Having regular janitorial cleaning done is essential for the health and safety of everyone who uses a building, whether it be a business or a private residence. People in Texas, however, often wonder if and how these services will be taxed. In this article, we will examine whether or not cleaning services are taxable in the Lone Star State and provide a comprehensive guide to complying with the relevant regulations.
First, figure out which cleaning services are taxable.
Finding out if the cleaning was done on real or personal property is the first step in figuring out if the service should be taxed in Texas. Cleaning, maintenance, and repair work for buildings are all examples of taxable janitorial services in the Lone Star State. Cleaning a rented car or leased office equipment are examples of personal property services that are not taxed for the recipient.
The second step is to learn the sales tax rate that applies to janitorial services.
The next step is to learn the sales tax rate that must be collected and submitted to Texas if the janitorial services are indeed taxable. Texas now has a 6.25 percent sales tax rate.
Third, add the applicable sales tax to the final price of the janitorial services.
Janitorial service providers in Texas must collect and remit sales tax to the state. This fee should be included to the overall price of the cleaning services and itemized on the invoice sent to the client. In the case of janitorial services, the applicable sales tax would be $6.25 (6.25 percent of $100).
Fourth, see if any janitorial service exemptions apply.
Owners of businesses in Texas should be aware that they can take advantage of specific exemptions related to janitorial services. Cleaning services donated to a charitable organization are not subject to sales tax. Sales tax exemptions for janitorial services are also provided for specific categories of real property, including churches.
To conclude, if the cleaning work is done on real estate in Texas, the cost of the service is subject to state income tax. There is a 6.25 percent sales tax that must be collected and sent to the state by companies offering these services. Exemptions, however, are provided for specific categories of businesses and real estate. You should verify the taxability of janitorial services in your individual case with the state of Texas or a tax professional.