Was an association's bundled in-home service fee taxable when employees helped elderly or disabled people with cleaning, yard work, cooking, grooming, medication, letters, and bills?

Plain-English summary

The association's employees helped elderly or disabled people who could not care for themselves at home. Services included house cleaning, cooking, personal grooming, taking medication, writing letters, paying bills, and occasional yard work. Recipients were asked to pay only if they believed they could afford it, and payment was never required.

The Comptroller said house cleaning and yard work were taxable real-property services. But in the situation described, the overall fee for “in-home services” was nontaxable if employees were not hired specifically for yard work or house cleaning and no separate charge was made for those services.

What this means for you

The historical result treated cleaning and yard work as incidental parts of a broader unseparated care program. Hiring workers specifically for those taxable activities or charging separately could change the answer.

Common questions

Were house cleaning and yard work taxable by themselves? Yes. The letter classified them as taxable real-property services.

Why was the overall in-home fee nontaxable? Employees were not hired specifically for cleaning or yard work and those activities were not separately charged under the facts described.

What other services were included? Cooking, grooming, medication assistance, letter writing, bill paying, and other help for elderly or disabled recipients.

Did the program require recipients to pay? No. The letter says payment was voluntary based on ability to pay.

Citations and references

• No statute or administrative rule is cited in the letter text.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8712L0847G10

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

December 3, 1987

Dear ***:

Thank you for your letter concerning the taxability of "In-Home Services"
provided by employees of the *** Senior Citizens Association.

You stated that In-Home Services provides a variety of services to the
elderly and/or disabled who are incapable of caring for themselves in
their
own homes. These services include, but are not limited to, house
cleaning,
cooking, personal grooming, taking medication, writing letters, paying
bills
and occasional yard work.

The recipients of these services are also incapable of paying for these
services because they are on low fixed incomes such as social security.
They
are requested to pay for the service if they feel they can afford it but
in
no instance are they required to pay. Some do pay and do so at the time
they
receive the service.

The In-Home Services program is not federal or stated funded and survives
primarily on publicly donated funds. The employees are paid $3.35 an
hour
plus car mileage to and from the recipients home. Some of the workers
are
paid by the **** Organization which operates on a Title V Federal
Grant.

Question: Is this a taxable service?

Answer: House cleaning and yard work are taxable real property services.
However, in the situation you described, if the Association's employees
are not hired specifically for yard work or house cleaning and a separate
charge is not made for these services, the fee for "in-home services"
will
not be taxable.

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

If you have any questions or need more information, please call me at
1-800-252-5555 toll free from anywhere in Texas. The regular number is
512/463-4600. You may write me at the Tax Policy Division

Sincerely,
Julie Pesl
Tax Policy Division