Could a surveyor buy stakes and other supplies tax-free when performing taxable or nontaxable surveys for exempt entities?

Plain-English summary

The surveyor worked for the state highway department and other tax-exempt entities. Rule 3.356 treated surveying real property as a taxable service.

When performing a taxable survey, the surveyor could give a resale certificate for items transferred to the customer, including stakes, paint, pins, and PK nails. The surveyor still had to pay tax on items used but not transferred, such as deeds, plats, and field books.

When performing a nontaxable survey, the surveyor had to pay tax on every taxable item bought to perform it, including items transferred to the customer.

What this means for you

The customer's exempt status did not make every project input tax-free. The letter distinguished taxable from nontaxable surveys and, for taxable surveys, transferred items from supplies consumed or retained by the surveyor.

Common questions

Could stakes transferred in a taxable survey be bought for resale? Yes.

Could the surveyor buy deeds, plats, and field books tax-free? No, because those items were used rather than transferred.

What about supplies for a nontaxable survey? The surveyor had to pay tax on all taxable items, including transferred items.

Citations and references

• Comptroller Rule 3.356(a)(8) — surveying as a real property service
• Comptroller Rule 3.356(c)(1) — items transferred in a taxable service
• Comptroller Rule 3.285 — resale certificates

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9010L1047F11

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, TEXAS 78774

October 9, 1990

Dear ** :

We received your letter questioning the taxability of supplies you
purchase to be used on surveying work for the State Department of
Highways and Public Transportation and other tax exempt entities.

Surveying of real property, as defined in section (a)(8) of the en-
closed Rule 3.356 relating to real property services, is a taxable
service. If you are performing a taxable survey, then you may is-
sue a resale certificate in lieu of the tax on items that will be
transferred to the customer, such as, stakes, paint, pins, and PK
nails. See section (c)(1) of Rule 3.356. However, you must pay tax
on items you use to perform your survey that are not transferred
to the customer, such as, deeds, plats, and field books. Also, en-
closed is a copy of Rule 3.285 relating to resale certificates.

If you are performing a non-taxable survey, then you must pay tax
on all taxable items you purchase to perform your survey including
items that are transferred to your customer.

This opinion is based upon the facts you presented. If there are
additional or different facts, this 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