200712999L


December 6, 2007


To - Nancy Prosser, Tax Policy Area Manager

From - Deborah Riley, Senior Analyst, Sales Tax Section, Tax Policy Area

Subject - Taxability of Power Washing and Similar Services Performed on Certain 
Items of Realty

This memo sets out controlling authority and agency policy relating to the 
taxability of washing, cleaning, power washing or pressure washing improvements 
to realty other than a building, building components/improvements, grounds and 
parking areas/lots (hereafter collectively “certain cleaning services”).  
Examples of the improvements to realty covered by this memo include, but are 
not limited to, tanks exceeding 500 barrels, towers, refinery and chemical 
plant improvements and pipelines (hereafter collectively “certain improvements 
to realty”).

As stated in the relevant language below, Section 151.0048(a)(4) of the Texas 
Tax Code and Comptroller Rule 3.356(a)(7) concerning Real Property Services tax 
janitorial services, including building and grounds cleaning.  

 151.0048(a)(4):  “Real Property Service means building or grounds cleaning, 
janitorial, or custodial services.”

Rule 3.356(a)(7):  “Residential or nonresidential building or grounds cleaning, 
janitorial, or custodial services--The activities of keeping the inside and 
outside premises of a building clean, orderly, and functional, including 
performing minor adjustments, maintenance, or repairs. Examples include, but 
are not limited to: window washing; floor, wall, and ceiling cleaning; 
collection of waste on the premises, whether from inside a building or on the 
grounds; chimney or duct cleaning; lighting maintenance, such as bulb and fuse 
replacement; the cleaning, disinfecting, and restocking of restrooms or lounge 
areas; cleaning or washing sidewalks, parking garages, or parking lots; and 
pool cleaning and maintenance.”

Longstanding policy has held that charges for certain cleaning services to 
certain improvements to realty do not fall under the definition of taxable 
janitorial services as contemplated by Section 151.0048 and Rule 3.356.  See, 
e.g., STAR 8811L0919F08, STAR 9004L1018G08 and STAR 9105T1109G09.  Instead, 
Section 151.0047 and Comptroller Rule 3.357, relating to Real Property Repair 
and Remodeling and quoted in relevant part below, are the controlling 
authorities.  

 151.0047(a): "Real property repair and remodeling means the repair, 
restoration, remodeling, or modification of an improvement to real 
property other than:
		(1)  a structure or separate part of a structure used as 
a residence;       
		(2)  an improvement immediately adjacent to a structure 
described by Subdivision (1) of this section and used in the 
residential occupancy of the structure or separate part of the 
structure by the person using the structure or part as a residence;  
or
		(3)  an improvement to a manufacturing or processing 
production unit in a petrochemical refinery or chemical plant that 
provides increased capacity in the production unit.’

Rule 3.357(b)(2): “All persons who repair, restore, or remodel nonresidential 
real property must collect tax on the total sales price to the customer less 
separately stated charges for unrelated services.”  

The terms “repair”, “restore”, and “remodel” are defined in subsection (a) of 
Rule 3.357.

Rule 3.357(a)(11): “Remodeling or modification--To rebuild, replace, alter, 
modify, or upgrade existing real property.” 

Rule 3.357(a)(12): “Repair--To mend or bring back real property that was 
broken, damaged, or defective as near as possible to its original working 
order.”

Rule 3.357(a)(14): “Restoration--An activity that is performed to bring back 
real property that is still operational and functional but that has faded, 
declined, or deteriorated, as near as possible to its original condition.”

Based on the above authorities, the agency has concluded that charges for 
certain cleaning services to certain improvements to realty are only taxable if 
the service provided includes the repair, remodeling, restoration or 
modification of those improvements as defined by Section 151.0047 or Rule 
3.357.  These cleaning services cannot be considered taxable services, even 
though such services may prevent the decline, failure, lapse or deterioration 
of an improvement to realty.  This rule of taxability is true even when the 
work is not scheduled or periodic.  In fact, whether a service is “scheduled 
and periodic” is only relevant once a service is first determined to be a 
taxable repair, remodel, restoration, or modification of an improvement to 
realty. If a taxpayer can demonstrate that the service qualifies as “scheduled 
and periodic” maintenance of the improvement to realty as defined by Rule 
3.357(a)(7), the service is then no longer taxable.  

For example, cleaning a pipeline may prevent eventual corrosion and 
deterioration or may allow for a new product to be transported, but it does not 
rise to the level of taxable repair, remodeling, restoration or modification.  
However, removing paint, scaling or blockages that cause this same pipeline to 
function in a less than desired manner is considered a taxable repair or 
restoration service under Section 151.0047 and Rule 3.357, unless performed on 
a scheduled and periodic basis as defined by Rule 3.357(a)(7).  

As another example, if a person is hired to steam clean a tank to prevent 
pollutants from causing damage to the tank surface, this cleaning service is 
not taxable.  However, steam cleaning an air conditioning unit that has ceased 
to function properly constitutes a taxable repair or restoration of real 
property under Section 151.0047 and Rule 3.357.

Charges for these certain cleaning services performed on certain improvements 
to realty that are not otherwise taxable as real property services under 
Section 151.0048 and Rule 3.356 become taxable when provided by the same person 
in connection with another taxable service, such as painting or making repairs 
to real property, even if the charges are separately stated to the customer.  
In these situations, the cleaning services are considered incident to the 
taxable service performed and the entire transaction is taxable under Section 
151.007(b).

In order to make clear that this is the agency’s policy, we will partially 
supersede STAR documents 200205254H (Hearing 34,644), 200505255H (Hearing 
42,518), 200607728H (Hearing 45,169), and supersede or partially supersede any 
other documents on STAR containing similar contradictions to this policy.


ACCESSION NUMBER: 200712999L  
SUPERSEDED: N 
DOCUMENT TYPE: L  
DATE: 12/06/2007  
TAX TYPE: SALES