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used in the provision of the nontaxable engineering service. The engineering
firm and the title company are the end-consumers of the taxable surveying
services purchased to provide their respective nontaxable services.
(B) A person who performs a nontaxable surveying service
may not issue a resale certificate in lieu of paying tax on taxable
items used or consumed in performing the nontaxable surveying service.
A person who performs a nontaxable surveying service is the end-consumer
of all taxable items purchased, leased, or rented to perform the nontaxable
service. A person who performs a nontaxable surveying service owes
tax on all taxable items purchased to perform the service, unless
the items are otherwise exempt.
(2) Exemption certificates. A person who performs a
taxable surveying service may accept a properly completed exemption
certificate in lieu of collecting tax if an exempt entity directly
contracts for and purchases the surveying service. See §3.322
of this title (relating to Exempt Organizations), §3.287 of this
title (relating to Exemption Certificates). See also §3.288 of
this title (relating to Direct Payment Procedures and Qualifications)
regarding purchasers who may issue a direct payment exemption certificate.
Purchase vouchers that are issued by governmental entities exempted
under Tax Code, §151.309, are acceptable documentation of exempt
transactions. See §3.322(g)(3) of this title.
(A) Except as provided by subparagraph (B) of this
paragraph, a person who performs a taxable surveying service may not
accept an exemption certificate from a person performing nontaxable
services for an exempt entity described in Tax Code, §151.309
or §151.310. The person providing the nontaxable services is
the end consumer and owes tax on the purchase of the taxable surveying
service, even if the person providing the nontaxable services provides
a copy of the survey to the exempt entity upon completion of its nontaxable
services.
(B) A person who performs a taxable surveying service
may accept an exemption certificate from a contractor under Tax Code, §151.311,
on a purchase of a taxable item for use under a contract to improve
realty for an organization that is exempt under Tax Code, §151.309
or §151.310.
(g) Unrelated services.
(1) A service is an unrelated service if:
(A) it is not a taxable surveying service nor a service
or labor taxable under another provision of Tax Code, Chapter 151
(Limited Sales, Excise, and Use Tax);
(B) it is not provided as a part of the taxable surveying
service and is of a type that is commonly provided on a stand-alone
basis; and
(C) the performance of the unrelated service is distinct
and identifiable. Examples of services that are distinct and identifiable
from taxable surveying services include nontaxable surveying services,
such as a topographical survey, engineering services and architectural
or landscaping design services.
(2) Unrelated nontaxable services and taxable surveying
services sold or purchased for a single charge. When an unrelated
nontaxable service and a taxable surveying service are sold together
for a single charge, the total amount charged is presumed to be taxable.
This presumption does not apply if the portion of the charge attributable
to the taxable surveying service represents 5.0% or less of the total
charge.
(A) The person performing the taxable surveying service
with an unrelated nontaxable service may overcome the presumption
of taxability by separately stating a reasonable charge for the taxable
surveying service to the purchaser at the time of the transaction.
A purchaser may presume, in the context of this section, that the
service provider's separately stated charge for a taxable surveying
service is reasonable. If the charge attributable to the taxable surveying
service is not separately stated at the time of the transaction, the
service provider or the purchaser may later establish for the comptroller,
through documentary evidence, the portion of the total charge that
is attributable to an unrelated service.
(B) The taxable surveying service provider's books
must support the apportionment of the total charge between a taxable
surveying service and an unrelated nontaxable service based on either
the cost of providing the taxable surveying service or a comparison
to the normal charge for each service if it had been performed on
a stand-alone basis. If, after reviewing the transaction, the comptroller
determines the charge for a taxable surveying service is unreasonable,
considering the cost of providing the service or a comparable charge
made in the industry for the service, the comptroller may adjust the
charges and assess against the person performing the taxable surveying
service any additional tax, penalty, and interest due on the taxable
surveying service.
(h) Local taxes. See §3.334 of this title (relating
to Local Sales and Use Taxes) for additional guidance related to local
sales and use tax responsibilities.
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