Is sales tax owed on cleaning, polishing, and restoring granite, marble, and terrazzo floors, walls, vanities, and tabletops?

Subject

Natural Stone (Granite, Marble, Terrazzo) Floors, Walls, Tabletops, Furniture — Cleaning, Polishing, Repair, Restoration, Maintenance

Plain-English summary

A stone restoration company asked the Comptroller how sales tax applies to its business: cleaning and polishing, repairing, restoring, maintaining, and preserving natural stone surfaces (granite, marble, terrazzo) on floors, walls, vanities, tabletops, and furniture, for both residential and nonresidential customers. The Comptroller's answer sorts the work into three buckets, each taxed differently.

Cleaning services are always taxable. Cleaning, polishing, waxing, and sealing floors, walls, vanities, and similar surfaces in any building (residential or nonresidential) is a taxable real property service, even if done on a recurring schedule. The same cleaning/polishing work is also taxable when done on tangible personal property, such as furniture or tables not permanently attached to the building. The contractor owes tax on chemicals and buffer pads it uses up in the job, but can buy wax and sealant tax-free with a resale certificate since those get passed on to the customer.

Repair, remodeling, and restoration of nonresidential real property or tangible personal property is fully taxable. The whole charge -- labor and materials together -- is taxable, whether billed as one lump sum or itemized separately. The contractor can use a resale certificate to buy the materials that get incorporated into the customer's property tax-free, but still owes tax on consumable supplies and equipment used on the job.

Repair, remodeling, and restoration of residential real property is taxed differently. Labor to repair, remodel, restore, or maintain a home (or to build new residential or nonresidential structures) is not taxable -- only the materials are. How the materials get taxed depends on the contract type:

• Lump-sum contract: the contractor is treated as the consumer of the materials, pays tax when buying them (or accrues it from tax-free inventory), and does not charge the customer tax on the lump-sum price.
• Separated contract: the contractor is treated as reselling the materials, can buy them tax-free with a resale certificate, but must collect tax from the customer on the agreed price for those materials. Local tax is based on the jobsite location.

What this means for you

Stone restoration and cleaning contractors

Classify each job before billing: (1) is it cleaning/polishing/sealing (always taxable, regardless of property type), or (2) repair/restoration (taxability turns on whether the property is residential or nonresidential, and if residential, whether your contract is lump-sum or separated)?

Homeowners hiring stone restoration work

If your contractor is only cleaning, polishing, or sealing your stone floors or countertops, expect to pay tax on the full service charge. If instead they're repairing or restoring residential stone (e.g., fixing cracks or replacing tile), only the materials should be taxed, not the labor.

Commercial property owners and businesses

Repair or restoration work on nonresidential buildings or on furniture/tabletops is taxable on the entire charge, with no distinction between labor and materials.

Common questions

Q: Is cleaning and polishing a granite countertop always taxable, even at a private home?
A: Yes. Per this letter, cleaning, polishing, waxing, and sealing services are taxable whether performed on residential or nonresidential real property, or on tangible personal property like furniture.

Q: I run a separated contract to repair a marble floor in someone's house. What do I charge tax on?
A: Under a separated contract for residential real property repair, you collect tax from the customer only on the agreed price for the materials incorporated into the property -- not on your labor charge.

Q: What about repairing a marble tabletop that isn't attached to the building?
A: That's tangible personal property, so the full repair charge (labor and materials) is taxable, regardless of contract type.

Citations and references

Rules cited:

• 34 Tex. Admin. Code Rule 3.356, subsections (a)(7) and (b) (real property cleaning services)
• 34 Tex. Admin. Code Rule 3.292 (services to tangible personal property)
• 34 Tex. Admin. Code Rule 3.357 (real property repair, remodeling, and restoration)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9605410L

Original ruling text

May 2, 1996

Dear **:

Thank you for your letter of April 24, 1996. You asked that we address the
taxability of your services.

As I understand it, your services include cleaning and polishing, repairing,
restoring, maintaining, and preserving natural stone surfaces. This work is
done on floors, walls, vanities, tabletops, and furniture. You work on both
residential and nonresidential real property and tangible personal property.

Your services fall within several categories. You should determine whether the
service is being performed on residential or nonresidential real property, or
tangible personal property. The taxability of each is discussed below.

Cleaning Services

Services to clean, polish, wax and seal the floors, walls, vanities, etc. in a
residential or nonresidential building are taxable. These same services are
also taxable if performed on tangible personal property such as furniture or
tables not permanently affixed to realty. For sales and use tax purposes,
building cleaning means the activities of keeping the inside and outside
premises of a building clean, orderly, and functional. The services are taxable
even if done on a scheduled and periodic basis. Please refer to subsections
(a)(7) and (b) of Rule 3.356 concerning real property services. Regarding
services to tangible personal property, see Rule 3.292. You owe tax on taxable
items such as cleaning chemicals and buffer pads used or consumed in the
cleaning process. You may issue a resale certificate in lieu of paying tax on
items such as wax and sealant.

Repair, Remodeling, and Restoration of Nonresidential Real Property and
Tangible Personal Property

The total charge (i.e., labor and materials) to restore, repair, or remodel
nonresidential real property and tangible personal property is taxable. It
makes no difference whether you use a lump-sum or separated contract or invoice
to bill the customer. You owe tax on taxable items used or consumed in the
repair, remodel, or restoration. You may issue a resale certificate in lieu of
paying tax on the materials incorporated into the customer's property. Real
property repair, remodeling and restoration is covered by Rule 3.357. Rule
3.292 covers services to tangible personal property.

Repair, Remodeling, and Restoration of Residential Real Property

Labor to repair, remodel, restore, or maintain residential real property is not
taxable. Also, labor to build new residential or nonresidentia1 structures is
not taxable. Materials incorporated into the realty are taxable. You may enter
into either a lump-sum or separated contract with your customer. The tax
consequences of each type of agreement follow.

Lump-sum Contract - Under a lump-sum contract, you are considered the consumer
of all materials used to perform the contract. You owe tax on the materials at
the time of purchase or may accrue tax on materials removed from a valid
tax-free inventory. Also, you owe tax on all materials and equipment bought,
leased, or rented for use on the job. The lump-sum charge to your customer is
not taxable.

Separated Contract - Under a separated contract, you are considered a retailer
reselling the materials that will be incorporated into the customer's realty.
As such, you may issue a resale certificate to purchase incorporated materials
tax free. You must collect tax from your customer on the total agreed contract
price for the incorporated materials. Under a separated contract, you owe tax
on all consumable materials and equipment bought, leased, or rented for use on
the job. Local taxes are due based on the location of the jobsite.

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

You may call me toll free at 1-800-531-5441, ext. 5-0037. The direct line is
512/475-0037. You also may write to Sales Tax Policy Division, Comptroller of
Public Accounts.

Sincerely,

Lindey Osborne
Sales Tax Policy Division

February 6, 1996

Dear Sir:

We are a professional firm in the restoration and preservation business of
natural stone surfaces. Your floors, walls, vanities and tabletops were
designed to consistently project elegance, refinement and good taste. COMPANY
can protect new surfaces or restore the worn to their original beauty and
gloss, which enables their investment to appreciate in value.

COMPANY offers to you the following services:

Marble, Terrazzo and Granite

• Post-Construction Clean, Polish and Seal
• Restoration, Polishing and Sealing
• For Floors, Walls, Vanities/Bars and Furniture
• Repairs: Cracks, Holes, Grout and Tile Replacement

Flagstone, Slate, Brick, Saltillo, Limestone, Quarry Tile and Cement

• Deep Cleaning and Sealing: Interior and Exterior

Ceramic Tile - Bathrooms

• Cleaning and Repairs
• Grout: Cleaning, Replacing, Recoloring and Sealing

Slip Resistant Treatment

• Pools, Walk Areas and Driveways

Owned by a third generation **, COMPANY offers twenty years of
experience and dedication to outstanding service. As a franchise of the largest
stone care company in the United States, PARENT COMPANY, we are able to bring
to you sophisticated technology and state-of-the-art stone care.

Should you have a need for our service or would like for one of our COMPANY
experts to come to your home or business for a free evaluation of your stone,
please call ** and we will be happy to schedule an appointment.

Sincerely,

Caught Between a Rock and a Hard Place?

Call COMPANY

Whether the rock is Granite, Marble, or Terrazzo, whether the hard surface is
Smooth, Porous or Textured, COMPANY can do the job, because stone resurfacing
and restoring is our specialty. We work on floors, walls, vanities/bars,
furniture, driveways, pool decks and most natural stone surfaces, as well as

TRAVERTINE LIMESTONE BRICK TERRA COTTA QUARRY TILE BRICK CONCRETE CERAMIC
TILE GROUT

The COMPANY Restoration Technique

Our polished floor restoration process utilizes the Ultimate Grinding Plant
(UGP), a tool proven to deliver a "grind-in-place" stone floor, the flattest
re-surfaced floor obtainable in the industry. The UGP is the only one of its
kind in CITY and one of only five others in the U.S. Whether the stone is
polished, honed, flamed or straight from the earth, COMPANY provides the finest
restoration results using the safest products available.

The COMPANY Quality Pledge

COMPANY is a franchise of PARENT COMPANY, the largest natural stone restoration
company in America. COMPANY offers the following services to residential and
commercial businesses for interior and exterior:

• Consulting prior to construction
• Post-Construction clean & polish
• Seal: INTERLOK and penetrating
• Expansion joint replacement

• Restoration

• Repairs: cracks, holes, replacement

• Polishing
• Regrouting
• Restroom Restoration
• Epoxy Injection

Call COMPANY for a free evaluation at ** and we will be happy to
schedule an appointment.

Sincerely,