Special offer

Texas Stagers and Sales Tax - new info from the State published

By
Home Stager with Round Rock Home Stager Austin Home Staging

The State of Texas published a short article on how Sales and Use Tax applies to Home Stagers.  Many of the local Stagers have been bending the rules for years.  But it seems the Comptroller of Public Accounts has taken notice of our existence and incorporated some guidlines into their October 2008 E-newsletter.

As the article is fairly short and to the point, Here is the full text:

-------------------------------------------------------------------------------------------------------------------------------

From Tax Policy News, a publication of the State of Texas Comptroller of Public Accounts

SALES TAX

Home Stagers Home stagers prepare homes for sale by transforming them into products that appeal to potential buyers. Generally, home stagers are hired by home builders, but are also hired by homeowners or realtors to enhance homes for sale.

Staging focuses on improving a property by reducing the home's flaws, depersonalizing, uncluttering, cleaning, rearranging items and landscaping. For vacant homes, rental furniture is used to create a living space the prospective buyers can "see" themselves in. Additionally, they may perform minor repair or remodeling.

The tax consequences of a home stager's activities are:

  • Depersonalizing - This involves removal of personal photos, awards, certificates and cultural items to downplay the presence of current homeowners. This is a nontaxable service.
  • Uncluttering - Sometimes referred to as decluttering, uncluttering involves removing non-essential items to minimize crowding and clutter. For example, small appliances are packed, cupboards are emptied, closets and bookshelves are pared down, and furniture is removed or rearranged. This is a nontaxable service.
  • Landscaping - Plants are added to enhance curb appeal. This is a taxable real property service. See Rule 3.356.
  • Painting and other repair or remodeling - The taxability of residential repairs and remodeling depends on the type of contract between the contractor and the customer. Under a lump sum contract ( a single charge stated that covers all costs for labor, materials, overhead expenses, profit, etc.), the stager pays tax to suppliers when purchasing paint and any other materials incorporated into the job. The stager may not collect tax from the client. Under a separated contract ( a separate charge is quoted for labor and materials), the stager may issue a resale certificate in lieu of paying tax to suppliers when purchasing the incorporated materials. The stager collects tax from the client on the incorporated materials, but does not collect tax on labor. See Rule 3.291.
  • Rental of furniture and accessories - Rental of tangible personal property is taxable. The stager may issue a resale certificate to a retailer for furniture or accessories purchased for rental to the client. The stager may also issue a resale certificate to a furniture rental company for furniture or accessories rented for re-rental to the client. The stager must collect tax on the rental to the client of furniture or accessories. See Rule 3.294.
  • Cleaning - Cleaning the house interior and exterior surfaces (including power washing the exterior and driveway), are taxable real property services. See Rule 3.356.

-------------------------------------------------------------------------------------------------------------------------------

Personally, I have been collecting Sales Tax for several months now on the Rental of my furnishings.  But I will be paying a visit to Cort Furniture with this information and a copy of my tax certificate to request they discontinue charging me sales tax.  I had argued with them on this aspect previously, in a nice way, and relented.  Perhaps if I ask nicely, they will reimburse me?

It is interesting how the State separates Depersonalizing and Uncluttering from Cleaning. So, No longer will "Cleaning" be a service offered by The Stage Coach.  I did find the following from Thesaurus.com:

  • purification,
  • antisepsis (like Listerine?)
  • sterilization (people might get the wrong idea on this one)
  • sanitation
  • disinfection
  • catharsis (Huh?)
  • tidying

The Stage Coach Home Stager Austin Home Staging Round Rock Home Stager

 

Comments (2)

Mike Jones
SUNSTREET MORTGAGE, LLC (BK-0907366, NMLS 145171) - Tucson, AZ
Mike Jones NMLS 223495

Michael,

Congratulations on blogging past 10,000!  I really like your blog header and signature.  Great branding.

Mike in Tucson

Dec 02, 2008 11:02 PM
Michelle Minch
Moving Mountains Design Home Staging, Pasadena, CA - Los Angeles, CA
Home Staging Los Angeles and Orange County, CA

Michael: Having the correct tax information for your state tax board is so important. You are doing all TX stagers a great service by posting this information.

Dec 03, 2008 02:29 PM