Ezel / Tax Rulings / TX
TX 9009L1047A03 Sales and/or Use Tax (State,Local,MTA) 1990-09-27

Was labor for a scheduled recurring turnaround on functioning real property at a chemical plant taxable?

Short answer: No. The Tax Policy Committee treated periodic recurring turnaround work on functioning real-property improvements as nontaxable maintenance labor.

Apply this to your situation

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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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

A chemical plant performed "turnarounds" every two years on real property at its facility.

The Comptroller's Tax Policy Committee classified work on functioning improvements to realty during a scheduled, periodic, recurring turnaround as real-property maintenance. The labor was not taxable, and the taxpayer should provide service providers with exemption certificates under Rule 3.357(c)(2).

What this means for you

The result depended on the work being scheduled, periodic, recurring maintenance of functioning real-property improvements. The letter did not describe a broken asset or a one-time reconstruction project.

Common questions

Was the turnaround labor taxable? No.

How was the work classified? As maintenance of real property.

What documentation did the taxpayer provide? Exemption certificates to its service providers.

Citations and references

  • Comptroller Rule 3.357(c)(2) — real-property repair and remodeling

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

September 27, 1990

Dear **:

Thank you for your recent letter concerning the taxability of
"turnarounds" performed every two years on real property located
at your La Porte chemical plant.

The Comptroller's Tax Policy Committee has decided that the type of
work performed on functioning improvements to realty during a sched-
uled, periodic, recurring "turnaround" will be considered maintenance
of real property. The labor to maintain real property is not taxable.

You should provide your service providers with exemption certifi-
cates in order to claim this exemption from tax. Please refer to
section (c)(2) of the enclosed Rule 3.357 on real property repair
and remodeling.

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

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