Was restoration labor exempt when a building's listing in the National Register of Historic Places was still pending?

Plain-English summary

Under the letter's 1989 treatment, labor to repair, remodel, or restore a building already listed in the National Register of Historic Places was not taxable. Materials incorporated into the real property, along with the repairer's or remodeler's equipment and consumables, remained taxable.

This building was not listed when the work occurred, so the contractor had to collect tax on the total customer charge. A pending historic designation was not enough.

If the building was listed later, the customer could give the contractor a properly completed exemption certificate and request a refund of the previously paid sales tax. The project was not treated like a contract with an exempt entity unless the customer independently qualified as an exempt school, church, state agency, or similar entity.

Common questions

Did a pending historic designation exempt the work? No.

What if the building was listed later? The customer could provide an exemption certificate and seek a refund.

Were materials exempt on an already listed building? No. The letter kept incorporated materials, equipment, and consumables taxable.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8908L0951A10

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, TX 78774

August 21, 1989

Dear *:

Thank you for your letter of August 11, 1989 concerning restoration
of a building designated as a historical building but not included
in the National Register of Historic Places at the time of the res-
toration.

First, the labor to repair, remodel or restore a building listed
in the National Register of Historic Places is not taxable. The
materials incorporated into the real property, and the equipment
and consumables used by the real property repairman/remodeler are
taxable. The repairman/remodeler cannot claim exemption from
payment of all sales or use tax simply because the building is
listed in the National Register.

These contracts should not be handled like contracts with exempt
entities, unless the customer is an exempt entity such as a
school, church, state agency, etc. Instead, these projects are to
be handled like new construction contracts with nonexempt customers.

In response to your specific question, the real property repair-
man/remodeler should collect tax on the total charge to the
customer if the building is not listed in the National Register at
the time that the work is done. Since the historical designation
is pending, if the building is listed at a later date then the
customer can issue a properly-completed exemption certificate to
the contractor and request a refund of the sales tax previously paid.

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

Please feel free to contact me if you have any additional
questions. You may write me, call toll-free 1-800-531-5441 from
anywhere in the United States or phone 512/463-4685.

Sincerely,
Julie Pesl
Tax Correspondence