| (4) Repair and maintenance. Sales and use tax is not
due on the labor to repair, remodel, restore, renovate, convert, or
maintain a commercial vessel or a Chapter 160 boat that meets the
definition of a commercial vessel, or a component part of a commercial
vessel or a Chapter 160 boat that meets the definition of a commercial
vessel. Sales and use tax is due on the sale or use of machinery,
equipment, tools, and other items used or consumed in performing the
non-taxable service. For more information about the repair, remodeling,
maintenance, and restoration of vessels that are not commercial vessels,
see §3.292 of this title (relating to Repair, Remodeling, Maintenance,
and Restoration of Tangible Personal Property).
(5) Vessels operating exclusively in foreign or interstate
coastal commerce.
(A) Sales or use tax is not due on the sale of materials
and consumable supplies, including items commonly known as ships'
stores and sea stores, to the owner or operator of a vessel operating
exclusively in foreign or interstate coastal commerce, if the materials
and consumable supplies are for use and consumption in the operation
and maintenance of the vessel, or if the materials and supplies enter
into and become component parts of the vessel.
(B) Operation of the vessel in a manner other than
in foreign or interstate coastal commerce will result in a loss of
the exemption for ships' stores and sea stores for the quarterly period
in which the nonexempt operation occurs.
(C) Any owner or operator of a vessel operating exclusively
in foreign or interstate coastal commerce shall, when giving an exemption
certificate, include on the certificate the title or position of the
person issuing the certificate and the name of the vessel on which
the items are to be loaded.
(D) Sales tax is due on sales made to individual seamen
operating these vessels.
(6) Closely associated service companies provide servicing
operations such as stevedoring, loading, and unloading vessels. Sales
or use tax is not due on the sale or use of materials and supplies
purchased by a person providing stevedoring services for a vessel
operating exclusively in foreign or interstate coastal commerce if
the materials and supplies are loaded aboard the vessel and are not
removed before its departure. This includes, but is not limited to,
such items as lumber, plywood, deck lathing, turnbuckles, and lashing
shackles.
(d) Taxable uses of tangible personal property purchased
tax free. Sales and use tax is due when tangible personal property
sold, leased, or rented tax-free under a properly completed resale
or exemption certificate is subsequently put to a taxable use other
than the use allowed under the certificate. For more information refer
to §3.285 of this title (relating to Resale Certificate; Sales
for Resale) and §3.287 of this title (relating to Exemption Certificates).
(e) Rolling stock, locomotives, and trains.
(1) Sales or use tax is not due on the sale or use
of locomotives and rolling stock.
(2) Sales or use tax is not due on the sale or use
of fuel or supplies essential to the operation of locomotives and
trains, including items required by federal or state regulation. Examples
include, but are not limited to, telecommunication and signaling equipment,
rails, ballast, cross ties, and roadbed moisture barriers. Items of
tangible personal property used to construct, repair, remodel, or
maintain improvements to real property such as depots, maintenance
facilities, loading facilities, and storage facilities are not supplies
essential to the operation of locomotives and trains.
(3) Sales or use tax is not due on the amount charged
for labor or incorporated materials used to repair, remodel, maintain,
or restore locomotives and rolling stock. Sales or use tax is due
on the sale or use of machinery, equipment, tools, and other items
used or consumed in performing the non-taxable service.
(4) Sales or use tax is not due on the sale or use
of electricity, natural gas, and other fuels used or consumed predominately
in the repair, maintenance, or restoration of rolling stock. For more
information, see §3.295 of this title (relating to Natural Gas
and Electricity).
(5) Sales or use tax is not due on the amount charged
for labor or incorporated materials, whether lump-sum or separately
stated, used for the construction of new railroad tracks and roadbeds.
For more information, see §3.291 of this title (relating to Contractors).
Sales or use tax is not due on the separately stated sales price of
incorporated materials used to repair, remodel, restore, or maintain
existing railroad tracks and roadbeds. Sales and use tax is due on
the sales price for labor to repair, remodel, restore, or maintain
existing railroad tracks and roadbeds as nonresidential real property
repair, remodeling, and restoration. For more information, see §3.357
of this title (relating to Nonresidential Real Property Repair, Remodeling,
and Restoration; Real Property Maintenance).
(f) Motor vehicles. The sale and use of motor vehicles
are taxed under the Tax Code, Chapter 152 (Taxes on Sale, Rental,
and Use of Motor Vehicles). For information on repairs to motor vehicles,
see §3.290 of this title (relating to Motor Vehicle Repair and
Maintenance; Accessories and Equipment Added to Motor Vehicles; Moveable
Specialized Equipment).
|
| Source Note: The provisions of this §3.297 adopted to be effective January 1, 1976; amended to be effective March 24, 1978, 3 TexReg 817; amended to be effective October 6, 1978, 3 TexReg 3353; amended to be effective March 31, 1982, 7 TexReg 1177; amended to be effective October 30, 1984, 9 TexReg 5387; amended to be effective November 6, 1985, 10 TexReg 4125; amended to be effective January 28, 1992, 17 TexReg 324; amended to be effective December 28, 1993, 18 TexReg 9312; amended to be effective August 12, 1998, 23 TexReg 8182; amended to be effective June 19, 2017, 42 TexReg 3159; amended to be effectiveJuly 4, 2023, 48 TexReg 3516 |
