Texas Tax Code 151.354 – Services by Employees of Property Management Companies
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(a) There are exempted from the taxes imposed by this chapter services performed by an employee of a property management company if:
(1) the employee is permanently assigned to one rental property by the property management company;
(2) the property management company is reimbursed on a dollar-for-dollar basis for the services provided; and
(3) the employee remains assigned to that property while employed by successive owners or management companies.
(b) This exemption does not apply to services performed by an employee for properties other than the one to which the employee is permanently assigned.
Terms Used In Texas Tax Code 151.354
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
- 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
- Property: means real and personal property. See Texas Government Code 311.005
(c) For purposes of this section, a person is an employee of a property management company if either the property management company or an affiliate of the property management company employs the person.
(d) The property management company must:
(1) be contractually obligated to the property owner to exercise control over the activities of the employee providing the service; and
(2) manage and direct the employee’s day-to-day activities.
(e) The property management company or the affiliate must pay tax on the taxable items purchased and provided to employees providing services on managed property.
(f) In this section, “property management company” means a person:
(1) who, for consideration, operates and manages all the activities at a property held by the owner for purposes of rental, including an office building, mall, or other retail or office complex, an apartment complex, a duplex, or a home; and
(2) whose responsibilities include securing tenants, hiring, and supervising employees for operation or upkeep of the property, receiving and applying revenues, and incurring and paying expenses derived from the operation of the property as directed by the owner.
(g) In this section, a corporation, limited liability company, partnership, trust, or estate is an affiliate of the property management company if an 80 percent ownership interest in the property management company or the corporation, limited liability company, partnership, trust, or estate is held by the other, or if a third person has an 80 percent ownership interest either directly or indirectly in both the property management company and the corporation, limited liability company, partnership, trust, or estate.