Ezel / Tax Rulings / TX
TX 9103L1096B03 Sales and/or Use Tax (State,Local,MTA) 1991-03-14

Did Texas treat apartment and nursing-home common areas as residential real property, and was new-construction labor taxable?

Short answer: Yes, the listed properties and their common-area improvements were residential. Separately stated materials were taxable, but new-construction labor was not.

Apply this to your situation

This page answers the general question as of 1991. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1991
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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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 Comptroller treated condominiums, apartments, duplexes, and nursing homes as residential improvements to real property. Improvements in the common areas of apartments and nursing homes were part of the residence, including new parking lots and retaining walls.

For new construction, separately stated materials charges were taxable and labor charges were not taxable. The answer applied to both residential and commercial new construction as framed in the request.

What this means for you

Under this 1991 letter, a common-area improvement did not lose residential classification merely because residents shared it. Contract billing still distinguished taxable materials from nontaxable new-construction labor.

Common questions

Were condominiums, apartments, duplexes, and nursing homes residential improvements? Yes.

Were apartment and nursing-home common areas part of the residence? Yes.

Which examples did the letter give? Parking lots and retaining walls.

What was taxable in new construction? Separately stated materials charges; new-construction labor charges were not taxable.

Citations and references

The letter did not cite a numbered statute or rule.

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

March 14, 1991

Dear **:

Thank you for your recent letter which is restated in part with responses
below.

Question: Are condos, apartments, duplexes and nursing homes considered
residential?

Response: Condominiums, apartments, duplexes and nursing homes are
considered to be residential improvements to real property.

Question: Are new parking lots and retaining walls at apartments, and
nursing homes considered to be residential?

Response: Improvements located in common areas of apartments and nursing
homes are considered to be part of the residence. That would include parking
lots and retaining walls.

Question: In residential or commercial new construction, is tax due on
materials only?

Response: Separately stated charges for materials are taxable while new
construction labor charges are not taxable.

This opinion is based on the facts you presented. Other facts, though
similar, may yield different results.

If you have questions or need more information, please call our toll-free
number
1-800-531-5441. My direct line number is 512463-4680 [FAX (512)
475-0900]. You may write to me in care of Tax Administration Division.

Sincerely,
Al Van Allen
Tax Administration Division

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