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.
No Texas rulings match these filters
Try a different search term or clear the filters.
Which animal feeds and horse health products were exempt, and when did the seller need an agricultural exemption certificate?
Catfish-pond and wild-bird feed were exempt without a certificate. Feed for rabbits raised for food or regular-course sale was exempt with a certificate because pet-rabbit feed was taxable. Horse medi…
Was restoration labor exempt when a building's listing in the National Register of Historic Places was still pending?
No. Because the building was not listed when the work was performed, the contractor had to tax the total charge. If the building was listed later, the customer could give the contractor an exemption c…
When did Texas exempt vessels, vessel components, or equipment used in offshore mineral exploration?
The operator was not exempt as an entity. A vessel over eight tons qualified only when bought from its builder for exclusive commercial use; attached component parts could qualify; and exploration equ…
Did the company's custom certificate form satisfy Texas resale and exemption certificate requirements?
No. The Comptroller said the submitted form omitted required information and directed the company to Rule 3.285(a) and (d)(2) for resale certificates and Rule 3.287(a) and (f) for exemption certificat…
Were labor, materials, and replacement parts used to repair railroad rolling stock taxable in Texas?
No. Because locomotives and rolling stock were themselves exempt, labor and materials for their repair or maintenance were exempt. The repairer could accept an exemption certificate and buy incorporat…
Can a Texas-exempt organization buy electricity tax-free and recover tax paid to its utility?
Yes, when the electricity serves the organization's exempt purpose. It must give the utility an exemption certificate and seek any refund from the utility, limited to the prior four years.
When could an exempt club buy restaurant meals tax-free for its meetings and programs?
When the club was the customer on the invoice, the meal served its exempt purpose, and the club paid the facility and supplied an exemption certificate. Members' own meals remained taxable.
Could farmers lease pecan shakers and sweepers under Texas's agricultural sales-tax exemption?
Yes, when used exclusively on a farm or ranch to produce and harvest pecans held for sale; equipment used for nuts not held for sale was taxable.
Could a builder give contractors exemption certificates for a facility built for two exempt organizations?
Yes. Because the job benefited two qualifying exempt organizations, the builder could give contractors a properly completed exemption certificate.
Were flowers bought by a church or a church-affiliated Sunday school class exempt from Texas sales tax?
A church's purchase was exempt, but a Sunday school class's purchase was taxable unless the flowers were strictly for church use.
Could Texas sellers accept resale and exemption certificates sent by fax?
Yes. The internal memo said faxed certificates were acceptable if they were currently dated, valid, and properly completed.
Did a customer claiming 100% exempt electricity use need a utility study and engineer certification?
No. A specific exemption certificate was enough for exclusive exempt use; studies and engineer certification applied to predominant-use claims.
Could an airline give an exemption certificate for approved improvements to public airport terminals?
Yes under the stated facts. The tax-exempt airport was the ultimate beneficiary, and the approved terminal improvements directly benefited the airport and public.
Could a private purchasing agent for NASA buy items tax-free, and what happened when the agent used the items itself?
Items transferred by title and possession to the federal government could be bought for resale. Items used by the private agent were taxable, because the agent was not exempt.
Which purchases for a bond-financed air-pollution-control facility were exempt from Texas sales tax?
Materials and equipment incorporated into the facility could be bought tax-free with an exemption certificate; items merely used but not installed were taxable.
Was bovine somatotropin used to stimulate dairy-cattle milk production exempt from Texas sales tax?
Yes, as medication or a tonic when used exclusively on a farm or dairy to produce agricultural products for sale and bought with an exemption certificate.
Could a credit-reporting service use a customer's historical taxable percentage for multistate purchases?
Yes. The customer could use prior-year data for an exemption certificate, but the percentage and certificate had to be updated annually and supported by records.
What did good-faith acceptance of resale or exemption certificates require from a Texas retailer?
A properly completed certificate protected a seller without requiring an investigation, unless the seller actually knew the claim was invalid or the item could not be resold.
Were enteral and parenteral feeding systems and their related supplies exempt as prosthetic devices?
Yes for the systems and supplies directly related to and integral to them. The exemption applied without a prescription but required a specific exemption certificate.
Did Texas grant governmental sales-tax exemption to a state-authorized transportation association?
Yes. The association could buy, lease, or rent taxable items tax-free for its exempt function with a certificate and seek refunds of tax paid on those items.
Is a weather-recording device used to time crop spraying taxable in Texas, or can a farmer buy it under the agricultural exemption?
A device that records weather conditions to determine the best time to spray crops is taxable tangible personal property in Texas, but it qualifies for the agricultural exemption when used on a farm o…
Is collecting and disposing of industrial solid waste taxable in Texas after October 1, 1987, and how do customers claim the exemption and get refunds?
Collecting industrial solid waste — as defined by the Texas Solid Waste Disposal Act (Art. 4477-7), except waste that is garbage or municipal solid waste — stopped being taxable in Texas effective Oct…
Are well services taxable in Texas when performed to complete a well into a new, deeper formation rather than to restore existing production?
Well services are not taxable in Texas when they are performed solely to facilitate completing the well-bore into a new, deeper formation — as opposed to restoring production in an existing zone (here…
Were broiler-house litter cleaning and wood shavings used as a farm desiccant taxable in Texas?
No. Texas said cleaning wood shavings and sawdust from broiler-house floors was a nontaxable service to farmers. The provider could buy shavings and sawdust tax-free with an exemption certificate when…
Did Texas sales tax apply when Kansas bought debt-collection services for Kansas tax debts owed by people or businesses in Texas?
No. The Comptroller agreed that Kansas was not doing business in Texas under Section 151.107 and could give an exemption stating that it was not engaged in business in Texas.
Was mesquite, hickory, or pecan wood used by restaurants to cook food for sale exempt from Texas sales tax?
Yes. Wood used to cook food for sale qualified for exemption, provided the seller obtained a properly completed exemption certificate from the purchaser.
Was the proposed Texas electricity sales-tax exemption certificate acceptable, and what was missing when a nonregistered engineer certified the study?
The certificate was otherwise acceptable, but it needed the owner's certification when the study was certified by an engineer who was not registered. Identifying the engineering college was suggested.
Could a supplier accept the exemption certificate printed on a purchase order for property bought for offshore exploration outside Texas?
Yes. The Comptroller found the purchase-order certificate sufficient for the described out-of-Texas offshore exploration use, so the supplier could accept it instead of tax.
Could a free weekly advertising shopping guide buy newsprint, ink, and outside printing without Texas sales tax?
Yes, if the guide was printed on newsprint and therefore qualified as a newspaper. It could issue an exemption certificate for newsprint, ink, and outside printing. If it was not printed on newsprint,…
Were claim-adjustment services sold to the National Flood Insurance Program exempt from Texas sales tax as a federal transaction?
Apparently yes, if the buyer was the federal government, a wholly owned federal corporation, or an unincorporated federal instrumentality and gave the seller an exemption certificate. Claims for priva…
Was an exemption certificate printed on a specific purchase order acceptable as a Texas direct-payment exemption certificate?
Yes. The purchase-order certificate contained the required language and was acceptable under Rule 3.288, but it covered only that specific purchase order and no other purchases.
How did a Methodist church document its Texas sales-tax exemption for purchases, including parsonage bills?
Texas said all Methodist Church branches qualified under Rule 3.322(c)(3). The state did not issue exemption numbers; the church gave each vendor an exemption certificate, and the certificate required…
When did municipal utility districts collect Texas sales tax on residential garbage service billed with water and sewer charges?
A separately itemized garbage fee was taxable and the district collected and reported the tax. No tax was due when garbage service had no specific charge or when its fee was combined with other nontax…
Did Texas treat repainting and reroofing as nontaxable real-property maintenance, and could repairers accept exemption certificates?
Repainting and reroofing remained taxable unless performed on a schedule under the proposed maintenance rule. Repairers and remodelers could accept exemption certificates when they had no reason to qu…
When were freight-collect charges taxable, and what historical state and local taxes did the Texas retailer have to collect?
Freight collect was nontaxable unless the retailer accounted for the transportation charge. The retailer otherwise had to collect applicable state and local taxes unless the customer supplied a resale…
Did an exemption from Texas's January 1, 1987 tax increase automatically cover the separate October 1, 1987 increase?
No. A customer needed a new exemption certificate for the October 1, 1987 increase. That exemption applied to qualifying bids and contracts entered on or before July 21, 1987 and lasted until the orig…
Were cargo condition and damage surveys taxable in Texas when performed for importers, exporters, cargo underwriters, and other principals?
Condition surveys were not taxable. An insurance-related damage survey was taxable on its total charge when the examined property was in Texas and the customer did business in Texas; otherwise the cus…
Could a service provider accept an exemption certificate from a federal credit union, and were loss or damage appraisals for insurers taxable when the property was credit-union financed?
A federal credit union was exempt when buying taxable items or services for its own use, and the seller could accept an exemption certificate. But loss or damage appraisals performed for insurance com…
When did a pre-July 21, 1987 trash-collection contract qualify for the prior-contract exemption, and did automatic renewal preserve the exemption?
A pre-July 21, 1987 contract could qualify if it fixed the price, service level, and period. On-request work did not qualify, a 30-day arrangement did not qualify, and exercising an automatic renewal …
Was job-site electricity exempt when used directly to power tools and welding equipment on wastewater-treatment projects for exempt customers?
Yes. Electricity used directly in construction for the listed exempt customers was exempt when the contractor gave the utility a certificate identifying the entity and project.
Could a buyer's self-assessment letter or combined purchase-order certificate protect a supplier that did not collect Texas sales tax?
No. Without a properly completed resale or exemption certificate, the supplier remained exposed to tax, penalty, and interest; the buyer needed a direct payment permit to self-accrue tax.
Did change orders and extras added to a pre-1987 Texas contract automatically qualify for the prior-contract sales-tax rate exemption?
No. Added work qualified only if the certificate issuer could prove the change resulted from factors beyond the parties' control; good-faith certificate acceptance protected the seller's audit positio…
Could a Texas industrial processor buy oxygen and similar gases tax-free when the gases were consumed in processing or used in repairs?
Gases consumed while processing an item for resale could be bought with an exemption or resale certificate. Gases used to repair tangible property were taxable supplies.
When did Texas exempt drilling rigs, components, and pipe bought for mineral exploration or production outside the state?
An intact or completed drilling rig and its accessories qualified when bought for use in another state. Pipe qualified only for an offshore facility beyond Texas territorial waters.
Could a contractor claim an exempt-entity construction exemption for an airport hangar expanded primarily for a private nonexempt user's benefit?
No. The Comptroller said materials and supplies were not exempt when exempt-owned realty was improved primarily for a nonexempt entity, so the certificate lacked good-faith support.
How did Texas tax a flint-coat process on oil-field casing and the sand, epoxy, and flint rock used in that process?
The processor's total customer charge was taxable. Sand consumed in the process and epoxy and flint rock transferred to the customer could be bought tax-free with exemption certificates.
Did a Texas taxpayer have to notify the Comptroller of contracts claimed exempt from the January 1, 1987 sales-tax rate increase?
No notice was required. The taxpayer had to keep the written contracts, bids, and exemption certificates available for a Comptroller auditor to verify the claimed exemptions.
Was Puerto Rico Marine Management entitled to Texas's sales-tax exemption for the United States government, and could other carrier exemptions apply?
No federal-government exemption applied. The Comptroller said specific purchases might instead qualify under interstate-shipment and common-carrier rules if supported by exemption certificates.
Could a Texas company claim exemption from city sales tax for taxable sales and deliveries at a terminal facility inside the city limits?
No. Because the terminal facility was within the city limits, taxable sales made there and taxable items delivered there remained subject to city tax unless the area was de-annexed and the Comptroller…
Which purchases by a Texas-exempt 501(c)(4) club were tax-free, including meals, office supplies, plaques, member gifts, and door prizes?
The club could buy operating supplies and club-paid meals tax-free. Individual-paid meals, plaques for former officers, member gifts, and door prizes were taxable.
Could a completed buyer registration and checkout card serve as a Texas resale certificate, and what audit records were required?
Yes. A fully completed card at each sale could serve as the resale certificate if buyer receipts were attached and grouped by sale; agricultural buyers still needed full exemption certificates.
Could a Texas electricity customer exempt only the percentage used in processing, or did predominant use make all electricity taxable or exempt?
Percentage exemption was not allowed. With only 6.7% exempt use, all electricity was taxable; if more than 50% was used for processing, all purchases would be exempt.
What information did a Texas utility need on exemption certificates from religious, 501(c), nonprofit, or other exempt-entity customers?
Certificates identifying a qualifying exemption type could be accepted. A certificate saying only 'nonprofit' or 'exempt' required verification; liability relief also required a complete certificate a…
Could purchase-order language serve as a Texas resale or exemption certificate, and when could blanket certificates or direct-payment permits be used?
The submitted purchase orders were insufficient. Certificates had to be recognizable, contain proper language, and have a certificate-specific signature; blanket certificates or a direct-payment permi…
Did a parking-contract rider qualify for prior-contract treatment, how were exemptions documented, and when was prepaid parking script taxed?
The indefinite-price rider did not qualify. Exemptions needed valid certificates and matching payment records; parking script was taxed when sold, so no second tax was due at redemption.
Could an exempt religious organization treat a requested payment for property as a donation rather than a sale?
No. If the organization did not freely give the item away, the payment-for-item exchange was a sale even when called a requested donation or paid in a different amount. Taxability depended on the item…
Could fishing nets be purchased tax-free as component parts of a commercial fishing boat?
Yes, under the later letter, when the boat exceeded eight tons displacement and was used commercially. The customer had to provide an exemption certificate; an earlier letter in the same record had de…
What did an airline need to show for out-of-state purchases temporarily stored at a Texas facility before being transported out of Texas for use solely elsewhere?
Section 151.011(e) excluded qualifying temporary storage from use tax, regardless of delivery method or payer. The airline needed purchase-specific certificates where required and detailed inbound, st…
Could schools buy trophies, ribbons, and letter jackets tax-free when awarding them to students, and when did an item become a taxable sale instead?
Schools could buy trophies, ribbons, and awarded letter jackets tax-free with an exemption certificate. An item was taxable when the student had to contribute to receive it or when a jacket was sold.
Could gases such as oxygen, carbon dioxide, nitrous oxide, and nitrogen qualify for a Texas sales-tax exemption when sold for medical use?
Yes, they could qualify when sold to doctors, hospitals, and other health-related organizations as drugs and medicines. The seller should obtain an exemption certificate from the customer.
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.