Harvey Help: Can contractors charge sales tax?

KHOU finds out if contractors can charge sales tax on disaster relief.

If you're hiring someone to clean out your flooded home, you should not be paying sales tax for the labor. One homeowner contacted KHOU after he noticed it on his quote.
 
"We're looking at pictures of family," said Alan Price, whose Timbergrove home flooded in Northwest Houston.
 
He saved what he could and then hired the national franchise Servpro to do demolition at his home.
 
"8.25% tax to be added to final bill," he showed us reading his emailed quote. "I thought goodness that's kind of kicking people when they are down, charging tax on top of disaster relief," said Price.
 
In fact, in the state of Texas labor charges for residential repairs are not subject to sales tax, but materials still are. Although on Price's $22,000 dollar quote, the distinction is not clear.
 
"It's just a blank statement 8.25% tax to be added on final bill," he said.
 
So, we called Servpro and a spokeswoman sent KHOU this statement:
 
"The statement on the estimate is simply intended as a disclosure to customers that the appropriate sales tax rate will be applied to taxable services. The stated 8.25% is only an estimate and the appropriate rates will be applied to the final invoice. Our Franchise Operators are required to comply with all local laws, including charging and collecting appropriate sales tax from their customers. All sales taxes collected will be paid to the state."
 
"I know they are very, very busy, but certainly I think they could do a better job of explaining of what their pricing actually entails," said Price.
 
Especially, since the majority of Price's work is demolition, not materials.
 
"A lot of memories here and a lot of memories that were lost in the flood," said Price looking at his collection of old photos drying out.
 
This lesson he hopes won't be lost too.
 
"If you're not aware there is this sales tax issue, sure people might just write a check, pay money they don't have to pay," said Price.
 
Price says Servpro apologized for the confusion and assured him he would not be taxed for the labor. They're still the ones he put in charge of cleaning out all of his stuff.

© 2017 KHOU-TV


JOIN THE CONVERSATION

To find out more about Facebook commenting please read the
Conversation Guidelines and FAQs

Leave a Comment