Was a building-attendant service that checked equipment and called employees about problems taxable as Texas security service?

Plain-English summary

A building-attendant service checked systems at businesses operating around the clock. It turned off electrical equipment accidentally left on and monitored boilers, computers, and wastewater-treatment plants. When it found a problem, it did not repair it; it called the appropriate employee.

The provider had contacted the Board of Private Investigators and Private Security Agencies and was told it did not need that agency's license. The Comptroller therefore concluded that the work was not taxable security service under Rule 3.333.

What this means for you

Monitoring and attendant businesses

The result depended on the limited duties and the licensing determination. Adding guarding, alarm response, repair, or other functions could change the classification.

Accountants and tax professionals

Keep licensing correspondence and service descriptions. The Comptroller expressly relied on the fact that no security-agency license was required.

Common questions

Did the attendant repair broken systems? No.

What did the attendant do after finding a problem? It notified the appropriate company employee.

Was the service taxable as security service? No, on these facts.

Citations and references

• 34 Tex. Admin. Code Rule 3.333 (security services)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9202L1161D04

Original ruling text

February 5, l992

Dear **:

Thank you for your recent letter concerning your "Building
Attendant Service."

According to your letter, you "check all systems in businesses
that operate 24 hours." You turn off electrical equipment that is
accidentally left on. You also check and monitor systems that run
constantly such as boilers, computers, and waste water treatment
plants. If something is wrong, you do not repair or correct the
problem. You use a call list to notify the proper company
employee.

You stated in our telephone conversation today that you have
contacted the Board of Private Investigators and Private Security
Agencies about your services and are not required to have a
license issued by that agency. Your services, therefore are not
taxable security services. See Rule 3.333-Security Services.

This opinion is based on the facts that 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 about by response. You may write me, call toll free
1-800-252-5555, ext. 34685, from anywhere in the United States or
phone (512) 463-4685.

Sincerely,

Julie Pesl
Tax Administration Division