Texas Comptroller of Public Accounts    STAR System


September 26, 2002


Dear **************:

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 
non-qualifying equipment. 

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.


Lindey Osborne
Tax Policy Division

DATE: 09/26/2002