How did Texas tax window- and door-screen installation on new, residential, and existing nonresidential property?

Plain-English summary

Texas treated window and door screens as permanent improvements to real property. Contractor rules applied to installation in new or unfinished structures, residential property, and new additions. Labor was not taxable in those situations. On a separated contract, the installer collected tax on the agreed material price; on a lump-sum contract, the installer charged no tax to the customer and paid tax on materials when purchased.

For an already existing nonresidential structure, installing new screens or repairing, remodeling, or restoring screens was taxable repair and remodeling. The installer had to collect tax on the total customer charge.

What this means for you

The property's status and contract form controlled the result described in this letter. Residential and new-construction work followed contractor rules, while work on existing nonresidential property was taxed as repair and remodeling.

Common questions

Were screen installations treated as real-property work? Yes. The letter called window and door screens permanent improvements to real property.

Was labor taxable on new or residential installations? No under the listed contractor situations.

How were materials handled on a separated contract? The installer collected tax on the agreed contract price for materials.

What about a lump-sum contract? The installer paid tax on material cost and did not charge the customer tax.

Was work on existing nonresidential property taxable? Yes. The total charge for the listed repair and remodeling work was taxable.

Citations and references

• 34 Tex. Admin. Code Rule 3.291 — contractors.
• 34 Tex. Admin. Code Rule 3.357 — real-property repair and remodeling.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9103L1096A13

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

JOHN SHARP March 28, 1991
Comptroller

Dear *****:

Thank you for your letter concerning installation of window and
door screens on residential and commercial properties.

Window and door screens are considered permanent improvements to
real property. You are considered a contractor and subject to the
provisions of Rule 3.291-Contractors (copy enclosed) in the
following situations.

• installing window and door screens in new structures
• installing window and door screens in unfinished struc-
  tures prior to initial occupancy
• installing window and door screens in residential
  property including homes, apartments, nursing homes,
  and retirement centers (but not hotels)
• installing window and door screens in new additions to
  existing structures

Your labor is not taxable in the situations listed above. If you
charge separate amounts for materials and labor, you must collect
sales tax on the agreed contract price of materials. If you have
a lump-sum contract with your customer, you will not charge tax to
your customer. You must pay sales or use tax on the cost of
materials at the time of purchase.

The labor to repair and remodel nonresidential real property is
taxable. You must collect tax on the total charge to your
customers in these situations.

• installing new screens in an already existing
  nonresidential structure
• repairing, remodeling, or restoring screens in a
  nonresidential structure

Rule 3.357 on real property repair and remodeling is enclosed for
your review also.

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 from
anywhere in the United States or phone 512/463-4600.

Sincerely,
Julie Pesl
Tax Administration Division