Ezel / Tax Rulings / TX
TX 9003L1038D13 Sales and/or Use Tax (State,Local,MTA) 1990-03-01

Were services by property-management employees taxable when they worked exclusively at one bank and the manager was reimbursed dollar for dollar for salary and benefits?

Short answer: No. Employees permanently assigned to one property were treated as employees of that property when the management company was reimbursed for their salaries; the stated cleaning, repair, and maintenance services were not 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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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

The property-management company's employees performed cleaning, carpentry repair, HVAC repair, and general building maintenance exclusively at one bank.

The bank reimbursed the management company dollar for dollar for the employees' salaries and health benefits. Under those facts, the Comptroller treated the permanently assigned workers as employees of the property, and their services were not taxable.

Common questions

Why were the services not taxable? The workers were permanently assigned to one property and the manager was reimbursed for their salaries, so the letter treated them as that property's employees.

Did the employees work at multiple managed properties? No. The ruling says they worked exclusively at the bank.

What reimbursement did the manager receive? Dollar-for-dollar reimbursement of salaries plus health benefits.

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, TX 78774

BOB BULLOCK
Comptroller

March 1, 1990

Dear *:

I have received your letter concerning your property management company.

** employees provide general cleaning, carpentry repair,
A/C and heating repair and general building maintenance for *
in ****. Your company is reimbursed by the bank on a dollar-for
-dollar basis for these employees' salaries plus health benefits. These
employees work exclusively at the bank.

Employees permanently assigned to one property are considered employees
of that property when the management company is reimbursed for the sala-
ries of these employees. These services are not taxable.

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

Please call toll-free at 800- 531- 5441 if you have any questions. Our
regular number is 512-463-3830.

Sincerely,
Larry Koenig
Taxability Section
Legal Services Division

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