Tis’ the season for taxes, and it’s usually around this time we get asked: “Are our plumbing services taxable?” Don’t flush your tax money down the drain!
Plumbing services in Texas are made up of two components: parts and labor. These two components may be handled differently on your final invoice, so it’s a good idea to familiarize yourself with how plumbing and repair services are billed and taxed in Texas.
Home repairs do not fall under any IRS category that will let you deduct them out of that year’s taxes, no matter how much they affect the house or why they were accomplished. However, the IRS generally accepts many more business deductions than home deductions. So if you use part of your home solely for business purposes, then you could be able to deduct a portion of the expenses for plumbing repairs in that area of your home.
Energy-related tax credits may be available for major plumbing work: they are often based on individual state regulations or federal laws. For example, if you use the plumbing repair project to install a geothermal heat pump or upgrade to energy-efficient and applicable piping materials, then you may be able to receive a tax credit. These federal laws can change rapidly, so you should check current standards before you begin the repair.
Sales tax is one of the largest sources of revenue for the state of Texas. It’s crucial for basic government operations, and as time goes on, states tend to increase the types of goods and services that are taxable in order to increase revenue.
Currently, sales tax in Texas is 8.25 percent of all goods bought. This means that when your plumber buys the necessary parts, materials, and supplies from a hardware supplier, they will be charged the Texas state sales tax for those items.
Parts and Labor
Typically, your plumber’s initial visit to your home is to inspect the damaged area and to give you a quote for the final parts and labor cost. This total may fluctuate based on the exact cost of the parts and the exact amount of time needed to complete the repairs, but your quote will generally be within close range of the final total.
Although plumbing service parts, materials, and supplies are taxable in Texas, the labor fee your plumber charges is not. Labor is normally charged as a flat fee or an hourly fee.
Texas views your plumber as a contractor, which is someone who does repair or remodeling on a residential property in the state of Texas.
As a contractor, your plumber has the option of charging you a lump sum for the services they provide, including parts and labor or charging you separately for each.
With a lump sum contract, your plumber will pay all applicable taxes for parts and materials when they buy them. They will not charge you tax on your final invoice.
Alternatively, your plumber may charge you separately for parts and labor. In this case, your plumber will assess the parts and materials needed to complete services and then buy the necessary items from a plumbing parts and materials supplier at cost. The supplier will not charge your plumber the Texas state sales tax on the parts at the time of purchase.
Instead, your plumber must incorporate the sales tax for the parts, materials, and supplies into the final invoice total. But they may only include tax for the parts, materials, and supplies. They cannot charge you tax for the labor cost incurred.
At times, your final charges and invoice can be confusing, so it’s important that you choose a trusted emergency plumber. They should give you an accurate quote and a detailed final invoice for your records. They should also take the time to answer all of your questions, and you should be able to trust their word and their work.
For more details on which types of plumbing services are taxable in Texas, or to have a certified plumber visit your home for an inspection or emergency, contact Capital Care Plumbing anytime — 24 hours a day, seven days a week.