Pest control service providers perform both taxable and nontaxable services. When you provide structural pest control services, you must collect sales tax from your customers (even when pests are not found).
Taxable pest control services include the following:
Sales and use tax is due on most materials, supplies and equipment used to perform a taxable pest control service. Sales and use tax is due even when the service is provided to a tax-exempt organization or governmental entity. However, a service provider may give a resale certificate (PDF) to its supplier instead of paying tax when buying the chemicals used to perform the service.
The following pest control services are not taxable:
Nontaxable service providers must pay sales and use tax on all materials, supplies and equipment used in providing their services, including the chemicals used to perform the services.
You should collect state and local sales tax on the total amount you charge for your pest control service, including any additional fees, even when pests are not found. You can accept an exemption certificate (PDF) instead of collecting tax when you perform services for a tax-exempt organization or governmental entity.
The tax rate is 6.25 percent state tax and up to 2 percent local tax. Local taxes are based on your place of business in Texas. You can use our Sales Tax Rate Locator to determine the correct rate.
If your place of business has a local tax rate of less than 2 percent, and you provide your taxable service in other local taxing jurisdictions, then local use tax may also be due. See Publication 94-105, Local Sales and Use Tax Collection – A Guide for Sellers and Rule 3.334, Local Sales and Use Tax for information about collecting local use tax in those jurisdictions.
Separately stated charges for services or expenses directly related to or incurred when performing pest control services are taxable and may not be separated for the purpose of excluding these charges from the tax base. Examples include charges for meals, calls, lodging and travel.
If your business performs both taxable and nontaxable services, your invoice must separately state the charges for the taxable and nontaxable services to your customer and you must collect tax on only the taxable service charges. The nontaxable service must be distinct, identifiable, and a type of nontaxable service that you commonly provide by itself (i.e., not in combination with a taxable service).
If you do not bill your customer separately for the taxable service, and the charge for the taxable service represents more than 5 percent of the total price, you must collect tax on the entire charge. You or your customer, however, can later provide documentation identifying the percentage of the total charge that relates to the taxable service and remit the tax on that taxable portion of the lump-sum sales price.
If you do not bill your customer separately for the taxable service, and the portion of the charge related to the taxable service represents 5 percent or less of the total price, you do not have to collect tax.
If you subcontract with a third party to perform any part of your pest control services, you can give the third-party service provider a resale certificate (PDF) instead of paying tax on their services provided to your customer. You must then collect tax from your customer on the total charge for the pest control service, including any subcontracted third-party amount.