A Texas Comptroller newsletter highlights the sales and hotel occupancy tax relief measures for Hurricane Harvey victims and relief workers.
Businesses not required to report their sales and use taxes electronically (less than $50,000 paid in preceding state fiscal year) are granted an automatic 30-day extension to file the August monthly report, normally due September 20, and the third quarter report, normally due October 20, provided they are located in a federally declared disaster area.
Taxpayers required to report their sales and use taxes electronically ($50,000 or more paid in preceding state fiscal year) and taxpayers reporting other tax types may request a 30-day filing extension. Extension requests are handled on a case-by-case basis. Taxpayers should call the Comptroller’s Taxpayer Services line at 800-252-5555 or send an email to ExtensionRequests@cpa.texas.gov.
Hotel Tax Waiver
The collection of Texas state and local hotel occupancy tax, including venue project hotel tax, is temporarily suspended for disaster relief workers and people displaced by Hurricane Harvey. The hotel tax waiver is for a period beginning August 23, 2017, and ending October 23, 2017.
To claim the exemption, victims and relief workers should complete a Form 12-302, Texas Hotel Occupancy Tax Exemption Certificate. Hotel managers should mark the “Exempt by Other Federal or State Law” box and write “Hurricane Harvey” anywhere on the form.
If the guest does not request the exemption and purposefully pays tax, the hotel should:
- collect the tax;
- report the receipts as taxable room receipts; and
- remit the tax to the state.
Qualified victims or relief workers who already paid tax may request a refund from the hotel that collected the tax. After refunding the tax, the hotel can adjust taxable receipts on a current return to take credit for the refund. The hotel can also complete Form 00-985, Assignment of Right to Refund, for state hotel tax only.
FEMA, Red Cross, or Salvation Army Debit Cards
Generally, items and services purchased with a FEMA, Red Cross, or Salvation Army debit card or voucher are exempt from sales and use tax, including purchases of Ready-to-eat food. Tax is due on any amount of the purchase that is paid with cash, personal credit/debit card, or other personal funds. This exemption does not apply to purchases of motor vehicles, alcohol products, and tobacco products.
Repairing Real Property
Labor charges to repair or restore nonresidential real property damaged by a declared natural disaster are exempt if the charges are separately stated. Labor to repair residential real property is also not taxable.
If the labor charge to repair or restore nonresidential real property is in a lump sum rather than separately stated, the charge is presumed to be taxable. However, the service provider can overcome this presumption by accepting an exemption certificate and then separately stating the charge for labor from the charge for incorporated materials.
Repairing Personal Property
Charges for labor to repair or restore tangible personal property damaged by a declared natural disaster, including furniture, are exempt. The exemption can also be claimed on costs to launder or dry clean damaged clothing or other items.
Cutting Down, Removing Trees
Labor charges to cut down damaged branches or cut up a damaged tree are exempt. However, charges for hauling away branches, limbs, or trees are taxable waste removal services. Nontaxable and taxable charges should be separately stated. A lump-sum charge for taxable and nontaxable services will be presumed taxable if the taxable portion is greater than 5% of the total bill.
Other state and federal tax relief measures for Hurricane Harvey victims and relief workers are listed on the Comptroller’s website at https://comptroller.texas.gov/taxes/resources/disaster-relief.php.
The complete newsletter is available at https://www.comptroller.texas.gov/taxes/.
Tax Policy News, Texas Comptroller of Public Accounts, October 2017