Does a maid who cleans houses need to collect Texas sales tax on her charges, and does the new small-business exemption for lawn care/landscaping apply to housecleaning?

Plain-English summary

A person running a small housekeeping business wrote to the Comptroller asking about sales tax on her housecleaning charges. The Comptroller's response covered two distinct points:

The new small-business exemption for lawn care doesn't cover housecleaning. Effective July 1, 1995, a self-employed person earning $5,000 or less in total receipts over the most recent four calendar quarters is exempt from collecting sales tax on lawn care and landscaping services. But that exemption is written narrowly to cover only lawn care and landscaping, as defined in Texas Tax Code Sec. 151.0048(1) and (2). Building or grounds cleaning, janitorial, or custodial services are defined separately, under Sec. 151.0048(4), so the new exemption does not apply to housecleaning — regardless of how little the cleaner earns.

But an individual maid working alone may not need to collect sales tax anyway — for a different reason. Under 34 Tex. Admin. Code Rule 3.356(a)(7), a maid employed by a private household to provide domestic services for the benefit of that household is treated as an employee of the household for sales tax purposes, not as a service provider selling a taxable service. So a single individual who cleans houses alone does not collect sales tax on her charge to the homeowner. By contrast, someone who works with partners or employees, or who subcontracts work out to other people to clean houses, is selling a taxable cleaning service and must collect sales tax on those charges.

The letter also notes that an individual maid working alone should contact the Comptroller's office so any existing sales tax permit can be closed out, since it isn't needed for that kind of one-person household service work.

What this means for you

Individuals who clean houses alone, with no employees or subcontractors

You're treated as an employee of the household for sales tax purposes under Rule 3.356(a)(7). You do not need to collect sales tax on your charges to the homeowner, and if you have a sales tax permit solely for this activity, you may want to contact the Comptroller to have it closed.

Housecleaning businesses with partners, employees, or subcontractors

You are selling a taxable cleaning service and must collect sales tax on your charges — the household-employee treatment in Rule 3.356(a)(7) only applies to a person working alone.

Small self-employed service providers looking at the 1995 $5,000 exemption

Don't assume the new small-business exemption for lawn care and landscaping services extends to other real-property services. It's limited strictly to lawn care and landscaping under Tax Code Sec. 151.0048(1)-(2); cleaning, janitorial, and custodial services fall under the separate Sec. 151.0048(4) category and are not covered.

Common questions

Q: Does the $5,000 small-business exemption for lawn care and landscaping also cover housecleaning services?
A: No. That exemption, effective July 1, 1995, is limited to lawn care and landscaping services as defined in Tax Code Sec. 151.0048(1) and (2). Cleaning, janitorial, and custodial services are defined separately under Sec. 151.0048(4) and are not covered.

Q: Does an individual maid who cleans houses alone need to collect sales tax?
A: No. Under Rule 3.356(a)(7), a maid employed by a private household to provide domestic services is treated as an employee of the household, not as someone selling a taxable service.

Q: What if the housecleaner has employees or subcontractors?
A: Then the household-employee treatment doesn't apply — a person who works with partners, employees, or contracts with others to clean houses is selling a taxable cleaning service and must collect sales tax.

Q: What should an individual maid working alone do about an existing sales tax permit?
A: The letter invites the taxpayer to contact the Comptroller's office so it can close out a sales tax permit that isn't needed for one-person household cleaning work.

Q: Can I rely on this letter for my own housecleaning business?
A: No. This opinion is based on the facts submitted, and other facts, though similar, may yield different results; it can only be the basis of detrimental reliance for the taxpayer it was issued to.

Citations and references

Statutes and rules:

• Texas Tax Code Sec. 151.0048(1) and (2) (lawn care and landscaping services definition/exemption)
• Texas Tax Code Sec. 151.0048(4) (building or grounds cleaning, janitorial, or custodial services)
• 34 Tex. Admin. Code Rule 3.356(a)(7) (maid employed by a private household to provide domestic 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/9601L1386B06

Original ruling text

January 5, 1996

Dear ****:

Thank you for your letter concerning your small housekeeping business.

The July 1, 1995 exemption for lawn care and landscaping services by a
self-employed person who earns no more than $5,000 in total receipts during
the most recent four calendar quarters does not apply to real property
cleaning services. The legislation was specifically limited to lawn
care and landscaping services as defined in Texas Tax Code Sec. 151.0048(1)
and (2). Building or grounds cleaning, janitorial, or custodial services
are defined in Sec. 151.0048(4). Therefore, the new exemption does not
apply to cleaning services. However, you may not need to collect sales
tax on the payment from a household to clean a house. See enclosed Rule
3.356(a)(7) concerning a maid employed by a private household to provide
domestic services for the benefit of the household.

We consider a person who works alone (i.e., an individual) cleaning houses
as an employee of the household for sales tax purposes. An individual
maid would not collect sales tax on his or her charge to a homeowner to
clean a house. On the other hand, a person who works with partners,
employees, or who contracts with other persons to clean houses is selling
taxable cleaning services. If you are an individual maid who works alone
for a household, please contact us so that we can close out your sales
tax permit.

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 Policy, Comptroller of
Public Accounts.

Sincerely,

David Somerville
Tax Policy Division

NOTE: Previous Accession Number 9601770L