Are mobile offices/office trailers taxable as tangible personal property in Texas, and can I buy them tax-free for rental to customers?

Subject

Mobile Offices and Office Trailers Became Taxable TPP Effective October 1, 1993

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9310L1266G10

Plain-English Summary

A taxpayer wrote to the Comptroller about purchasing mobile offices for rental to its customers. The Comptroller's response is short and direct: effective October 1, 1993, mobile offices are subject to limited sales and use tax as items of tangible personal property, and the tax provisions of Chapter 151 now apply to transactions involving mobile offices.

Because the taxpayer's mobile offices are purchased in order to be rented out, the letter explains that the taxpayer may issue a properly completed and valid resale certificate to its suppliers when purchasing the mobile offices, so long as the offices are to be resold (i.e., rented) within the geographical limits of the United States, its territories, or possessions. The letter notes that the current version of Rule 3.285, governing resale certificates, was enclosed with the original mailed letter. As the letter states, "Items purchased to be used as rentals qualify as sales for resale."

The letter closes with the Comptroller's standard caveat that the opinion is based on the facts presented and may change if the facts are different or additional, and it directs further questions to the Tax Administration Division. A note at the end references a previous accession number (9308189L.2 and/or 9308189L), indicating this letter relates to or updates an earlier ruling on the same topic.

What This Means For You

If you buy mobile offices or office trailers to rent to customers: As of October 1, 1993, these purchases are treated as purchases of tangible personal property under Chapter 151. You do not have to pay sales tax to your supplier at the time of purchase if you are buying the units to rent out — instead, give your supplier a properly completed and valid resale certificate under Rule 3.285, and collect tax on the rental charges to your customers instead.

Geographic limitation to keep in mind: The letter specifies that the resale certificate applies to units to be resold (rented) within the United States, its territories, or possessions — so confirm your rental use fits within that scope.

Keep this ruling in context: This is a short, narrow letter addressing one specific fact pattern (purchase for rental). It does not address other scenarios, such as outright sales of mobile offices to end users, and it is based only on the facts the taxpayer presented.

Q&A

Q: Are mobile offices and office trailers taxable in Texas?
A: Yes. The letter states that effective October 1, 1993, mobile offices are subject to limited sales and use taxes as items of tangible personal property, and the tax provisions of Chapter 151 now apply to transactions relating to mobile offices.

Q: Can I buy mobile offices tax-free if I'm going to rent them out to customers?
A: Yes, per the letter, you may issue a properly completed and valid resale certificate to your suppliers when purchasing the mobile offices to be resold (rented) within the geographical limits of the United States, its territories, or possessions, because items purchased to be used as rentals qualify as sales for resale.

Q: What rule governs the resale certificate mentioned in this letter?
A: Rule 3.285, regarding resale certificates, which the Comptroller enclosed with the original letter.

Q: Does this ruling apply if the facts of my situation are different?
A: Not necessarily. The letter states that the opinion is based upon the facts presented, and if there are different or additional facts, the opinion may change.

Q: When did this change in taxability take effect?
A: October 1, 1993, according to the letter.

Original ruling text

October 26, 1993

Dear ****:

Thank you for your patience while waiting for the response to your
letter regarding purchasing mobile offices for rental to your
customers. As you requested, I have faxed this letter to you. The
original will be mailed along with the referenced materials.

Effective October 1, 1993, mobile offices are subject to limited sales
and use taxes as items of tangible personal property. The tax
provisions of Chapter 151 now apply to transactions relating mobile
offices.

You may issue a properly completed and valid resale certificate to
your suppliers when purchasing the mobile offices to be resold within
the geographical limits of the United States, its territories, or
possessions. I have enclosed the current version of Rule 3.285,
regarding resale certificates. Items purchased to be used as rentals
qualify as sales for resale.

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

You may also write to Tax Administration Division, Comptroller of
Public Accounts.

Sincerely,

Tax Administration Division

NOTE: Previous Accession Number 9308189L.2 and/or 9308189L