Ezel / Tax Rulings / TX
TX 9005L1023F07 Sales and/or Use Tax (State,Local,MTA) 1990-05-22

Was rebuilding a pedestrian area on the same site new construction or remodeling when the existing area was completely demolished and some dirt removed?

Short answer: It was new construction. The existing pedestrian area between two buildings would be completely demolished, including removal of some dirt, and a new pedestrian area would be built on the same site. The Comptroller treated that reconstruction as new construction rather than remodeling the existing building.

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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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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 existing pedestrian area between two buildings would be completely demolished, including removal of some dirt. A new pedestrian area would then be constructed on the same site.

On those facts, the Comptroller treated the reconstructed pedestrian area as new construction rather than remodeling of the existing building.

Common questions

Was the existing area only partly removed? No. It was to be totally demolished.

Did rebuilding on the same site make it remodeling? No.

How did the Comptroller classify the project? New construction.

Source

Original ruling text

May 22, 1990

Dear *****:

Thank you for your recent letter on demolition and reconstruction of part
of an improvement to realty, a pedestrian area between two buildings.

The current existing pedestrian area will be totally demolished down to
and including the removal of some dirt. After this demolition, a new
pedestrian area will be constructed on the same site.

We will treat the reconstructed pedestrian area as new construction
rather than remodeling of the existing building.

As always, this opinion is based on the facts you submitted. Other facts,
though similar, may yield different results.

Sincerely,

Al Van Allen
Taxability Section
Legal Services Division

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