Taxability of COVID-19 Fees and Surcharges by Businesses
Sales and Use Tax
May 2020
When costs increase, many businesses impose additional charges on customer billings, receipts and invoices. Fees and surcharges charged by Texas businesses related to the COVID-19 pandemic are not governmental fees, but charges that businesses have chosen to pass along to recoup the higher costs of goods and services provided to their customers.
For Texas sales tax purposes, additional fees and surcharges related to the selling price of a taxable item are considered part of the sales price and are subject to tax in the same manner as the item or service being sold. If the item or service sold is taxable, then the related fees or surcharges are also taxable, even if separately stated or identified as a dollar-for-dollar reimbursable expense. See Texas Tax Code Section 151.007, Sales Price or Receipts .
ACCESSION NUMBER: 202005017L
SUPERSEDED: N
DOCUMENT TYPE: L
DATE: 2020-05-22
TAX TYPE: SALES