Ezel / Tax Rulings / TX
TX 9004L0996A09 Sales and/or Use Tax (State,Local,MTA) 1990-04-03

Was labor taxable when a company ran customer-provided computer cables through the ceilings of an existing nonresidential building to workstations?

Short answer: Yes. The Comptroller treated the cable-running labor as taxable remodeling of nonresidential real property, even though the installer supplied only labor and did not provide the cable.

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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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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 company supplied labor to run computer cables from a client's computer room through the ceilings to individual workstations in an existing building. The client supplied the cable.

The Comptroller ruled that the labor charge was taxable as remodeling of nonresidential real property under Rule 3.357.

Common questions

Was the cabling labor taxable? Yes.

Did it matter that the installer did not provide the cable? No. The labor itself was taxable remodeling under the facts described.

Source

Original ruling text

April 3, 1990

Dear **:

We received your letter concerning the taxability of labor to
install computer cables in an existing building. According to
your letter, your company provided the labor to run computer
cables from your client's computer room through the ceilings
to individual workstations within the building. Your company
did not provide the cable.

Labor to repair, remodel, or restore non-residential real pro-
perty is taxable. Your charge for the labor to run the computer
cables is taxable as remodeling non-residential real property.
See sections (a)(7) and (b)(2) of the enclosed Rule 3.357 re-
lating to real property repair and remodeling.

This opinion is based on the facts presented. If there are addi-
tional 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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