Laws, Regulations & Annotations

Property Taxes Law Guide – Revision 2018

Property Tax Annotations

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Annotation 205.0160

205.0160 Professional and Service Enterprises. Goods transferred in the rendition of a professional service are not eligible for the exemption, while goods transferred in the rendition of a nonprofessional service are eligible. A profession is a vocation where the labor and skill is predominantly mental or intellectual, rather than physical or manual. A profession requires knowledge of an advanced type in a given field of science or learning gained by a prolonged course of specialized instruction and study. Examples of professional services are: law, ministry, medicine, military service, engineering, chemistry, industrial designing, accountancy, and economics. A nonprofessional service is generally defined as a vocation requiring skill of a manual or mechanical nature. Examples of nonprofessional services are: barber, beauty operator, carpenter, plumber, electrician, and embalmer.

The following types of property are eligible for the exemption:

1. Embalming fluids of a mortician.

2. Medicines held by a hospital pharmacy for issuance to patients at a separate charge.

3. Food held for sale in a hospital cafeteria.

4. Clothes hangers and plastic bags held by dry cleaners and delivered to customers.

5. Chlorine tablets held by a swimming pool service company.

6. Auto repair shop inventories of replacement parts.

7. Television repairman's inventory of tubes and electrical parts.

8. Spare parts stocked by airlines and bus companies for use in repairing both their own equipment and equipment belonging to others if the owner segregates the portion of these inventories held for sale (used to repair the equipment of others).

9. Airline "frozen food stuffs" located at an off-site warehouse.

The following types of property are ineligible:

1. Medicines that a doctor keeps on hand.

2. Food held for serving to hospital patients as part of the daily hospital service and not separately billed.

3. A stock of accounting books passed on to the clients of an accountant as part of his services.

4. Parts that have already been installed as of the lien date on equipment being repaired by a repair shop.

5. Supplies of tickets held by airlines and theaters. LTA 4/25/1980 (No. 80/69).