Is labor to repair or remodel a building listed on the National Register of Historic Places exempt from Texas sales tax?

Plain-English summary

A contractor asked about the sales tax exemption for labor to repair or remodel a specific property that the Comptroller confirmed is located within the boundaries of a historic district (the WestEnd District) listed on the National Register of Historic Places. The Comptroller's answer: the contractor may accept an exemption certificate instead of collecting Texas sales tax on the labor charge for repairing or remodeling the building. The materials used in the job, however, are not covered by this exemption and remain fully taxable.

What this means for you

Contractors working on historic properties

Before assuming a repair/remodel job on a historic building is entirely tax-exempt, split your billing: labor on a National Register-listed building can be accepted tax-free with a properly completed exemption certificate, but materials you supply are taxed as usual. Confirm the specific property is actually within the boundaries of a listed historic district or individually listed — the Comptroller here specifically verified the property's location against the National Register's own published boundaries.

Accountants and tax professionals

This is a narrow, materials-vs-labor exemption — don't extend it to the full contract price. It only applies to buildings that are actually registered (or within a registered district's boundaries), so verification against the National Register is a necessary first step, as it was here.

Common questions

Q: Is repair/remodeling work on a historic building tax-exempt in Texas?
A: The labor portion can be exempt with a properly completed exemption certificate if the building is listed on (or within the boundaries of a district listed on) the National Register of Historic Places. Materials remain taxable.

Q: Does the exemption cover materials used in the historic-building repair?
A: No — materials are not exempt from Texas sales tax under this ruling.

Q: How does the Comptroller confirm a building qualifies?
A: In this letter, the Comptroller independently researched the National Register's website to confirm the specific property fell within a listed historic district's boundaries.

Q: Can another contractor rely on this letter for a different historic property?
A: Only the taxpayer this letter was issued to can use it for detrimental reliance, and the answer is based on the specific property and facts presented — verify your own property's registration status independently.

Citations and references

No specific Tax Code section or Comptroller rule number is quoted in this letter; the exemption is described by reference to the building's listing on the National Register of Historic Places.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9911862L

Original ruling text

November 3, 1999

FAX **

Dear **:

Thank you for your recent fax regarding exemption on labor to repair or remodel
a building listed on the National Registry of Historical Places.

I researched the website for the National Registry, and found the WestEnd
District is listed, and the property in question, **, is within the
boundaries designated in the Registry.

You may accept an exemption certificate in lieu of collecting Texas sales tax
on a charge for labor to repair or remodel a building listed in the National
Registry of Historic Places. Materials are not exempt from Texas sales tax.

This opinion is based on the facts presented. Additional or different facts
may yield different results.

You may call me toll free 1-800-531-5441, extension 5-9787, if you have any
questions or need more information. The direct line is 512/305-9787. You may
also write to Tax Policy Division, Comptroller of Public Accounts.

Sincerely,

Philip Knisely
Tax Policy Division