Which charges by a moving company for relocating household goods (transportation, packing, boxes, storage, disassembly/reassembly) are taxable in Texas, and which are not?
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This page answers the general question as of 1993. Ezel answers yours, under current Texas tax law, with citations.
Subject
Moving Companies — Which Household-Goods Relocation Charges Are Taxable
Source
- STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
- Opinion: https://star.comptroller.texas.gov/view/9307041L
Plain-English Summary
A company that regularly relocates its employees to, from, or within Texas asked the Comptroller to classify a list of moving-company charges as taxable or exempt. The Comptroller responded by marking each item on the taxpayer's list as exempt/nontaxable (NT) or taxable (T), with a few footnoted exceptions.
Transportation charges — whether billed by weight and miles or by the hour — are exempt if interstate, and nontaxable if intrastate.
Boxes or containers are treated as tangible personal property. The moving company itself owes tax on boxes and similar items it uses to provide the moving service, whether the mover or the customer does the actual packing. If the moving company sells boxes to the customer, the moving company must collect tax on the sales price of those items.
Packing/unpacking labor charges — whether billed by the box or by the hour — are nontaxable, for both interstate and intrastate moves.
Storage is nontaxable for household goods, whether temporary or long-term, but temporary or long-term storage of motor vehicles or furs is taxable. Warehouse handling charges follow the same rule as the underlying storage.
Transportation to/from storage follows special rules: if "transportation in" to storage is part of the overall moving charge it is not taxed, but a separately stated charge for "transportation in" to storage by the moving company is taxed when it's connected with taxable motor-vehicle or fur storage. "Transportation from" storage is part of the sales price of the taxable storage and must be taxed in that case. For all other (non-vehicle, non-fur) items, transportation to or from storage is not taxed.
Disassembly/reassembly of items for transportation — such as waterbeds and swings — is nontaxable, as is disconnecting and reconnecting appliances like washers, dryers, and refrigerators for transportation. This applies to both interstate and intrastate moves.
The letter closes by noting the opinion is based on the facts presented, and that additional or different facts may change the result.
What This Means For You
Moving companies and relocation coordinators can use this letter as a checklist for how to bill and tax various components of a household-goods move: transportation, packing, storage, and appliance/furniture disassembly are generally treated differently, and mixing them into one lump-sum charge versus itemizing them can matter for the "transportation to/from storage" rules described in the letter.
Employers who relocate employees and pay moving companies directly should understand that most of the core relocation services — transportation, packing/unpacking labor, storage of household goods, and appliance disconnection/reconnection — are nontaxable or exempt, but boxes/containers sold to the customer and storage of motor vehicles or furs are taxable.
Accountants and tax professionals advising moving companies should note the footnoted exceptions in the letter: (1) boxes/containers are taxable tangible personal property regardless of who does the packing; (2) storage of motor vehicles or furs is taxable even though storage of other household goods is not; and (3) transportation connected with motor-vehicle or fur storage is taxed differently depending on whether it is a separately stated "transportation in" charge or a "transportation from" storage charge.
Q&A
Q: Are transportation charges for moving household goods taxable in Texas?
A: Interstate transportation charges (by weight/miles or by the hour) are exempt. Intrastate transportation charges are nontaxable.
Q: Does a moving company owe tax on the boxes it uses to pack a customer's belongings?
A: Yes. Boxes or containers are tangible personal property, and the moving company must pay tax on such items used in providing the moving service, whether packed by the mover or the customer. If the moving company sells the boxes to the customer, it must collect tax from the customer on the sales price of those items.
Q: Is storage of household goods taxable?
A: No. Temporary or long-term storage of household goods (other than motor vehicles or furs) is not taxed. Temporary or long-term storage of motor vehicles or furs is taxable.
Q: How is transportation to and from storage taxed?
A: For motor vehicles or furs, if "transportation in" to storage is part of the overall moving charge it is not taxed, but a separately stated charge for "transportation in" to storage is taxed; "transportation from" storage is part of the sales price of the taxable storage and must be taxed. For other items, transportation to or from storage is not taxed.
Q: Is disassembling and reassembling furniture, or disconnecting appliances, taxable?
A: No. The disassembly/reassembly (not repair) of items such as waterbeds and swings for transportation, and the disconnection/reconnection (not repair) of a washer, dryer, or refrigerator for transportation, are both nontaxable.
Q: Can this taxpayer rely on this letter for a different set of facts?
A: No. The letter states the opinion is based upon the facts presented, and that any additional or different facts may change the opinion.
Original ruling text
July 12, 1993
Dear **:
I am responding to your inquiry about the application of Texas sales tax to
sales or services performed when a moving company is hired to pack, load, and
deliver household goods.
You stated that your company constantly deals with employees who are asked to
relocate to, from, or within Texas. You asked that the list you submitted be
marked as taxable or exempt. I have indicated whether the charges by the moving
company to the customer are exempt or nontaxable (NT), or taxable (T). The
exceptions to these general responses are indicated by adding a 1, 2, or 3, to
the NT or T. I have explained these exceptions below.
-
Boxes or containers are tangible personal property. The moving company must
pay tax on such items used in providing the moving service whether packed by
the mover or the customer. If the moving company actually sells moving boxes,
etc., to a customer, the moving company must collect tax from that customer on
the sales price of these items. -
Temporary or long term storage of motor vehicles or furs is taxable.
Temporary or long term storage of other items is not taxed. -
Transportation connected with the temporary or long term storage of motor
vehicles or furs is taxed as part of the sales price of a taxable service. If
the "transportation in" is part of the overall moving charge, it will not be
taxed; however, any separately stated charge for the "transportation in" to
storage by the moving company should be taxed. "Transportation from" storage is
part of the sales price of the taxable storage and must be taxed.
Transportation (to or from storage) connected with the temporary or long term
storage of other items is not taxed.
This opinion is based upon the facts presented. Any additional or different
facts, may change this opinion. You may also write to Tax Administration
Division, Comptroller of Public Accounts.
Sincerely,
Tax Administration Division
Please identify if the services listed below for the relocation of our
corporate employees' household goods to, from or within your state are subject
to tax.
The moving company's Transportation charges (by weight and miles)
INTERSTATE - Exempt
INTRASTATE - NT
The Moving Company's Transportation charges (by the hour)
INTERSTATE - Exempt
INTRASTATE - NT
Carrier supplied containers/boxes (for packing)
INTERSTATE - Exempt
INTRASTATE - T 1
Carrier charges for packing/unpacking (by the box)
INTERSTATE - Exempt
INTRASTATE - NT
Carrier charges for packing/unpacking (by the hour)
INTERSTATE - Exempt
INTRASTATE - NT
Temporary storage of household goods at carrier's warehouse
INTERSTATE - Exempt
INTRASTATE - NT 2
Temporary storage warehouse handling charges
INTERSTATE - Exempt
INTRASTATE - NT 2
The Moving Company's delivery charges to/from temporary storage
INTERSTATE - Exempt
INTRASTATE - NT 3
Long term (or permanent) storage of household goods at carrier's warehouse
INTERSTATE - NT 2
INTRASTATE - NT 2
Long term (or permanent) warehouse handling charge
INTERSTATE - NT 2
INTRASTATE - NT 2
Delivery to/from long term (or permanent) storage
INTERSTATE - NT 3
INTRASTATE - NT 3
The disassemble/reassembly (not repair) of waterbeds, swings, etc. for
transportation
INTERSTATE - NT
INTRASTATE - NT
The disconnection/reconnecting (not repair) of washer, dryer, refrigerator,
etc. for transportation
INTERSTATE - NT
INTRASTATE - NT
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