Texas Comptroller of Public Accounts STAR System
September 26, 2002
Thank you for your recent letter regarding the taxability of installation of
new kitchen hoods and associated support equipment. You faxed a copy of a
proposal and needed to know if any sales tax would be applicable. The proposal
states, "Tax exempt with signed resale certificate." As part of the proposal,
there is an exemption certificate claiming the job is exempt because it is
needed to comply with "State and Local Pollution Control Code." Mr. Koller
asked me to respond to your questions.
The proposal or bid shows separate charges for labor and materials. The
materials include exhaust hoods, exhaust fans, rooftop supply fans, ductwork,
electrical control panel, fire blanket, labor, installation, materials, crane,
and permit. The total charge for all the equipment and materials is quoted as a
single amount and there is a separate charge for labor.
Although pollution control equipment used in the manufacturing process is
exempt, exhaust fans and vent hoods have not been considered pollution control
equipment for purposes of Section 151.318(a)(5) . Simply moving smoke or fumes
from inside a structure to the outside is not pollution control. We have no
information indicating that this equipment is required to be used by restaurants
as pollution control equipment either by the Environmental Protection Agency (EPA)
or the Texas Commission on Environmental Quality (TCEQ). Therefore, the exemption
certificate you have been asked to complete would be invalid as written. The total
amount of the proposal would be taxable.
However, some of the equipment listed on the invoice may qualify for exemption
if separately stated and the use or consumption of the property is necessary
and essential to comply with federal, state, or local laws or rules that
establish requirements related to public health. See Texas Tax Code Section
Texas Food Establishment Rules, Section 229.167(h) regarding mechanical
ventilation states, "If necessary to keep rooms free of excessive heat, steam,
condensation, vapors, obnoxious odors, smoke, and fumes, mechanical ventilation
of sufficient capacity shall be provided." A vent hood or exhaust fan and the
related ductwork used in connection with food-processing equipment such as a
grill or fryer qualifies for exemption in Section 151.318(a)(10) if it is
necessary to comply with a rule such as stated above. However, an exhaust fan
and related ductwork removing smoke from a dining area does not qualify because
it is not used during the food processing operation as required by Section
This proposal contains one charge for all materials and equipment. A single
charge for taxable and nontaxable items is taxable. Therefore, the charges for
qualifying equipment should be separately stated from charges for
In addition, the labor to remodel existing nonresidential realty is taxable.
There is no provision in the manufacturing exemptions to exempt the labor
portion of this invoice.
This opinion is based on the facts presented. Other facts, though similar, may
result in different answers.
I hope this information is helpful. I'll be glad to help you if you have
additional questions. You may email your questions to
. My direct line is 512-475-0037. The toll-free
number is 1-800-531-5441, ext. 5-0037.
Tax Policy Division
ACCESSION NUMBER: 200209463L
DOCUMENT TYPE: L
TAX TYPE: SALES