Is installing or removing window tinting/sunshield film on a commercial building taxable, and does it matter whether the building is residential or nonresidential?

Subject

Window Tinting/Sunshield/Film — Adding Or Removing In Existing Commercial Building Or Residential Real Property

Plain-English summary

A taxpayer wrote in asking about the taxability of a service to remove window film from a commercial building. The Comptroller's answer covered both adding and removing window film or tinting.

On existing nonresidential (commercial) buildings -- such as store fronts or office buildings -- adding or removing window film or tinting is treated as repair or remodeling of real property, and the labor is taxable. The letter points to Rule 3.357, which governs nonresidential repair and remodeling services, and the taxpayer must collect tax on the total charge to the customer.

The labor is not taxable if either of two other situations applies: the real property is residential (houses, apartments, etc.), or the work is new construction labor for a new structure.

The letter closes with the Comptroller's standard caveat that the opinion is based on the facts submitted, and different facts could yield a different result.

What this means for you

Window tinting and film installers/removers

If you add or remove window film or sunshield tinting on an existing commercial building -- a store front, office building, or similar nonresidential property -- you must collect sales tax on your total charge to the customer, per Rule 3.357's treatment of nonresidential repair and remodeling labor. If instead you're working on an existing residential property (a house or apartment), or performing new construction labor on a brand-new structure, the labor is not taxable.

Commercial building owners and property managers

Expect to pay tax on the full charge when you hire someone to add or remove window tinting/film on your existing commercial building. This is treated the same as other nonresidential repair and remodeling work.

Accountants and tax professionals

When advising clients on window film/tinting jobs, the key distinctions are (1) residential vs. nonresidential property, and (2) repair/remodeling of an existing structure vs. new construction labor. Only nonresidential repair/remodeling labor -- covered by Rule 3.357 -- is taxable under this letter; residential labor and new-construction labor are not.

Common questions

Q: Is labor to remove window film from a commercial building taxable? A: Yes. Adding or removing window film or tinting on an existing nonresidential (commercial) building, such as a store front or office building, is taxable repair or remodeling labor, and tax must be collected on the total charge to the customer.

Q: Is the same labor taxable on a house or apartment? A: No. The letter states the labor is not taxable if the real property is residential (houses, apartments, etc.).

Q: What about window film work as part of building a brand-new structure? A: Not taxable. The letter excludes new construction labor for a new structure.

Q: What rule governs this treatment?
A: The letter cites Rule 3.357, described as covering nonresidential repair and remodeling services.

Q: Could the answer differ for other facts? A: Yes -- the letter states the opinion is based on the facts submitted, and other facts, though similar, may yield different results.

Citations and references

Rules:

• Rule 3.357 (nonresidential repair and remodeling 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/9609L1438G11

Original ruling text

September 17, 1996

Dear **:

Thank you for your letter concerning the taxability of the service to remove window film on a commercial building.

Adding or removing window film or tinting in existing nonresidential (commercial) buildings such as store fronts or office buildings is considered repair or remodeling of real property and the labor is taxable. See enclosed Rule 3.357 regarding nonresidential repair and remodeling services. You must collect tax on the total charge to the customer. The labor is not taxable if the real property is residential (houses, apartments, etc.) or is new construction labor for a new structure.

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 9609711L