How did Texas tax pool and spa repair, remodeling, equipment work, and cleaning on residential versus commercial property?

Plain-English summary

Repairing, remodeling, or restoring a pool or spa on commercial property was taxable on the total charge, including incorporated tile, decks, and pool or spa equipment.

For a pool or spa on residential property, the provider acted as a contractor and its labor was not taxable. The letter expressly included apartment pools and pools owned by homeowners' associations. Separately charged parts were taxable.

Repair, maintenance, remodeling, or restoration of equipment not incorporated into real property was taxable on the total charge. Pool cleaning was also taxable.

What this means for you

Under the 1988 guidance, both the property's use and whether equipment became part of the realty mattered. A provider performing taxable commercial-pool work could give a subcontractor a resale certificate and then collect tax on the total customer charge.

The letter also required state and the identified city tax on taxable items, plus MTA or county tax when work occurred within the corresponding taxing jurisdiction. Those rate and sourcing directions are historical.

Common questions

Was commercial pool repair taxable? Yes, on the total charge.

Was residential pool labor taxable? No, including work on apartment and homeowners' association pools.

Were separately charged residential-pool parts taxable? Yes.

Was pool cleaning taxable? Yes.

Could a commercial-pool contractor give a subcontractor a resale certificate? Yes, for the taxable service described.

Citations and references

The letter referred to an enclosed real-property repair-and-remodeling bulletin and contractor rule but did not identify their numbers.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8804L0883B06

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, TX 78774

BOB BULLOCK
Comptroller April 21, 1988

Dear *:

Thank you for your recent letter concerning your tax responsibilities.

If you repair, remodel, or restore a pool or spa, on commercial property,
tax is due on your total charge. This includes tile, decks, etc. or pool
or spa equipment incorporated into real property.

If you repair, maintain, remodel, or restore equipment not incorporated
into
real property, tax is due on your total charge.

If you repair, remodel or restore a pool or spa on residential property
(including apartment pools and pools owned by homeowner's associations),
you
are acting as a contractor. This includes pool or spa equipment, decks,
tile, etc. incorporated into real property. In this situation, your
labor
is not taxable. If you charge separate for parts, you should collect tax
on those parts.

Pool cleaning is taxable. I'm enclosing a copy of a bulletin on real
property, repair and remodeling, and the rule on contractors.

If you are performing a taxable service, i.e., repairing a commercial
pool,
you may give your subcontractor a resale certificate in lieu of tax. You
should collect tax on the total charge to your customer.

You should always charge state sales tax and ** city sales
tax on
taxable items. You should collect Metropolitan Transit Authority (MTA),
or
county tax when you do work for your customer inside the MTA or taxing
county.

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,
Adina Whittemore
Tax Policy Division