Ezel / Tax Rulings / TX
TX 9003L0984F01 Sales and/or Use Tax (State,Local,MTA) 1990-03-07

Was window-replacement labor taxable when work was limited to student dorm rooms inside a building used for both residential and commercial purposes?

Short answer: No, if the residential labor was separately identified and documented. Materials remained taxable. Without records showing that the work was confined to dorm rooms, the mixed-use project could be treated as fully taxable.

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This page answers the general question as of 1990. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1990
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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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

Repair or remodeling work on real property used for both residential and commercial purposes was taxable in full unless labor for the residential portion was separately identified.

Here, the contractor replaced windows only in student dorm rooms. The separately stated labor charge was not taxable, but the materials charge remained taxable. The contractor had to keep records proving that the work was limited to residential areas; without them, an audit could treat the work as taxable.

Common questions

Was the dorm-room window labor taxable? No, when separately identified.

Were the window materials taxable? Yes.

Why were records important? They verified that the work occurred only in residential areas.

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, TEXAS 78774

March 7, 1990

Dear **:

We received your letter, questioning the taxability of window
replacements in student dorm rooms. The charge to repair, re-
store, or remodel real property which is used for both residen-
tial and commercial purposes is taxable in total unless the
labor on the residential portion is separately identified.

According to your letter, you replaced glass windows in the **
Center Tower, which is used both for commercial business and
residential dorm rooms. You said that you replaced windows only
in the student dorm rooms. A separate labor charge for replacing
windows in the student dorm rooms is not taxable. However, the
materials charge to the customer is still taxable.

Documentation must be maintained to verify that the work is only
on residential areas. Without such documentation, the work may be
considered taxable in event of an audit. See Rule 3.357, relating
to real property repair and remodeling, subsection (b)(7).

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

If you have any questions you may call or write Tax
Correspondence. You may call toll free 1-800-252-5555, or our
regular number is 512/463-4600. My extension is 3-4658.

Sincerely,
Sherry Buckley
Tax Correspondence

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