Are crew uniforms and their monthly cleaning exempt from Texas sales tax when purchased for the crew of a ship operating in interstate coastal commerce?

Plain-English summary

A business asked the Comptroller whether crew uniforms -- and the monthly service to clean them -- are exempt from Texas sales tax when purchased for the crew of a ship operating in interstate coastal commerce. The Comptroller said no. Texas exempts machinery, equipment, and consumable items used to operate certain ships and vessels under Tax Code § 151.329, but that exemption only reaches items that are component parts of the vessel (or firmly attached to it) or that are used or consumed in operating or maintaining the ship itself. Crew uniforms are worn by people, not installed on or consumed by the vessel, so they fall outside both tests -- meaning the uniforms themselves and the cleaning service are both taxable.

What this means for you

Ship and vessel operators

Don't assume the vessel-operation exemption reaches everything a ship's crew uses on the job. It's limited to items that are physically part of the vessel or consumed in running/maintaining it (fuel, lubricants, certain equipment) -- personal items like crew uniforms, and services performed on those personal items like laundering, stay taxable even on a vessel that otherwise qualifies for the exemption.

Accountants and tax professionals

This is a useful data point for the boundary of § 151.329: the test is whether the item is a component part of, firmly attached to, or consumed in operating/maintaining the vessel -- not simply whether it's used by someone working on the vessel.

Common questions

Q: Are crew uniforms exempt as items used in vessel operations?
A: No, per this letter -- the exemption covers items that are component parts of the vessel or used/consumed in operating or maintaining it, and uniforms don't meet that test.

Q: Is the service of cleaning the uniforms taxable too?
A: Yes, per this letter -- since the uniforms themselves aren't exempt, cleaning them isn't either.

Q: What kinds of items DO qualify for the § 151.329 vessel exemption?
A: Per this letter, items that are component parts of the vessel, firmly attached to it, or used/consumed in its operation or maintenance.

Citations and references

Statutes and rules:

• Tex. Tax Code § 151.329 (exemption for machinery, equipment, and consumable items used in the operation of certain ships and vessels)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9706506L

Original ruling text

June 5, 1997

Dear ***:

Thank you for your letter dated, 1997, concerning the taxability of crew
uniforms and the monthly cleaning of the uniforms that are purchased for crew
members of a ship operating in interstate coastal commerce.

Crew uniforms do not qualify for the exemption provided for machinery,
equipment and consumable items used in the operation of certain ships and
vessels under Tax Code ¤151.329.

Exempt items must be considered component parts of a vessel or otherwise firmly
attached to the vessel. The exemption also applies to items that are used or
consumed in the operation or maintenance of a ship or vessel.

Sales tax rules are available on the Internet
.

This opinion is based on the facts you submitted and current law. Other facts
though similar, may result in different answers.

If you have any questions or need more information, you may call me toll free
at 1-800-531-5441, ext. 50330. The direct line is 512/475-0330. You may also
write to Tax Policy Division, Comptroller of Public Accounts.

Sincerely,

Bettie Peterson
Tax Policy Division