Is pressure/power washing a residence or other building before painting (or to remove graffiti) subject to Texas sales tax?

Plain-English summary

A power-washing company (Company A) that mounts a high-pressure washer on a truck and uses it to clean residences and other buildings before painting asked the Comptroller how sales tax applies to its washing charges. Company A sometimes contracts to paint the residence itself after washing it, and sometimes only does the washing while a separate painter (or the homeowner directly) hires the painting out to someone else.

The Comptroller held that pressure/power washing any building -- residential or nonresidential -- is a taxable real property service under Rule 3.356(a)(7). How that plays out depends on the contracting arrangement. If Company A washes a house under a direct contract with the homeowner, it must collect tax on the full charge. If a separate painter hires Company A to wash a building before painting it, Company A must also collect tax from the painter on that charge -- the painter is consuming the washing service (using it up in the process of painting), not reselling it to the painter's own customer, so no resale certificate can be used.

The one carve-out: if Company A itself contracts to paint the residence and also does the pressure washing as part of preparing for that same job, the washing is not taxable, because Company A is consuming its own service rather than selling a separate service to a customer. If Company A washes the whole house but paints only part of it, the two services must be separately stated, with tax collected only on the washing portion (painting labor itself is not taxable); if the charges aren't separately stated, the whole lump sum is taxable unless Company A can show the washing was 5% or less of the total charge.

Note on the title: the stub's inherited heading references washing "to remove graffiti," but the ruling text itself only discusses pressure washing performed before painting -- graffiti removal is not mentioned anywhere in the body. The subject title above has been adjusted to reflect what the letter actually addresses.

What this means for you

Power-washing / pressure-washing businesses

Your washing charges are taxable real property service charges under Rule 3.356(a)(7) in virtually every case where you're selling the washing service to someone else -- a homeowner or a painting contractor. The only way to avoid charging tax on the washing is to be the one performing the paint job on that same property, so that the washing becomes part of your own consumption rather than a sale.

Painting contractors who subcontract washing

If you hire a separate company to pressure wash a surface before you paint it, you owe sales tax on that washing charge and cannot give the washing company a resale certificate -- you're consuming the washing service in your own operation, not reselling it as a distinct item to your customer.

Contractors who do both painting and washing on the same job

Separately state your painting labor (nontaxable) from your washing charge if you're washing more of the building than you're painting, and collect tax only on the washing portion. If washing and painting are billed as one lump sum, the whole amount is taxable unless you can document that washing made up 5% or less of the total.

Common questions

Q: If I pressure wash a customer's house and also paint it under the same contract, do I owe tax on the washing?
A: No. If you're the one doing both the washing and the painting on that job, the washing is not separately taxable -- you're consuming your own service rather than selling it.

Q: I only do pressure washing, and a painter hires me to wash a house before painting it. Do I charge the painter tax?
A: Yes. You must collect tax from the painter on the washing charge. The painter cannot give you a resale certificate because the painter is consuming your washing service, not reselling it separately to their customer.

Q: What if I wash the whole exterior of a house but only paint part of it?
A: You're selling a mix of taxable (washing) and nontaxable (painting labor) services. Separately state and tax the washing charge. If you don't separate the charges, the entire lump sum becomes taxable unless you can prove the washing was 5% or less of the total.

Q: Does this ruling say anything about removing graffiti?
A: No. Although the stub's original heading referenced graffiti removal, the ruling text itself only addresses pressure washing performed to prepare a building for painting.

Citations and references

Statutes/Rules:

• 34 Tex. Admin. Code § 3.356(a)(7) (Real Property Services — pressure/power washing of buildings as a taxable real property service)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9205L1172D01

Original ruling text

May 18, 1992

Dear Mr. **:

Thank you for your recent letter, concerning the taxability of pressure washing
residences prior to painting. As I understand it, Company A has a high-pressure
washer mounted on a truck. The washer is used to clean various surfaces,
including residences, prior to painting. In some situations, Company A
contracts to paint the residence in addition to pressure washing it. In others,
a third party paints the residence and Company A only does the pressure
washing.

Pressure washing any building (residential or nonresidential) is a taxable real
property service. Please refer to Section (a)(7) of Rule 3.356, Real Property
Services. If Company A pressure washes a residential building under a contract
with a homeowner, it must collect tax on the total charge. Likewise, Company A
must collect tax from a painter when the painter contracts for Company A's
services to pressure wash the building before it can be painted. Company A may
not accept a resale certificate from the painter because the painter is
consuming the pressure washing service rather than reselling it to his or her
customer.

If Company A enters into a contract to paint a residence, and Company A also
pressure washes the surface prior to painting, the pressure washing is not
taxable. In this situation, Company A is consuming it's own service rather than
selling it to a customer.

If Company A enters into a contract to pressure wash the entire house but paint
only a portion of it, (e.g. A contract to paint one exterior side but clean the
whole exterior), then Company A is selling a combination of taxable and
nontaxable services. Company A should separate the pressure washing service
from the painting and collect tax on the charge for pressure washing. The labor
to paint a residence is not taxable. If Company A contracts to paint a house
for a lump-sum, Company A should pay tax on the materials at the time of
purchase. Under a contract separately stating labor and materials, Company A
may issue a resale certificate for the materials in lieu of paying tax to
supplier. Company A must collect tax on the materials billed its customer.) If
Company A does not separately bill for the pressure washing service, the entire
charge is subject to tax unless Company A can prove that the pressure washing
constituted 5% or less of the lump-sum charge for painting and pressuring
washing.

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

If you have any questions or need additional information, you may call toll
free 1-800-252-5555 Ext. 50037 or the regular Austin number is 512-475-0037.
You may also write to Tax Administration Division.

Sincerely,

Lindey Osborne
Tax Administration Division

April 20, 1992

Texas Comptroller
Of Public Account
111 E. 17th Street
Austin, Texas 78774-0100

Dear Sir or Madam:

A business owner request information about the tax status of certain
activities. The owner operates a power washer, which is a high pressure pump
mounted on a truck. The pump shoots out a stream of water used to clean various
surfaces. The owner's question involves the use of the power washer when
preparing residences for painting or other remodeling. In this circumstance, is
the amount charged for power washing subject to tax when the business owner
also performs the painting or other remodeling? Alternatively, when power
washing is used to prepare a residence for painting or other remodeling, but a
party other than the business owner performs the painting or other remodeling,
is the amount charged for power washing subject to tax?

If you have any questions about the requested information, please feel free to
telephone me at *****.

Very truly yours,