Does a maid or housekeeper have to charge Texas sales tax on cleaning services performed in a private home?

Plain-English summary

A taxpayer who had been providing cleaning services to private households asked the Comptroller's office whether the cleaning services should have been taxed, given the sales tax distinction between cleaning companies and individual maids employed directly by a householder. The Comptroller explained that Sec. 151.057, Tex. Tax Code makes non-taxable those services performed by an employee for the person for whom the service is performed — so the answer turns on who really controls the work.

A maid service that holds itself out as a business (the letter gives the example "Happy Maids") and performs cleaning with only minimal direction — for instance, being told only which rooms to clean — is providing a taxable service and must collect sales tax, whether the account is commercial or residential and regardless of whether the workers are the service's employees or its owners. By contrast, a maid who is actually under the direction and control of the householder as to the details of what to clean and how to clean it is legally an employee of that householder, and the exemption in Sec. 151.057 applies — no tax is due.

The letter applied this test to the requester's own history: if they held themselves out as a maid service and cleaned homes with minimal direction, they were correct to collect tax. If, instead, they were really under the householder's direction and control, they were probably employees of the householder and may have over-collected tax. The Comptroller invited the taxpayer to contact the Assistant Director of Tax Administration to pursue a refund claim if they believed the latter applied to them.

What this means for you

Independent maid/cleaning service providers

If you hold yourself out as a cleaning business and clean homes with only minimal direction from the homeowner (such as which rooms to clean), you are performing a taxable service under Texas sales tax law and must collect and remit sales tax, whether you work for commercial or residential customers.

Householders who hire individual cleaners

If you directly control the details of what your cleaner does and how they do it — essentially supervising them like an employee — Texas treats that worker as your employee for sales tax purposes. Sec. 151.057, Tex. Tax Code exempts services performed by an employee for their employer, so no sales tax applies to what you pay them.

Workers or businesses who may have over-collected tax

If, after reviewing this control test, you believe you were actually functioning as an employee of the householders you cleaned for (rather than an independent service), the letter directs taxpayers to contact the Assistant Director of Tax Administration to have a refund claim reviewed.

Common questions

Q: Does a maid service have to charge sales tax on cleaning a private home?
A: Yes, if the service holds itself out as a business and performs the cleaning with only minimal direction from the homeowner (for example, being told only which rooms to clean).

Q: When is cleaning work exempt from Texas sales tax?
A: When the cleaner is actually under the direction and control of the householder as to the details of what to clean and how — in that case, the cleaner is treated as the householder's employee, and Sec. 151.057, Tex. Tax Code exempts services performed by an employee for the person employing them.

Q: Does it matter whether the cleaning account is commercial or residential?
A: No. As to maid services, the letter states it is immaterial whether the account is commercial or residential, or whether the work is performed by employees of the service or by the owners of the service.

Q: What if I collected tax but believe I was really an employee of the householder?
A: The letter directs taxpayers in that position to contact the Assistant Director of Tax Administration, who will process a claim for review.

Citations and references

Statutes:

• Sec. 151.057, Tex. Tax Code (services performed by an employee for the person for whom the service is performed are not taxable)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9410692L

Original ruling text

October 10, 1994

Dear ***:

Mr. Sharp asked me to respond to your letter about the taxability of cleaning
services and the distinction between companies that provide cleaning services
and householders who employ maids. There is a distinction under the sales tax
act. Sec. 151.057, Tex. Tax Act makes non-taxable those services which are
performed by employees of the person for whom the service is performed. The
distinction between a maid service and a maid coming into a householder's
residence is based on the fact that the maid service holds itself out as
performing a service and performs that service with minimal direction. A maid
on the other hand is considered an employee of the householder as the maid is
under the direction and control of the householder. As to maid services, it is
immaterial whether the account is commercial or is performed by employees of
the service or the owners of the service.

When your service was started, I gather you were working for householders. The
question is "how you did "business?". If you held yourself out as a maid
service, e.g. HAPPY MAIDS, and would come into a home and clean it without
anymore direction than which rooms to clean, you were right in collecting tax.
If you were really under the direction and control of the householder in the
details of what to clean and how to clean it, you were probably employees of
the householder.

If after reading this letter, you believe you were employees of the
householders, please contact Wade Anderson, the Assistant Director of Tax
Administration. He will process your claim for review. You may write him at
111 East 17th Street, Austin, Texas 78774, or call him at 1-800-531-5441,
extension 3-4004.

Sincerely,

Glen D. Hunt Director, Tax Administration

cc: Wade Anderson
Joe Galvan, Manager, Tax Administration