If a moving company damages a customer's furniture and files an insurance casualty claim to cover the repair, is the repair charge still subject to Texas sales tax?

Plain-English summary

This letter carries an official partial-supersession notice — read the flag below before relying on it.

A moving company asked the Comptroller in 1990 how sales tax applied when it repaired customer belongings (furniture, drinking glasses) it had damaged during a move, especially since the company would file an insurance casualty claim to cover the repair cost. The Comptroller's answer: the total charge for repair, restoration, maintenance, or remodeling of personal property is taxable, and there's no exemption just because the mover files a casualty claim with its insurer. The mover had to collect tax on its full charge to the customer, though it could buy materials that actually get transferred to the customer (like paint used in the repair) tax-free via resale certificate — while still owing tax itself on equipment and consumables that aren't transferred. A separate trip charge is untaxed unless it's tied to an actual taxable repair job; if the mover doesn't end up repairing the item, a fee just for looking at it isn't taxable either.

Supersession flag: The Comptroller's STAR system marks this letter as partially superseded as of October 30, 2012, specifically regarding the exemption for personal property damaged along with real property in a natural disaster or other casualty-claim accident. A 1993 law (S.B. 892, adding Tax Code § 151.350) created a new exemption for labor to restore real or personal property damaged in a declared disaster area, replacing a broader exemption that used to sit in the Comptroller's own rules. That disaster-area exemption didn't exist yet when this letter was written in 1990, and it doesn't cover ordinary moving-company damage (which isn't a declared disaster) — but it means this letter's blanket "no exemption, period" framing for casualty-claim-related repairs no longer fully describes current law for actual disaster-area damage.

What this means for you

Moving companies

The core holding likely still applies today: repairing goods you damaged during a move is a taxable repair service, and an insurance casualty claim doesn't change that. Collect tax on your full repair charge, and use a resale certificate only for materials that actually get transferred to the customer.

Anyone dealing with disaster-area property damage repairs

Don't rely on this 1990 letter's framing that there's simply "no exemption" for casualty-claim-related repairs — check current Tax Code § 151.350 and the referenced STAR document 200411975H for the modern disaster-area repair labor exemption, which post-dates this letter.

Common questions

Q: Does filing an insurance casualty claim make moving-damage repairs tax-exempt?
A: No, per this letter — the total repair charge remains taxable regardless of an insurance claim.

Q: Is there any Texas sales tax exemption for repairing storm- or disaster-damaged property?
A: Not addressed in this 1990 letter's original text, but the Comptroller's system flags that a 1993 law (Tax Code § 151.350) later created a disaster-area repair labor exemption — check current guidance rather than relying on this letter for that specific question.

Q: Can a mover buy materials used in a repair job tax-free?
A: Per this letter, yes for materials actually transferred to the customer (via resale certificate) — but the mover still owes tax on equipment and consumables that aren't transferred.

Citations and references

Rules referenced (as they existed in 1990):

• 34 Tex. Admin. Code Rule 3.292(c) (Repair, Remodeling, Restoration, and Maintenance of Tangible Personal Property)

Supersession source:

• Tex. Tax Code § 151.350 (added by S.B. 892, 73rd Legislature, effective 10/01/1993) — disaster-area repair labor exemption
• STAR document 200411975H (current policy on the disaster-area exemption)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9006L1024C13

Original ruling text

STAR SUPERSEDED INFORMATION

Accession No. -
Supersede type - partial
Document superseded on - 10/30/2012
Issue(s) that caused the document to be superseded - exemption
for personal property damaged along with real property as a result
of a natural disaster or other accident for which a casualty claim
could be filed.
Reason(s): Statutory change - S.B. 892 (73rd Legislative Session,
effective 10/01/93) amended Texas Tax Code 151 to add 151.350 to provide
an exemption for labor to restore real or tangible personal property
damaged within a disaster area. Adoption of this provision led to the repeal
of a broader exemption previously provided in Rule 3.357(c)(5) and Rule 3.110(h).
See 200411975H for current policy.

June 1, 1990

Dear *****:

Thank you for your letter dated May 21, 1990 concerning repairs to
personal property, such as furniture and drinking glasses, damaged
by moving companies.

The total charge for repair, restoration, maintenance or remodeling
of tangible personal property is taxable. There is no exemption for
repairs to personal property damaged by a moving company regardless
of the fact that the moving company files a casualty claim with an
insurance company.

There is an exemption for personal property damaged along with real
property as a result of a natural disaster or other accident for
which a casualty claim could be filed. I've enclosed a Tax Practitioner
Bulletin that explains this exemption.

I've also enclosed Rule 3.292 on repair, remodeling, restoration
and maintenance of tangible personal property. Please refer to
section (c) of the rule. You must collect tax on the total charge to
the moving company. You may issue a resale certificate for materials,
such as paint, that are actually transferred to the customer.
You will owe tax on equipment and consumable materials that are not
transferred to the customer.

A trip charge is not taxable unless it is associated with a taxable
repair job. If you do not repair the item, then you do not have to
collect tax on the fee that you charge for information about the item.

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 1-800-252-5555 (ext. 3-4685) from anywhere
in the United States or phone 512/463-4685.

Sincerely,

Julie Pesl
Tax Correspondence