I own a residential remodeling business in texas . What am I charging for sales tax or am I?
1 reply
Jun 8, 2020
The answer is found here: https://comptroller.texas.gov/taxes/publications/94-116.php
Essentially, it depends on the type of contract you have for the project. This is from the above publication from the Texas Comptroller:
Residential Repair and Remodeling
When you repair or remodel residential property, you are a contractor. As a contractor, you may have a lump-sum contract (one price for the entire job). Or, you may have a separated contract (you charge separately for materials and labor). Under a lump-sum contract, you pay tax on all your supplies, materials, equipment, and taxable services when you buy them. You don't charge your customer tax.
Under a separated contract, you give your suppliers resale certificates instead of paying tax on materials you incorporate into the customer's real property, and on certain services if the charges for the services are separately identified to the customer. These services are surveying, landscaping, final cleanup, and security systems that are incorporated into the customer's realty. You then collect state sales tax, plus any local tax, from your customer on the amount you charge for the materials and those services. Your charge for the materials must be at least as much as you paid for them. The construction labor charge is not taxable.
- Joel Pace