Ezel / Tax Rulings / TX
TX 8410L0598E13 Sales and/or Use Tax (State,Local,MTA) 1984-10-15

When did Texas treat commercial refrigeration, cooking, HVAC, and exhaust equipment as personal property or real property for repair-labor tax?

Short answer: Repair labor on personal property was taxable, including commercial refrigerators and cooking equipment merely attached to a wall or floor. Labor on built-in real-property equipment, central HVAC systems, and exhaust fans was not taxable.

Apply this to your situation

This page answers the general question as of 1984. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1984
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is an official Texas Comptroller of Public Accounts letter published on the State Tax Automated Research (STAR) system. Letters on STAR can be the basis of a detrimental reliance claim only for the taxpayer to whom the letter was directly issued (see 34 Tex. Admin. Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded. Taxpayer-identifying details are redacted. This summary is informational only and is not legal or tax advice. Consult a licensed Texas tax professional about your specific situation.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page) is the authoritative source for any reliance.

Plain-English summary

The Texas Comptroller said repair or service labor on personal property became taxable on October 2, 1984, while labor on real property remained nontaxable.

Equipment merely attached to a wall or floor remained personal property even when connected to a real-property exhaust system or drain. Commercial refrigerators and commercial cooking equipment were personal property, so their repair and service labor was taxable.

Equipment built into a building was real property. The letter specifically treated central heating and air-conditioning systems and exhaust fans as real property, making their repair or service labor nontaxable.

What this means for you

Commercial kitchen and refrigeration businesses

Simple attachment and utility connections did not by themselves convert the described equipment into real property.

HVAC and building-service contractors

The letter treated central HVAC and exhaust fans as real property.

Accountants and tax professionals

Document how the equipment is incorporated into the building. The body does not specifically decide walk-in freezers or coolers despite STAR's metadata.

Common questions

Q: Was repair labor on commercial refrigerators taxable?
A: Yes.

Q: Did attachment to a wall or floor make equipment real property?
A: No, not by itself.

Q: Was repair labor on central HVAC or exhaust fans taxable?
A: No, because the letter treated them as real property.

Citations and references

  • The letter cites no statute or administrative rule.

Source

Original ruling text

October 15, 1984

Dear **:

Thank you for your August 15, 1984 letter concerning the effect of the
new sales tax law changes on your business.

Labor to repair or service personal property will be taxable October 2,
1984. Labor to repair or service real property will remain nontaxable.

Equipment which is merely attached to a wall, or floor remains personal
property even if it is attached to an exhaust system or drain that is
realty. Commercial refrigerators and commercial cooking equipment are
personal property and repair or service labor on such equipment will be
taxable.

Equipment that is built into a building is considered real property.
Central heating and air conditioning systems, and exhaust fans are
considered real property and the labor to repair or service such is not
taxable.

Equipment that is built into a building is considered real property
Central heating and air conditioning systems, and exhaust fans are
considered real property and the labor to repair or service such is not
taxable.

I hope this letter provides guidelines for you to follow. If you have
questions or any particular situations arise, please feel free to
contact me. You may call toll free 1-800-252-5555 from anywhere in
Texas or you may write to the Tax Administration Division.

Sincerely,

Eddie C. Washington
Tax Policy Section
Tax Administration Division

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