Is power-washing a restaurant's kitchen vent hood taxable in Texas?

Plain-English summary

A restaurant-services question with a genuinely branching answer: is power-washing a kitchen vent hood taxable? The Comptroller's letter walks through it in two tracks depending on the vent hood's legal character.

If the vent hood is an improvement to realty -- affixed as part of the building's ductwork -- cleaning it is taxable as a real property service under Rule 3.356(a)(7), which covers residential/nonresidential building/grounds cleaning, janitorial, and custodial services. Notably, manufacturers cannot claim a manufacturing exemption for real property services at all, so even a restaurant that qualifies as a "manufacturer" for other exemption purposes gets no help here.

If the vent hood is tangible personal property (not affixed to the building), the analysis depends further on what it's attached to and when the service happened:

• If the vent hood is a component part of exempt cooking equipment (a grill, stove, etc.), cleaning it is exempt -- the manufacturing exemption for equipment extends to component parts and accessories.
• If the vent hood is separate from the cooking equipment, timing matters: effective October 1, 1997, the law changed so manufacturing equipment must cause a chemical or physical change to the product -- and vent hoods don't. Vent hoods also aren't treated as pollution control equipment (no EPA/TNRC requirement identified). So services on or after October 1, 1997 are taxable unless the manufacturer can prove pollution-control-equipment status.
• Before October 1, 1997 (specifically January 1, 1995 through September 30, 1997), services on a stand-alone tangible-personal-property vent hood were exempt if the restaurant was legally required to have the vent hood (a public-health/pollution-control compliance rationale that existed under the pre-1997 rule).
• A manufacturer must give the service provider a properly completed exemption certificate to claim any exemption; the provider keeps it on file.

STAR note preserved in the ruling text: effective October 1, 1999, Tax Code Section 151.318(a)(10) added a new exemption for tangible personal property required to comply with public health requirements, subject to clear-and-convincing proof by the party claiming it -- a later statutory development the letter itself flags as potentially relevant going forward, though it postdates this May 1999 letter's core analysis.

What this means for you

Restaurants and kitchen-equipment service providers

Whether vent hood cleaning is taxable turns on a threshold question you may not have considered: is the hood part of the building (realty) or a piece of equipment (tangible personal property)? That single classification decides which exemption pathway (if any) applies, and stand-alone vent hoods lost their manufacturing-exemption eligibility as of October 1997.

Cleaning/power-washing service providers serving restaurants

Get an exemption certificate on file before treating any vent-hood cleaning job as exempt, and confirm your customer's vent hood genuinely qualifies (component-of-cooking-equipment, or pre-October-1997 legally-required stand-alone hood) rather than assuming exemption.

Accountants and tax professionals

Worth flagging the October 1999 Section 151.318(a)(10) addition (noted in STAR's own annotation) as a potential subsequent-law development for any restaurant client relying on this letter's stand-alone-vent-hood analysis for cleaning services performed after that date -- the letter's own text acknowledges the law kept evolving past its May 1999 issue date.

Common questions

Q: Is cleaning a restaurant's vent hood always taxable?
A: No -- it depends on whether the vent hood is realty (taxable real property service) or tangible personal property, and if the latter, whether it's part of exempt cooking equipment.

Q: Can a restaurant claim a manufacturing exemption for vent hood cleaning if the hood is part of the building?
A: No. Manufacturers cannot claim exemption for real property services at all, regardless of equipment status.

Q: Did the rules for stand-alone vent hoods change over time?
A: Yes -- services were potentially exempt (if legally required) from January 1995 through September 1997, then became taxable starting October 1, 1997 once equipment had to cause a chemical/physical change to qualify.

Q: Can I rely on this letter for my own restaurant?
A: No. It is based on the specific facts presented and can only be relied on by the taxpayer to whom it was issued.

Citations and references

Statutes and rules:

• 34 Tex. Admin. Code Rule 3.356(a)(7) (real property services -- building/grounds cleaning)
• 34 Tex. Admin. Code Rule 3.295 (manufacturing exemption; definition of processing)
• 34 Tex. Admin. Code Rule 3.300 (manufacturing exemption)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9905450L

Original ruling text

May 27, 1999

Dear **:

Thank you for your question concerning the power washing of vent hoods for
restaurants.

IMPROVEMENT TO REALTY
The taxability of power washing vent hoods for restaurants depends on several
factors. If the vent hoods are improvements to realty (e.g., vent hood is
affixed as part of the duct work of the building), the service to clean the
vent hood is taxable as a real property service. Residential or nonresidential
building or grounds cleaning, janitorial, or custodial services are taxable
services as explained in Rule 3.356(a)(7) on real property services.
Manufacturers may not claim exemption for real property services.

TANGIBLE PERSONAL PROPERTY
Services to vent hoods that are tangible personal property rather than
improvements to realty may qualify for exemption depending on the
circumstances. If the vent hood is a component part of exempt cooking
equipment (e.g., grill, stove, etc.), then services to clean the vent hood
qualifies for exemption. The exemption for services to manufacturing equipment
that is tangible personal property extends to the component parts and
accessories of the equipment.

If the vent hood is separate from the cooking equipment and is tangible
personal property, the answer depends on whether the service was performed
prior to October 1, 1997 or after. Effective October 1, 1997, the sales tax
law was amended such that machinery and equipment must cause a chemical or
physical change to the product being manufactured. Vent hoods do not cause a
chemical or physical change to the product. Although pollution control
equipment used during the manufacturing process is still exempt, vent hoods
have not been considered pollution control equipment. We have no information
indicating that vent hoods for restaurants are required as pollution control
equipment either by the Environmental Protection Agency (EPA) or the Texas
Natural Resources Commissions (TNRC).

Prior to October 1, 1997, items used in manufacturing to satisfy or comply with
requirements of law or regulations for public health or pollution control
purposes qualified for exemption. Services performed on or after January 1,
1995 and prior to October 1, 1997 on vent hoods that are tangible personal
property are exempt if the restaurant is required by law or regulation to have
the vent hoods. Effective October 1, 1997, the law changed and unless a
manufacturer can prove to the Comptroller's office that the vent hoods qualify
as pollution control equipment, no exemption is applicable under the current
law. [STAR NOTE: Effective 10/01/99, Section 151.318(a)(10) was added to provide
an exemption relating to tangible personal property required to comply with
public health requirements, subject to clear and convincing evidence provided by
the party claiming exemption.]

A manufacturer must give a properly completed exemption certificate to claim
exemption for services to machinery and equipment that qualify for exemption.
The service provider keeps the certificate in his records to document the
claimed exemption by the manufacturer.

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

cc: **