Is a business's total charge to etch glass items (such as awards or motor vehicle windows), including labor, subject to Texas sales tax?

Plain-English summary

A taxpayer asked the Texas Comptroller's Tax Administration Division whether charges for etching glass items are subject to sales tax. The Comptroller (David Somerville) answered that when a business etches glass items, its total charges — including labor — are taxable to the customer, because etching is processing or fabricating tangible personal property. That processing or fabrication labor is taxable as graphic art.

The letter confirms the taxpayer was correct to collect sales tax on the total charge to etch an award by sandblasting it, and gives a second example: etching glass on a motor vehicle for theft protection is also taxable graphic art. The Comptroller pointed to Rule 3.312 (graphic art) and Rule 3.300 (manufacturing, fabricating, and processing of tangible personal property) as the governing rules, and noted the opinion is based on the facts submitted — other, similar facts could yield a different result.

What this means for you

Business owners who etch glass (awards, trophies, vehicle windows, etc.)

If you etch glass items for customers — whether by sandblasting an award or etching a vehicle window for theft protection — your total charge to the customer, including your labor, is taxable. You should be collecting Texas sales tax on the full invoice amount, not just on materials.

Accountants and tax professionals

Glass etching is treated as taxable graphic art under Rule 3.312, and separately falls under the general fabrication/processing rule, Rule 3.300, because it changes tangible personal property. Labor charges are not exempt or separately non-taxable here — they're part of the taxable fabrication charge.

Common questions

Q: Do I owe tax only on the materials used to etch glass, or on the whole job including labor?
A: On the whole job. The Comptroller states that "total charges (including labor)" for etching glass items are taxable to the customer.

Q: Is sandblast-etching an award taxable?
A: Yes — the letter specifically confirms the taxpayer was correct to collect sales tax on the total charges to etch an award by sandblasting it.

Q: What about etching a vehicle window for theft-deterrent purposes?
A: The letter treats that as another example of taxable graphic art, taxed the same way as other glass etching.

Q: Why is etching taxable — what legal basis does the Comptroller cite?
A: The letter cites Rule 3.312 (graphic art) and Rule 3.300 (manufacturing, fabricating, and processing of tangible personal property), treating glass etching as taxable fabrication/processing of tangible personal property.

Citations and references

Regulations:

• 34 Tex. Admin. Code Rule 3.312 (Graphic Arts or Related Occupations)
• 34 Tex. Admin. Code Rule 3.300 (Manufacturing, Fabricating, and Processing)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9506L1351G02

Original ruling text

June 15, 1995

Dear **:

Thank you for your question regarding the taxability of etching glass items.

When you etch glass items, your total charges (including labor) are taxable
to the customer because you are processing or fabricating tangible personal
property. The processing or fabrication labor is taxable as graphic art. You
are correct to collect sales tax on the total charges to etch an award by
sandblasting it. The etching of glass on a motor vehicle for theft protection
is another example of taxable graphic art. See enclosed Rule 3.312 regarding
graphic art and enclosed Rule 3.300 concerning the manufacturing, fabricating,
and processing of tangible personal property.

This opinion is based on the facts you submitted. Other facts, though similar,
may yield different results.

You may call me toll free at 1-800-531-5441, ext. 5-0030. The direct line is
512/475-0030. You may also write to Tax Administration, Comptroller of
Public Accounts.

Sincerely,

David Somerville
Tax Administration Division

NOTE: Previous Accession Number 9506186L