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TITLE 34PUBLIC FINANCE
PART 1COMPTROLLER OF PUBLIC ACCOUNTS
CHAPTER 3TAX ADMINISTRATION
SUBCHAPTER OSTATE SALES AND USE TAX
RULE §3.315Motor Vehicle Parking and Storage

(a) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise.

  (1) College, university, and public school students, faculty, and staff--Any person who is:

    (A) registered as a current student and who is enrolled in a course of instruction at the school;

    (B) paid or employed by the school to provide classroom instruction or academic research;

    (C) otherwise employed as a full-time or part-time employee of the school; or

    (D) a volunteer sanctioned by the school to participate in school activities, events or other functions.

  (2) Parking facility--A parking facility is a real property structure, such as a lot or garage, whether improved or unimproved, where parking is permitted for a fee. The term includes areas, which are specifically designed and used for parking, but may at times be rented or leased for purposes other than parking.

  (3) Parking permits and decals--Motor vehicle parking permits and decals represent registrations of motor vehicles or individual persons for parking privileges.

  (4) College--For the purpose of this section, an institution of higher education that is exempt from sales tax either as a governmental entity under Tax Code, §151.309, or as a nonprofit educational organization under Tax Code, §151.310(a)(1). See §3.322 of this title (relating to Exempt Organizations).

  (5) University--For the purpose of this section, an institution of higher education that is exempt from sales tax either as a governmental entity under Tax Code, §151.309, or as a nonprofit educational organization under Tax Code, §151.310(a)(1). See §3.322 of this title.

  (6) Voluntary gratuity--A gift of money or other item of value given freely by the purchaser to a parking attendant over and above the sales price of the parking service.

(b) Sales tax is due on the charge for parking and storage of a motor vehicle. Examples include charges for parking meters, either private or municipally owned, permits for parking or storage in lots or garages, impound fees, charges for valet parking services, and parking facility lease or rental. If the charge for parking and storage either includes a charge for transportation such as shuttle services, or is in addition to a separately stated charge for transportation, sales tax is due on the entire charge, including any separately stated charges for transportation, other than motor vehicle towing provided by licensed tow truck operators. Motor vehicle towing charges are not subject to sales tax. Persons who repossess motor vehicles for creditors are providing taxable debt collection services rather than towing services, and should refer to §3.354 of this title (relating to Debt Collection Services) for more information.

(c) A boot fee by a private parking lot or garage is subject to sales tax. The private parking lot or garage does not owe sales tax to the booting company. A boot fee by a city or other local government entity is not subject to sales tax.

(d) If a contract for the lease or rental of real property includes a charge for motor vehicle parking and storage, sales tax is due on the motor vehicle parking or storage charge. If one agreement includes motor vehicle parking, and another agreement for similar property does not, any monetary difference may be considered as evidence of the value of the parking.

(e) The person who provides the parking or storage service must pay sales or use tax on all taxable items that are purchased for use in providing the service. The service provider may make tax-free purchases of taxable services that are provided to the customer as an integral part of the motor vehicle parking and storage service. The service provider may also make tax-free purchases of tangible personal property that is transferred to the care, custody, and control of the customer. Examples include decals or ticket stubs that are transferred to the customer. See §3.285 of this title (relating to Resale Certificate; Sales for Resale).

(f) Colleges, universities, and public schools are not required to collect sales tax on charges for parking permits and decals issued to their students, faculty, or staff for campus parking.

  (1) Charges to the general public for parking are taxable.

  (2) Charges to students, faculty, or staff for parking not covered by a permit or decal, such as parking at special events such as concerts or sporting events, are taxable.

  (3) Colleges, universities, and public schools are not required to collect sales tax on any parking that is included, without separate charge, as part of a sale of an amusement service, if the amusement service is exempt under Tax Code, §151.3101(a)(1) or (5).

(g) Sales tax is not due on the charges for the use of parking meters or visitor parking facilities funded or operated by the Texas State Preservation Board or by the Texas State History Museum for visitors of the Capitol complex in Austin, Texas.

(h) A rental or lease of a parking facility is presumed to be taxable.

  (1) If a parking facility is rented or leased for a purpose other than parking, then the charge is not taxable. For example, a rental might include the lease of a parking facility for a flea market. The lessor must collect tax unless the lessor receives and retains documentation, such as an exemption certificate or contract, clearly describing the nontaxable activity.

  (2) The lump-sum rental or lease of a parking facility for an event, wherein there will be a combination of parking and a nontaxable use of the facility, is taxable as the provision of motor vehicle parking. A separately stated charge for the use of the area in the facility that is not devoted to motor vehicle parking is not taxable. The separately stated charges for the motor vehicle parking and the nontaxable use must, however, represent a reasonable allocation based on the area used for motor vehicle parking and the nontaxable use.

(i) Valet parking services. Valet parking services are taxable regardless of whether compensation for the service is received directly from the owner of the parked vehicle or from a third party such as a restaurant or nightclub; or, the parking service is provided at the service provider's location or on the purchaser's own property.

  (1) A provider of valet parking services must collect tax on the total amount charged to a person under a contract to provide valet parking services to the person's guests, patrons, employees or others.

  (2) A person who provides parking services to others during the normal course of business for a separately stated charge may issue a resale certificate in lieu of tax to a valet parking service provider. That person must collect tax on the total amount charged to patrons for the service. A resale certificate cannot be issued when valet parking is provided to patrons free of charge or as an incidental part of another service.

  (3) Tax is due on a mandatory charge to an individual for valet parking service. A voluntary gratuity given by a vehicle owner to a parking attendant is not taxable. See §3.337 of this title (relating to Gratuities).

(j) Local tax. Local sales and use tax is due based on the location where the parking service occurs.


Source Note: The provisions of this §3.315 adopted to be effective December 24, 1984, 9 TexReg 6187; amended to be effective August 30, 1995, 20 TexReg 6333; amended to be effective January 3, 2002, 26 TexReg 11034; amended to be effective May 27, 2010, 35 TexReg 4179

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