Texas State Tax Rulings
Free plain-English summaries of state tax letter rulings and advisory opinions issued in Texas, with full citations and the original source on every page.
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Does the Texas exemption for services performed on certain exempted tangible personal property (Tex. Tax Code Sec. 151.3111) apply once that property becomes a fixture or improvement to real property, such as a steam boiler installed in an electric generating plant?
No. The Comptroller's office told the taxpayer that the Sec. 151.3111 exemption for services on certain exempted tangible personal property does not extend to property once it becomes a fixture or imp…
Is a company that provides workplace safety and loss control consulting services to insurance-related and non-insurance clients providing a taxable service in Texas?
Yes, generally. The Comptroller's office told this safety and loss control consulting company that its services are taxable 'insurance services' under Rule 3.355 both when paid for by an insurance car…
Are charges for installing, servicing, and monitoring a burglar alarm/security system taxable in Texas, including when the system is installed during new construction of a building or house?
Yes. The Comptroller's office confirmed that charges for installing, servicing, and monitoring burglar alarm/security systems are taxable as 'security services' under Tax Code Section 151.0075, even w…
Is the labor to develop a multimedia presentation, desktop-published literature, or graphic art (booth graphics, ads, slides) taxable in Texas when it's delivered to the client on a diskette or as film/output, and can the developer buy reproduction materials tax-free?
Yes, taxable. The Comptroller told this developer that charges (labor and materials) to create a multimedia presentation delivered on diskette are taxable as the sale of a computer program, and that l…
Is painting, patching, and seal coating work on a neglected strip shopping center's walls and parking lot considered nontaxable maintenance, or is it taxable repair/remodeling/restoration?
It's taxable repair, remodeling, and restoration, not nontaxable maintenance. The Comptroller explains that maintenance under Rule 3.357(a)(4) means scheduled, periodic work done to sustain or support…
Is an interior decorator's design fee, purchasing fee, administrative charge, freight/move-in charge, or consultation fee taxable under Texas sales and use tax?
It depends on how the charge is billed. A separately stated interior design fee or a stand-alone consultation fee is not taxable. But a design fee folded into a lump-sum charge for taxable property be…
Is telephone or on-site technical support for software taxable in Texas, and can a contractor providing that support staff to a company accept a resale certificate instead of charging tax?
Yes, charges for telephone technical support of tangible personal property (including software) are subject to Texas sales and use tax if provided to a recipient in Texas, though the service can be pu…
Is a computerized communications monitoring service for elderly, shut-in people taxable as a 'security service' in Texas if the provider must be licensed as an Alarm Systems Company under the Private Security Act?
Yes. The Comptroller checked with the State Board of Private Investigators and found that the taxpayer's computerized communications service for elderly people required licensure under the Private Sec…
Is a scrap metal processing service — cutting, chopping, and separating aluminum and copper conductors for electric utilities and co-ops — taxable, and does the machinery used qualify for the Texas manufacturing exemption?
The processing service itself is taxable, but the utility company can give the processor a resale or exemption certificate stating the service is purchased to further processing of property that will …
Is a hospital's charge for an outside company's inspection and certification of hospital electrical and biomedical equipment (to meet federal or state safety regulations required for licensing) subject to Texas sales or use tax?
No. The Comptroller ruled that this inspection and certification service is a nontaxable service. It is not the repair or maintenance of tangible personal property, not the repair of nonresidential re…
Is caring for indoor plants a taxable service in Texas, and do I owe sales tax on the supplies (stakes, fertilizer, leaf cleaner, containers) I use to provide that service?
Yes, indoor plant maintenance is a taxable service in Texas, and whether you owe tax on your supplies depends on whether they're transferred to the customer: items like plant stakes that stay with the…
Is an indoor plant care and maintenance business subject to Texas sales tax, and does taxing an existing service contract violate the Constitution's ban on impairing contracts?
Yes, the service is taxable. The Comptroller told an indoor plant care provider that maintaining tangible property (like indoor plants) has been taxable since the Legislature imposed the tax in 1984, …
Is selling pooled telephone survey data taxable in Texas, and does modifying that data for a specific client change the answer?
Yes, it's taxable either way. The Comptroller ruled that selling pooled telephone survey information to a specific client without modification is a taxable transaction, that modifying the pooled infor…
Is translating documents (assembly instructions, labels, tags, price lists, and legal documents) from English to Spanish a taxable service in Texas?
No. The Comptroller's Tax Policy Division ruled that translation services — translating assembly instructions, labels, tags, price lists, and legal documents from English to Spanish — are not taxable,…
Is Texas sales tax due on foot reflexology services provided at a reflexology shop?
No, not if the shop is licensed as a physical therapist or massage therapist — the Comptroller advised that licensed physical or massage therapists are not required to collect tax on reflexology servi…
Does a medical case management / disability management consultant have to collect Texas sales tax on its services to insurance companies?
It depends on what the consultant actually does. Texas taxes "insurance services" — including insurance claims adjustment/claims processing and insurance investigation (evaluating eligibility for cove…
Is Texas sales tax due on towing charges for repossessed vehicles?
It depends on who has possession of the vehicle. If a repossession company is hired by a financial institution to repossess a vehicle the institution doesn't yet have access to or possession of, all o…
Is a waste collection service that picks up used oil and oil filters taxable, and can the service provider buy the collection containers tax-free?
The waste collection service is taxable until the customer gives the provider certification or other documentation that the waste (such as used oil and oil filters) is excluded from the definition of …
Is Texas sales tax due on mud logging services performed at oil and gas wells?
No. Mud logging services — recording information from analyzing formation cuttings and mud circulated out of the well bore, as defined in A Primer of Oil Well Service and Workover — are not taxable un…
What did the 1994 internal Comptroller memo say about whether prewiring a building for a burglar alarm system is taxable as a security service?
This is NOT a taxpayer-specific letter ruling — it's an internal November 1994 Comptroller staff email (with an attached Legal Services memo from Chung Chu Cha and a supporting letter from the Texas B…
Is tattooing a dog or other companion animal for identification purposes subject to Texas sales tax?
Yes. Tattooing a dog or other companion animal is a taxable graphic arts service because the animal is tangible personal property and imprinting tangible personal property is a taxable service. By con…
Is Texas sales tax due on the finder's fee a licensed private investigator charges for locating owners of unclaimed property held by a state agency?
Yes. The Comptroller ruled that a licensed private investigator's fee for locating claimants of unclaimed property is taxable as a security service, so sales tax must be added on top of the investigat…
Does a maid or housekeeper have to charge Texas sales tax on cleaning services performed in a private home?
It depends on who is really in control. If you hold yourself out as a maid service (like "Happy Maids") and clean a home with only minimal direction on which rooms to clean, you are performing a taxab…
Is Texas sales tax due on the food, beverages, and videotaping charges a focus-group coordinator bills to its clients?
Yes. Any separately stated charges for food and beverages and for video tapes (including taping services) are taxable to the customer. If the invoice instead shows only a single lump-sum charge labele…
Does a company that sorts, processes, and mails customer mail (rather than manufacturing a product) qualify for Texas's manufacturing exemption on its equipment and supplies?
No. The Comptroller ruled that a mailing services company performing mail sorting, metering, and bar-code labeling is providing a nontaxable mail-handling service, not manufacturing, processing, or fa…
Does the Texas Workers' Compensation Facility's sales tax exemption on insurance services also cover its member insurance companies?
The Texas Workers' Compensation Facility's exemption from sales tax on insurance services (under V.A.T.S., Article 5.76-2, Sec. 2.06) applies only to insurance services the Facility itself buys -- it …
Texas Letter Ruling 9406L1307A03: Hazardous Waste/Excluded Waste — Containers/Drums/Roll — Off Boxes — Used To Provide Nontaxable Removal Services — Provider Cannot Issue Resale Certificate
No. A hazardous waste removal company cannot issue a resale certificate for the containers, drums, or roll-off boxes it uses on the job, because hazardous waste removal is a nontaxable service (exclud…
Texas Letter Ruling 9406L1306A08: Stock Market Investors Service — Computer Tracking / Monitoring Of Client'S Investments And Alerting When Prices Change
Yes — the Comptroller ruled that a service using computers to track clients' stock investments and alert them by fax or pre-recorded phone message when prices moved a set percentage is a taxable infor…
Texas Letter Ruling 9406L1305D08: Golf Course — Made Up Of A Number/Collection Of Improvements (Lake,Fairways, Cart Paths, Gabion, Tee Box/Signs, Greens, Clubhouse, Trenches) New Construction Vs. Remodeling
It depends on what work is done to which improvement: totally demolishing and rebuilding a green from scratch is new construction, but roto-tilling/reshaping an existing green is remodeling (though so…
Is a service that cuts lines in a customer's semiconductor chip and creates new connections, without adding or removing any material, subject to Texas sales tax?
Yes. The Comptroller ruled that cutting lines in a client's semiconductor chip and forming new connections is taxable as repair or remodeling of tangible personal property under 34 Tex. Admin. Code Ru…
Is a registered nurse's medical case management and rehabilitation counseling work for insurance companies taxable as an insurance service in Texas, and does that include reimbursed expenses?
Yes -- the Comptroller ruled that medical case management and rehabilitation counseling services performed for an insurance company are taxable insurance services under Rule 3.355. The tax base includ…
Is a refundable deposit fee charged to towel rental customers part of the taxable sales price?
No, not the initial deposit -- a refundable up-front deposit collected before towels are ever delivered is not part of the taxable sales price. However, a separate 'automatic replacement deposit,' cha…
Is a service that negotiates with creditors on behalf of a debtor business to settle past-due accounts payable a taxable debt collection service in Texas?
Yes. The Comptroller held that any activity performed for consideration to collect or settle a delinquent debt is a taxable debt collection service, regardless of which side of the debt hires the serv…
Does a doctor's prescription for cellular phone service exempt the telecommunications charges from Texas sales tax?
No. The Comptroller ruled that telecommunications services, including cellular phone service, do not qualify for exemption merely because a doctor prescribed them. The letter is brief and does not cit…
When a gun dealer sells a handgun at a gunshow but transfers it through a local dealer to complete the Brady Law background check and waiting period, which dealer collects sales tax, and is the local dealer's transfer/handling fee taxable?
The selling dealer (Dealer 'A', who received payment from the customer at the gunshow) is the one who must collect and remit Texas sales tax on the handgun -- not the local dealer ('B') who merely han…
Is a service that picks up and removes dead or dying cattle/livestock from a ranch taxable as a Texas 'waste removal service'?
No. The Comptroller ruled that a service that picks up and removes dead or dying livestock is not taxable as a waste removal service. The ruling is short and fact-specific, based only on the facts the…
Can a cable television company claim the manufacturing exemption on the electricity it uses to produce and deliver its cable signal?
No. The Comptroller ruled that CATV providers cannot claim the Tax Code § 151.317 manufacturing exemption on electricity used to produce their signal, because cable television service is specifically …
Are drafting charges from a third party taxable when building or remodeling a natural gas pipeline in Texas?
It depends on who creates the design. If a third party is simply handed schematic drawings and specifications and produces drafting work (drawings/blueprints) from them, that firm is a taxable 'drafts…
How does a Texas roll-off box / solid waste collection company source local sales tax — where the box is placed, or where the office takes orders?
Local tax on a roll-off box/waste collection service is based on where the box is placed, not where the company takes the order. The Comptroller told this taxpayer to collect tax at the rate in effect…
Does a maid/housekeeping business have to collect Texas sales tax on residential cleaning services?
It depends on the working arrangement. The Comptroller explained that Texas exempts cleaning services performed by an individual employee who cleans the same home for wages, but if the business owner …
Is a new computer/drafting consulting company's revenue — drafting, technical graphics, consulting, hardware/software sales, and sub-contracted work — subject to Texas sales tax?
It depends on the service. The Comptroller ruled that drafting and CAD services (billed by customer specifications), technical graphics/charts/posters, and hardware/software sales are all taxable. Sta…
Does a personal shopper have to collect Texas sales tax on commission and consulting fees charged to clients?
Yes, when the fees relate to a sale of clothes. The Comptroller ruled that a personal shopper who buys clothes for clients is a seller of that clothing, so commissions and consulting fees added to the…
Is painting lettering on a store's windows a taxable service in Texas?
Yes. The Comptroller ruled that painting letters on a store's windows is taxable as nonresidential repair and remodeling of real property under Rule 3.357. The service provider must collect and remit …
Is a company that monitors horse races at racetracks with its own personnel and equipment performing a taxable equipment rental or a nontaxable service?
It's a nontaxable service, not a taxable equipment rental. The Comptroller ruled that a company providing race monitoring services to racetracks — using its own personnel and equipment (cameras, monit…
Is a paper-and-pencil personality profile testing service, used by employers to screen job applicants for honesty and suitability, taxable in Texas as a security service?
Yes, currently — but that changes soon. The Comptroller confirmed that a client's paper-and-pencil personality profile testing service is taxable as a security service under Rule 3.333(a). However, ef…
Is the compensation a receiving racetrack pays a sending racetrack for simulcasting a horse or dog race, for wagering purposes, subject to Texas sales or use tax?
Yes. The compensation (fees or commission) a receiving racetrack pays a sending racetrack for simulcasting a race — the live audio/video transmission of a race from a sending track to a receiving loca…
If a company places copy machines at retailer locations and charges a monthly fee based on the number of copies sold, is that a lease of the copier, and can the retailer buy paper and toner tax-free with a resale certificate?
Yes, it is a lease. The Comptroller confirmed that a company placing copy machines at various business locations and charging a monthly fee based on the number of copies made (here, 5 cents per copy, …
Does a company have to collect Texas sales tax on charges for setting up and supervising a contest?
No. The Comptroller ruled that charges for setting up and supervising a contest are not taxable services, but the company must still collect tax on any materials and prizes it sells to its client.
Can a company that buys and sells a chemical used to clean up oil spills issue or accept a resale/exemption certificate on that chemical, and is the oil-spill clean-up service itself taxable?
A retailer that buys the chemical only to resell it as-is may issue a resale certificate to its supplier. But a company that uses the chemical to perform a clean-up service must pay tax on it, unless …
Do I have to charge Texas sales tax on drafting or CAD design services, like drawings and blueprints made from a client's specs?
Yes. Texas sales tax is due on drafting delineations and blueprints, including CAD drafting, when the draftsman works from specifications the customer supplies, and on any additional copies of the fin…
Is a jewelry appraisal taxable in Texas?
It depends on why the appraisal is done. Under Rule 3.355(a)(2), an appraisal is a taxable 'insurance inspection' if it's done to get an insurance floater for replacement value or to support payment o…
Does a waste collection company owe Texas sales tax on the state solid-waste disposal fee and a city fee for waste containers that it passes on to customers?
Yes. Waste collection or removal is a taxable real property service in Texas, and the sales price on which tax is charged includes the total amount billed, with no deduction for expenses like the stat…
Does Texas sales tax apply to charges for storing a motor vehicle in a general-purpose storage facility?
It depends on what is being stored. Tax Code Section 151.0101(a)(4) taxes motor vehicle parking and storage services, but it does not apply to a general-purpose storage facility where customers can st…
Does a city owe sales tax when it demolishes a structure and removes debris from a landowner's property under its police powers?
Demolishing a structure down to the slab is not a taxable service, but removing the debris is. If one combined charge covers both, the whole charge is tax-free only if the debris-removal portion is 5%…
Do engineering and architectural design firms have to charge Texas sales tax on their professional design services?
Generally no. Texas does not tax engineering and architectural services on their own. A consulting engineer or architect designing the layout of a laboratory or office building does not owe tax on tha…
Does a business that sells computer-generated Lotto number picks based on statistical analysis of past winning numbers have to collect Texas sales tax?
Yes. The Comptroller told this taxpayer that selling computer-generated Lotto number selections, based on analyzing past winning numbers and other statistical factors, is a taxable information service…
Which charges on a repossession/debt-collection company's invoice are taxable, and can the company or its creditor-clients use resale certificates for repossession-related expenses?
Most of a repossession company's miscellaneous invoice items (storage fees, long-distance calls, informant fees, key-making) are taxable as part of the taxable debt collection service, except separate…
When a cable TV company hires a third party to collect past-due bills and to pick up converter boxes from delinquent accounts, are those third-party services taxable 'debt collection services'?
Yes to both. This internal Comptroller memo concludes that a third party hired by a cable TV company to collect past-due accounts is providing a taxable 'debt collection service' under Tax Code Sectio…
Can a paging company give its phone company a resale certificate for the phone exchange numbers and trunk lines it leases and then passes on to its paging customers?
Yes. The Comptroller confirmed that a paging service provider that purchases or leases phone exchange numbers and trunk lines from the local telephone company, and then assigns those numbers to its ow…
If a software dealer earns a commission on a software vendor's sale and then separately installs and maintains that software for the buyer, is the dealer's installation and maintenance work taxed as part of the software sale?
No. This internal Comptroller memo concludes that a dealer's separate agreement to install and maintain software is treated as a transaction unrelated to the software vendor's sale, and is not taxable…
Browse Texas rulings by topic
These are official tax letter rulings and advisory opinions issued by Texas's revenue authority in response to questions from specific taxpayers about how the tax law applies to their facts. A ruling is binding on the department only for the taxpayer who requested it and cannot be relied on by anyone else, but it is strong evidence of how the state reads the law. Every ruling above has a plain-English question and short answer, plus a link to the full original source.