Is the sale, fabrication/manufacture, and installation of custom blinds, draperies, and plantation shutters taxable in Texas, and does it matter whether the work is done in new-home construction versus an existing home?

Plain-English summary

A business that sells consultation services (paint, carpeting, brick, wallpaper selection) plus custom draperies, custom blinds, and custom plantation shutters — mostly for new homes with high window elevations requiring custom jobs — asked the Comptroller how each part of its business is taxed, and whether it matters if the work is for new home builders versus people remodeling older homes.

The Comptroller answered six specific questions:

1. Hourly consulting fees: Nontaxable if truly identified as consulting fees and separately stated from all other charges. If billed as a percentage of the furnishings sold, they're taxed the same way as those furnishings.
2. Blinds (cost of goods): The materials that become part of the blinds are taxable. Who actually remits the tax depends on the contract type — for new construction or residential repair/remodeling under a lump-sum contract, the contractor owes the tax on materials; under a separated contract, the contractor issues a resale certificate on the materials and instead collects tax from the homeowner on the sales price of the blinds.
3. Installation of blinds and draperies: Nontaxable new construction labor when installed as part of new home construction, but taxable as part of the sales price when installed in an existing home.
4. Draperies (materials, hardware, lining, fabric): Taxable, with the same contract-type rule as blinds (see #2).
5. Draperies (labor to manufacture): Nontaxable new construction labor when installed as part of new construction, but taxable as part of the sales price when installed in an existing home.
6. Plantation shutters: The labor to manufacture and install interior wooden shutters is nontaxable — either as new construction labor or as residential repair/remodeling labor — regardless of whether it's a new home or an existing home. The materials, however, remain taxable to the end consumer, determined by the same contract-type rule.

What this means for you

Window-treatment retailers and installers

Whether you owe tax (and on what) depends heavily on two things: what you're selling (blinds/draperies vs. plantation shutters) and whether the job is new construction versus an existing home. Track your contracts carefully — lump-sum versus separated contracts change who is responsible for remitting tax on materials. Plantation shutter installation labor gets more favorable treatment than blinds/drapery installation labor, since shutter labor is nontaxable in both new and existing homes.

Home builders and remodeling contractors

If you're hiring out window treatments, expect installation labor for blinds and draperies to be bundled into a taxable charge when the work is on an existing home, but treated as nontaxable new construction labor when it's part of building a new home. Plantation shutters are treated as nontaxable labor either way.

Accountants and tax professionals

This letter is a useful template for the general "materials taxable, labor taxability depends on new construction vs. remodeling" framework, plus the lump-sum vs. separated contract distinction that determines who bears responsibility for remitting tax on materials (contractor vs. homeowner via resale certificate). Note the special carve-out for plantation shutter labor, which the letter treats as always nontaxable, unlike blind/drapery installation labor.

Common questions

Q: Are hourly consulting fees for helping customers pick out paint, carpet, and window treatments taxable?
A: Not if they are genuinely consulting fees, separately stated from all other charges. If the consulting fee is instead billed as a percentage of the furnishings sold, it's taxed the same as those furnishings.

Q: Who owes tax on the materials that go into custom blinds and draperies?
A: It depends on the contract. Under a lump-sum contract for new construction or residential repair/remodeling, the contractor owes the tax on materials. Under a separated contract, the contractor issues a resale certificate on the materials and instead collects tax from the homeowner on the sales price of the blinds.

Q: Is installing blinds or draperies in a brand-new home taxable?
A: No — it's nontaxable new construction labor when installed as part of new home construction.

Q: Is installing blinds or draperies in an existing home taxable?
A: Yes — it's taxable as part of the sales price of the blinds and drapes when installed in an existing home.

Q: Are plantation shutters treated the same as blinds and draperies?
A: No. The labor to manufacture and install interior wooden shutters is nontaxable new construction labor or nontaxable residential repair/remodeling labor whether installed in new construction or in an existing home. The shutter materials themselves are still taxable to the end consumer, determined by contract type.

Q: Can another business rely on this letter for its own facts?
A: No. The opinion is based on the facts presented, and if there are additional or different facts, the opinion may change.

Citations and references

No specific statutes or rule numbers were cited in this letter.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9606L1416F08

Original ruling text

June 10, 1996

Dear **:

I am responding to your letter questioning your tax

responsibilities when providing your services to new home builders and persons

that remodel older homes. You have been given information by builders and real

estate agents about the taxability of window treatments and wish to obtain

proper instructions from this agency.

You provide consultation services, help with selection

of paint, carpeting, brick, wallpaper, etc. You also sell custom draperies,

custom blinds, and custom plantation shutters. Ninety-nine per cent of the new

homes have very high window elevations and require custom jobs. You asked the

following questions to which I have provided responses.

1. Are our hourly consulting fees taxable or nontaxable?

Response: True consulting fees that are

identified as such and are separately stated from all other charges are not

taxable. Consulting fees that are billed as a percentage of the furnishings,

etc., sold by you are taxed in the same manner as the furnishings, etc.

2. Are the blinds (cost of goods) taxable or nontaxable?

Response: The materials that become a part of the

blinds are taxable. The person that pays the tax is controlled by the type of

contracts involved in selling the blinds. If the work is new construction or

residential repair or remodeling and the contract is lump-sum, the contractor

(your company) owes tax on the materials. If the work is new construction or

residential repair or remodeling and the contract is separated, the contractor

(your company) issues a resale certificate on the materials, and collects tax

on the materials from the homeowner/customer on your sales price of the blinds.

3. Is the installation of blinds and draperies taxable or nontaxable?

Response: The installation of blinds and

draperies is nontaxable new construction labor when installed as part of the

new construction of the home. The installation of blinds and draperies is

taxable as part of the sales price of the blinds and drapes when installed in

an existing home.

4. Are the draperies (materials, hardware, lining, fabric) taxable or nontaxable?

Response: The materials that become a part of the

draperies are taxable. The person that pays the tax is controlled by the type

of contracts involved in selling the blinds. See the response to #2.

5. Are the draperies (labor to manufacture) taxable or nontaxable?

Response: The labor to manufacture draperies is

nontaxable new construction labor when the drapes are installed as part of the

new construction of the home. The labor to manufacture draperies is taxable as

part of the sales price of the drapes when installed in an existing home.

6. Are the plantation shutters taxable or nontaxable?

Response: The labor to manufacture and install

interior wooden shutters is nontaxable new construction labor or nontaxable

residential repair or remodeling labor whether installed in the new

construction phase of the home or in work performed on an existing home. The

materials are taxable to the end consumer as determined by the type of

contract. See the response to #2.

This opinion is based upon the facts presented. If there are additional or

different facts, this opinion may change.

Sincerely,

Tax Policy Division

NOTE: Previous Accession Number 9606611L