided to clients under client/engineering agreements are not taxable even if separately stated, while the engineer pays sales tax on those copies even if the client is exempt.

Q: Does a contractor pay or collect sales tax on blueprint copies?
A: Both, depending on who receives them. The letter states contractors are consumers of copies used for their own contract to improve real property and must pay sales tax on them regardless of the client's exempt status, but must collect and remit tax on copies of plans sold to persons who are not parties to the construction contract, such as someone seeking copies to bid a project.

Q: How can a business sell blueprint copies tax free to a government entity?
A: Per the letter, the United States, the State of Texas, and political subdivisions are exempt from sales tax, and the seller may accept a valid and properly completed exemption certificate in lieu of tax; a purchase voucher issued by the government entity is also acceptable documentation.

Original ruling text

September 24, 1993

Dear ***:

Thank you for your letter concerning reproduction services
purchased by architects, engineers, contractors, and
government entities. You asked under what circumstances may
you sell tax free. The Texas Tax Code requires a seller of a
taxable item to collect tax, unless the seller accepts "in
good faith" a valid and properly completed Texas resale
certificate or exemption certificate.

Architects provide a nontaxable professional architectural
service when producing original plans and copies of the
original plans for clients. The architect does not collect
sales tax on separately-stated charges for copies of
blueprints or blueline prints provided to clients per
client/architect agreements. In such circumstances, the
architect must pay sales tax on the purchase regardless of
the exempt status of the client. Architects who sell copies
of "stock" blueprints and specifications which are not
produced for a client under a owner/architect agreement must
collect sales tax on such sales. For example, a person who
wishes to bid on a construction project may seek to purchase
a copy of the original plans directly from the architect. In
that case, the architect may issue a resale certificate for
the copies purchased for resale.

Engineers, like architects, provide nontaxable professional
engineering services. Copies of original designs that are
provided to clients under client/engineering agreements are
not taxable even if separately stated to the client. The
engineer should pay sales tax on such copies even if the
client is an exempt entity. Persons who are purchasing
copies of existing designs, rather than original
engineering services, owe sales tax on such purchases. In
that case, the engineer must collect and remit sales tax on
such sales and may issue a resale certificate for copies
that are in fact resold.

Contractors are consumers of blueprint or design copies used
for a contract to improve real property even if the
contractor separately states the charge for the copies to
the owner of the real property. The contractor should pay
sales tax on such copies regardless of the exempt status of
the client. However, contractors must collect and remit tax
on copies of plans sold to persons who are not parties
to the construction contract. For example, sales tax is due
on a sale to a person who seeks copies of the plan in order
to bid a project. The contractor must collect and remit tax
on such sales and may issue a resale certificate for copies
that are in fact resold.

The United States, the State of Texas, and political
subdivisions, etc., are exempt from sales tax. You may
accept a valid and properly completed exemption
certificate in lieu of tax. A purchase voucher issued by the
government entity is also acceptable as documentation.

This opinion is based on the facts you submitted. Other
facts, though similar, may yield different results.

You may call me toll free at 1-800-531-5441, ext. 5-0030.
The direct line is 512/475-0030. You may also write to Tax
Administration, Comptroller of Public Accounts.

Sincerely,

David Somerville
Tax Administration Division

NOTE: Previous Accession Number 9309172L