Ezel / Tax Rulings / TX
TX 8712L0853D11 Sales and/or Use Tax (State,Local,MTA) 1987-12-30

Were janitorial services taxable when a corporation provided them to a partnership in which the corporation was a principal or member?

Short answer: Yes. Texas treated the corporation and partnership as separate and distinct entities and found no exemption for the taxable janitorial transaction between them.

Apply this to your situation

This page answers the general question as of 1987. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1987
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 a taxpayer-specific December 1987 Texas Comptroller letter. It says the opinion may change if the facts differ and cites no statute or rule. STAR's caption also mentions subsidiaries and corporations, but the operative body decides only janitorial services from one corporation to a new partnership with overlapping principals or members; this page does not extend the holding to caption-only structures. Related-entity, partnership, corporation, intercompany-service, janitorial, and real-property-service rules may have changed; verify current law. STAR documents may no longer represent current policy even when not marked superseded. Identities are redacted. This summary is informational only and is not legal or tax advice.
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

CORP ABC provided janitorial real-property services to a new partnership whose principals or members included CORP ABC and outside partners.

The Comptroller said the charge was taxable because the corporation and partnership were separate and distinct legal entities. The sales-tax law provided no exemption for the taxable transaction merely because CORP ABC participated in both entities.

What this means for you

The historical answer respected entity boundaries despite overlapping ownership or membership.

Common questions

Were the janitorial charges taxable? Yes.

Did overlapping ownership create an exemption? No.

Citations and references

The letter cites no numbered statute or rule.

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

BOB BULLOCK
Comptroller December 30, 1987

Dear ***:

Thank you for your letter of December 1, 1987 regarding CORP ABC
sales tax responsibilities in the situation set out in your letter.

The charge for real property services (janitorial services) provided by
CORP ABC to a "new partnership" (CORP ABC and new outside partners) is
taxable. CORP ABC and the new partnership are separate and distinct en-
tities even though CORP ABC is a principal or member in both partner-
ships. The sales tax law does not provide an exemption for taxable
transactions between such entities.

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 our toll-
free number 1-800-531-5441. The regular number is 512/463-4600. You may
write me at the Tax Policy Division.

Sincerely,
Eddie C. Washington
Tax Policy Division

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