(a) The purchase of tangible personal property for use in the performance of a contract for an improvement to realty for an organization exempted under § 151.309 or 151.310 of this code is exempt if the tangible personal property is incorporated into realty in the performance of the contract.
(b) The purchase of tangible personal property, other than machinery or equipment and its accessories and repair and replacement parts, for use in the performance of a contract for an improvement to realty for an organization exempted under § 151.309 or 151.310 of this code is exempt if the tangible personal property is:
(1) necessary and essential for the performance of the contract; and
(2) completely consumed at the job site.

Terms Used In Texas Tax Code 151.311

  • Contract: A legal written agreement that becomes binding when signed.
  • Improvement: means :
    (A) a building, structure, fixture, or fence erected on or affixed to land;
    (B) a transportable structure that is designed to be occupied for residential or business purposes, whether or not it is affixed to land, if the owner of the structure owns the land on which it is located, unless the structure is unoccupied and held for sale or normally is located at a particular place only temporarily; or
    (C) for purposes of an entity created under § 52, Article III, or § 59, Article XVI, Texas Constitution, the:
    (i) subdivision of land by plat;
    (ii) installation of water, sewer, or drainage lines; or
    (iii) paving of undeveloped land. See Texas Tax Code 1.04
  • Person: includes corporation, organization, government or governmental subdivision or agency, business trust, estate, trust, partnership, association, and any other legal entity. See Texas Government Code 311.005
  • Personal property: All property that is not real property.
  • Personal property: means property that is not real property. See Texas Tax Code 1.04
  • Property: means real and personal property. See Texas Government Code 311.005
  • Tangible personal property: means personal property that can be seen, weighed, measured, felt, or otherwise perceived by the senses, but does not include a document or other perceptible object that constitutes evidence of a valuable interest, claim, or right and has negligible or no intrinsic value. See Texas Tax Code 1.04

(c) The purchase of a taxable service for use in the performance of a contract for an improvement to realty that is performed for an organization exempted under § 151.309 or 151.310 of this code is exempt if the service is performed at the job site and if:
(1) the contract expressly requires the specific service to be provided or purchased by the person performing the contract; or
(2) the service is integral to the performance of the contract.
(d) For purposes of this section, tangible personal property is completely consumed if after being used once for its intended purpose it is used up or destroyed. Tangible personal property that is rented or leased for use in the performance of the contract cannot be completely consumed for purposes of this section.

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