Exemption for Labor
Texas – Labor involved in the repair, remodeling, maintenance or restoration of tangible personal property is not taxable if repair, remodeling, maintence or restoration is required by statute, ordinance, order, ruler or regulation of any commission, agency, court; or political governmental or quasi-governmental entity in order to protect the environment or to conserve energy.
Medical service providers operating radiation machines must maintain radiation equipment within manufacturer specifications due to environmental concerns. Therefore the exemption applies to labor charges for repair, remodeling, maintenance or restoration services performed on diagnostic imaging and therapeutic equipment subject to oversight by the Department of State Health Services pursuant to the Radiation Control Program when the services are performed to keep or bring the machinery within required specifications.
Examples of qualifying equipment:
• X-ray radiographic equipment
• X-ray fluoroscopic equipment
• Computed tomography equipment
• Cardiac catheterization equipment
• Mammography equipment
• Nuclear medicine equipment
• Ultrasound equipment
• Lithotripsy equipment
Exemptions also apply to services performed on a component party of an integrated unit of qualifying diagnostic imaging or therapeutic equipment such as:
• X-ray tubes
• Filters
• Detectors
• Power supplies
• Operator worstations
• Viewing equipment
• Printers
• Patient tables
• Networking equipment or associated computer software
The exemption only applies to charges for labor for those services required to keep or bring qualifying machinery within the required specifications. It does not apply charges for cosmetic repairs or tangible personal property, including repair or replacement parts used or consumed during the service.
The labor charges for qualifying services must be separately stated. Under a separated contract, the service provider should collect tax on the separately stated charge for materials and/or cosmetic repairs, but may accept an exemption certificate in lieu of tax on the charge of labor. If billed as a lump sum, the entire charge is presumed taxable.
