| services on managed rental property. (2) Property management companies whose employees provide taxable services as part of their overall management and operation of a rental property need not collect tax on those services if their value is insignificant. (A) Such taxable services will be considered insignificant in any billing period in which their value is 5.0% or less of the amount charged by the management company for services. The amount charged by the management company for taxable services is to be determined by deducting from the management company's total charge any mortgage payments made by the management company for the property owner and any amounts paid to persons other than employees of the management company for goods and services. (B) If the value of the taxable services exceeds the 5.0%
limit, the entire amount charged by the management company will be considered taxable unless charges for taxable services are separately itemized and taxed as provided under subsection (i)(2) of this section. (3) Purchases by the property management company for use by the property owner of taxable goods, labor, or services from third-party suppliers may be handled in either of the following ways: (A) the management company may issue a resale certificate to the supplier and collect tax from the property owner on the itemized charge for the goods, labor, or service; or (B) the management company may pay tax to the supplier and collect from the property owner an amount equal to the total of the amount paid by the management company for the goods, labor, or services and the tax paid.
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| Source Note: The provisions of this §3.356 adopted to be effective April 1, 1988, 13 TexReg 1343; amended to be effective April 24, 1989, 14 TexReg 1790; amended to be effective December 6, 1991, 16 TexReg 6760; amended to be effective March 23, 1995, 20 TexReg 1749.
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