Was complimentary valet parking hired by a club, individual, or event group subject to Texas sales tax when guests paid no parking fee?

Plain-English summary

The valet company worked temporary special events, private parties, charity functions, and country-club events. It charged the hiring client by employee hour, charged guests no parking fee, collected only occasional tips, usually operated on the client's private property, and owned no parking lots or storage facilities.

The Comptroller still classified the service as taxable motor-vehicle parking. Tax applied whether a group bought parking for its guests or the vehicle owner paid directly. The described arrangement did not qualify as exempt temporary-help service.

What this means for you

Who paid the valet bill and whether the provider owned a lot did not change the service's parking classification. An event host's decision to offer parking free to guests did not make the provider's charge nontaxable.

Common questions

Was the valet service taxable when guests paid nothing? Yes. Did temporary operation on client property matter? No. Was it exempt temporary help? No on the described facts. Were tips the provider's only guest receipts? Yes, but that did not change the result.

Citations and references

• The letter does not identify a numbered statute or administrative rule.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9111L1149D14

Original ruling text

November 25, 1991

Dear **:

Your letter to John Taylor in our ** Audit Office asking
about the taxability of valet services that your business,
**, provides was forwarded to me for response.

The description of the valet parking service that your company
provides is restated below:

** makes valet parking service available to private clubs
(country clubs) for special events, private parties, and charity
functions for charitable organizations. People also call us to perform
valet parking at private parties, special events at any number of
locations on a temporary basis, perhaps say for a one night event such
as an auction party for a large charity group.

In all instances we charge the group that hires us, whether it be a
club, an individual, or a group of some kind, an hourly fee per
man hour provided. Our clients intend ours to be a complimentary
service provided for their patrons, members or guests. No parking fee
is charged by us to the end user of our valet parking service. Our
valet parking drivers collect no money other than occasional tips.
Our employees are paid an hourly wage from the amount we collect from
the client, in addition to any tips they receive.

It may also be important to note that ** usually operates
on the private property of its clients. We own no parking lots or
storage facilities for which fees may be collected.

The valet parking service provided by *** is motor vehicle
parking service whether the service is purchased by a "group" to park
cars for its guests or by the owner of a motor vehicle. The service
is taxable whether the fee is paid by the "group" that purchased the
service or by the owner of the motor vehicle.

It does not appear that the service is exempt as a temporary help
service explained in previous correspondence with your accountant,
**.

This opinion is based on the facts presented. If there are additional
or different facts, the opinion may change.

If we can be of further assistance, please call toll free 1-800-
252-5555. You may also write to Tax Administration Division.

Sincerely,

Jo Ann Deick
Tax Administration Division