Texas Sales Tax
🚧 Construction
✅ = Avoiding Sales Tax Collection
❌ = Sales Tax Collection Required
⚠ Keep your receipts showing sales tax paid on purchases ⚠
⚠ Use Tax ⚠
You need to self-assess and pay use tax on items not charged sales tax (out of state purchases)
✅ Residential Lump-Sum Contract: A contractor owes sales tax on all materials, consumable items, equipment, taxable services, and other taxable items that the contractor uses or incorporates into the customer’s property.
The contractor must not collect sales tax from its customer on the lump-sum price. Id. A lump-sum contract is one in which the agreed contract price is one lump-sum amount and in which the charges for incorporated materials are not separate from any charges for skill and labor, including fabrication, installation, and other labor that the contractor performs.
❌ Residential Separately Stated Contract: Under a separated contract (i.e., one that states a charge for labor and a separately-stated charge for materials), the contractor is the retailer of the materials and may issue a resale certificate to suppliers at the time of purchase.
The contractor would then be responsible for collecting sales tax on the agreed contract price of materials that are incorporated into the realty.
In addition, the separately stated contractor labor charge is not taxable for new construction projects or for residential repair and remodeling projects. However, the separately-stated labor charge for nonresidential repair and remodel projects is taxable.
🛋 Interior Design + Furniture Purchases
✅ = Avoiding Sales Tax Collection
❌ = Sales Tax Collection Required
⚠ Keep your receipts showing sales tax paid on purchases ⚠
✅ Interior Design Services: A separately stated charge for interior-design services is not taxable.
🏛 Authoritative Guidance
❌ Design Services + Sale of Furniture: A charge for interior design is taxable if it is included in a lump-sum billing for the sale of tangible personal property.
🏛 Authoritative Guidance
❌ Fees based on % Markup of Furniture: A purchasing fee that is based on a percentage of the taxable item is considered mark-up and is subject to sales tax collection.
🏛 Authoritative Guidance
✅ Reimbursed $ For $ on Purchases: A separately-stated fee for locating and purchasing furniture and accessories is not subject to tax if the decorator gets reimbursed by its customer for the exact price of the taxable item without adding a mark-up.
🏛 Authoritative Guidance
✅ Fee That is Based on Hourly Time and/or Complexity of Job: A separately-stated fee for locating and purchasing furniture and accessories is not subject to tax if the decorator gets reimbursed by its customer for the exact price of the taxable item without adding a mark-up.