Texas Energy Star Sales Tax Holiday
Qualifying products will display the Energy Star logo. Qualifying products are:
• Air conditioners priced at $6,000 or less
• Refrigerators priced at $2,000 or less
• Ceiling fans
• Incandescent and fluorescent light bulbs
• Clothes washers
• Programmable thermostats
There is no limit on the number of qualifying items one can purchase and an exemption certificate is not required.
It also applies to Internet and catalog sales of eligible products, as long as (1) it is paid for and delivered to the purchaser during the exemption period or (2) the purchaser orders and pays for the item and the retailer accepts the order during the exemption period for immediate shipment, even if delivery is made after the exemption period.
You can also do a layaway plan to take advantage of the sales tax holiday. Layaway sales qualify when either final payment on a layaway order is made and the merchandise is given to the customer during the exemption period or the item is selected by the customer and the order is accepted into layaway by the retailer during the exemption period for immediate delivery upon full payment, even if delivery is made after the exemption period.
Delivery, shipping, handling or transportation charges connected to a qualifying item also qualify for the exemption. Whether separately stated or not, these charges are included as part of the sales price of qualifying products sold during the holiday.
When both exempt and taxable items are being packaged or delivered together, shipping and handling charges must be properly allocated.
When the delivery charge is a flat rate the amount charged is the same regardless of how many items are included. For exemption purposes, the total charge may be attributed to one of the items rather that proportionately and separately allocated between items.
Delivery and/or installation charges billed with the sale of air conditioners and refrigerators may disqualify some of those products from exemption. Only air conditioners with a total price of $6,000 or less and refrigerators priced at $2,000 or less qualify for exemption from sales and use tax.
Depending on if qualifying items purchased are permanently attached to or installed to real property and the realty is residential or nonresidential will determine if charges for installation are exempt.
Free-standing or mobile items (clothes washers, dehumidifiers, refrigerators, portable dishwashers and window or room air conditioning units) are tangible personal property. After installation, if an item retains its identity, then installation charges also qualify for exemption.
Programmable thermostats, central air conditioning units, celing fans, built-in refrigerators and dishwashers that are plumbed, wired or permanently attached to a building structure are improvements to real property. The type of jobsite will determination the taxability of installation labor.
According to Comptroller Rule 3.291, “Contractors”, labor charges are not taxable on new construction and residential repair and remodeling jobsites.
Nonresidential repair and remodeling is taxable.
Sellers may advertise that tax is included in the sales price of a taxable item but may not advertise to pay or not charge sales tax on the sale of a taxable item.