The Garland Rate
Sales in Garland are taxed at 8.25 percent: 6.25 percent for the state, 1 percent for the city and 1 percent for Dallas Area Rapid Transit, which serves Garland with buses and the Blue Line. Sellers file with the Comptroller monthly, quarterly or yearly depending on how much tax they collect. BOMCAS handles sales tax for Garland businesses remotely.
Permits, filing frequency and taxable services in general are on the Texas sales and use tax page; this one deals with Garland's factories, food sellers and contractors.
Manufacturing Exemptions
Texas exempts tangible personal property that becomes an ingredient or component of a product made for sale, and machinery and equipment used directly in manufacturing. A Garland plant can therefore buy raw materials, components and production equipment tax free with a properly completed exemption certificate. Items that are not used directly in production, such as office equipment, maintenance supplies, forklifts used in a warehouse or tools used for repairs, are generally taxable. Auditors often look for these mixed purchases.
Electricity and Gas in Production
Commercial electricity is taxable in Texas, but electricity and natural gas used in manufacturing, processing or fabricating are exempt. Many Garland businesses buy power from Garland Power & Light, the city-owned utility. A plant claiming the exemption needs a predominant use study showing that more than half of the power on a meter goes to exempt use, and then gives the utility an exemption certificate. Studies should be updated when production changes.
Fabricators and Repairs
Fabricating a product to a customer's order is taxable as a sale of the product. Repairing industrial machinery is taxable as a service, as is repairing most other tangible property, while repair of motor vehicles is a separate category in which labour is not taxed. Shops that do both production and repair work need separate invoice lines and codes in their system.
Bakeries, Restaurants and Groceries
Garland's Vietnamese bakeries, pho restaurants and grocery stores deal with the Texas food rules every day. Grocery food is exempt, and bakery items such as bread, pastries and cakes are exempt when sold without plates or eating utensils. Sandwiches, including banh mi, hot prepared food and anything served with utensils are taxable. A store with a deli counter and a grocery section needs its register set up for each category.
Contractors
Remodelling work on homes is usually done under lump-sum contracts, where the contractor pays tax on materials and does not charge tax to the customer. New residential construction is not taxable to the owner. Repair and remodelling of non-residential property is taxable, so contractors working on Garland's industrial buildings and shopping centres must collect tax on those jobs.
Hotel Tax
Hotel stays in Garland carry 7 percent city hotel tax and 6 percent state hotel tax. The city tax is filed with Garland quarterly, and the state tax with the Comptroller. Short-term rental hosts owe both unless the booking platform collects them.
Our Work
- Permits and returns.
- Exemption certificates for manufacturing purchases.
- Predominant use studies and utility certificates.
- Register settings for food sales.
- Contractor job classification.
- Audit preparation and refund claims.
Garland Sales and Use Tax Questions
Is electricity tax free for a Garland factory?
Electricity used predominantly in manufacturing can be exempt, supported by a predominant use study.
Do bakeries charge sales tax?
Not on bakery items sold without plates or utensils. Sandwiches and hot food are taxable.
Can a manufacturer get a refund for tax paid on equipment?
Yes, if the equipment was exempt, through a refund claim within the four-year limit.
What is the sales tax rate in Garland?
8.25 percent, including 1 percent for DART.
Talk to BOMCAS About Sales and Use Tax in Garland
Sales tax returns should agree with the ledger and the annual return. Audit assessments are handled with back taxes, a new production line is a planning question, staff go through payroll, owners file personal returns and imported goods raise cross-border points. For the rules that apply everywhere in Texas, read our state pages on business tax, personal tax, bookkeeping, payroll, planning, back taxes or cross-border tax, all gathered on the Texas overview.
If you run a Garland plant, shop or restaurant, or simply need your family’s return done right, send BOMCAS a few lines about it and we will tell you what to send and what the work would cost. Reach us through the contact page or the form below, by phone at 780-667-5250 or at info@bomcas.ca. All Garland services are listed on the Garland overview. What you read here is general information and not advice on your situation.