Ezel / Tax Rulings / TX
TX 9204L1164F01 Sales and/or Use Tax (State,Local,MTA) 1992-04-06

How did Texas tax coupons, clothing alterations, delivery, property installation and repair, and janitorial services?

Short answer: Tax applied after either coupon discount; clothing alterations, taxable-goods delivery, seller-connected installation, repairs, and janitorial services were taxable. Independent third-party installation not connected with a property sale was not taxable.

Apply this to your situation

This page answers the general question as of 1992. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1992
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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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

Manufacturer and store coupons were cash discounts, so tax applied to the discounted merchandise price, not the coupon face value. Alterations and repairs to new or used clothing were taxable whether separately stated.

Delivery charges for taxable merchandise were taxable, interstate or intrastate. Installation connected with a property sale and all tangible-property repair charges were taxable; independent third-party installation unconnected with a sale was not. Outside janitorial services were taxable on the total charge.

What this means for you

Separately stating charges generally did not change these results. The installation exception was independent work unconnected with a property sale.

Common questions

Were clothing alterations taxable? Yes.

Were delivery charges taxable? Yes when the merchandise was taxable.

Was independent third-party installation taxable? Not when unconnected with a property sale.

Were janitorial services taxable? Yes.

Citations and references

The letter cited no specific statute or rule.

Source

Original ruling text

April 6, 1992

Dear ***:

Thank you for your recent letter asking about the Texas sales and
use tax as it applies to the following situations.

  1. Coupons - discounted from retail sales price:

A. Manufacturers coupons - upon which the retailer will be
reimbursed from the manufacturer.

Response: Texas tax is due on the discounted sales price of the
merchandise. The manufacturers coupon is treated as a cash
discount. Neither the manufacturer nor the customer owe any tax on
the face value of the coupon.

B. Store coupons - in which the sales total reduction is
absorbed by the retailer.

Response: Texas tax is due on the discounted sales price of the
merchandise. The store coupon is treated as a cash discount.
Neither the store nor the customer owe any tax on the face value of
the coupon.

  1. Alterations and repairs to NEW clothes sold at retail and any
    materials included in the finished product, whether the alteration
    fee is separately stated or incorporated in the total sale amount.

Response: The alternation fee is taxable whether or not separately
stated.

  1. Alterations and/or repairs to USED clothing and any materials.

Response: The alteration and/or repair fee is taxable whether or
not separately stated.

  1. Freight, transportation, or other delivery charges whether
    separately stated or included in the invoice total.

A. Interstate.

B. Intrastate.

Response: If the merchandise is taxable, the transportation,
freight, or delivery charges are taxable regardless of whether the
charges are separately stated or the shipment is in interstate or
intrastate commerce.

  1. Installation of, or repairs to tangible property, whether
    separately stated or one total.

Response: A charge to install, or a charge to repair tangible
personal property is taxable regardless of whether or not the
charge is separately stated from the property sold. Installation
(by a third party) not in connection with the sale of tangible
personal property is not taxable. The total charge to repair
tangible personal property is taxable whether the materials and
labor are separately stated or one total price.

  1. Janitorial services provided by outside agencies, whether
    labor is separately stated or included in the total.

Response: I'm not sure I understand this question. Charges for
janitorial services provided by persons in the business of
providing janitorial services are taxable in Texas. If janitorial
services are being provided, and manner in which the customer is
billed by the janitor is not relevant. The total charge is
taxable.

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

If you have any additional questions or need more information, you
may call me toll free at 1-800-252-5555, extension 3-4633. The
regular number is 512/463-4633. You may also write to the Tax
Administration Division.

Sincerely,

Wanda Hutcheson
Tax Administration Division

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