Texas Ruling: Marked-Up Engineering Firm Charges Subject to Sales Tax, Project Management Exempt

• Texas Comptroller issued a ruling on sales tax for engineering firms
• Reimbursed charges for materials and subcontracted services are taxable if marked up
• Firm provides non-taxable engineering services but may purchase materials or contract services
• Markup on taxable items makes the entire charge subject to sales tax
• Exact reimbursement requires separate statement of cost and sales tax to avoid being a seller
• Project management services remain non-taxable
• Comptroller Letter No. 202503025L issued March 28, 2025
• Additional explanations available in specified references

Source: vitallaw.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

---

---