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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Were compensated risk-management services taxable insurance inspection services in Texas?
Yes. Risk managers' evaluation and risk-reduction advice fell within taxable insurance inspection under Rule 3.355(a)(2), so they needed a sales-tax permit and had to collect tax.
How did Texas tax billboard-face rotation, painting steel billboard structures, other sign repairs, transferred materials, and mowing around signs?
Billboard-face rotation and steel-structure painting were taxable real-property work. Other sign repair was taxable as personal-property service, and most mowing around signs was taxable.
Were post-completion punch-list charges for fixing scratches and dents or moving plugs taxable under Texas's 1988 real-property rules?
Yes. Once original construction was complete, charges to fix scratches or dents or move plugs were taxable. On repair or remodeling contracts, labor performed after December 31, 1987 was taxable.
Were daily gauge readings and written reports taxable when a pumper also performed minor well-site maintenance?
Gauge reading and written reports alone were not taxable, but the provider's general equipment maintenance made the described service taxable. The Comptroller approved the tax being charged.
Could a seller obtain a Texas refund of tax, penalty, or interest collected from customers before returning the tax and interest to those customers?
No. Rule 3.325(c)(4) required the seller to refund all tax and interest to the people from whom it collected them before the state would refund the seller's tax, penalty, or interest.
When were lump-sum bookkeeping, bundled payroll data work, and separately stated computer-generated reports taxable in Texas?
Lump-sum bookkeeping was not taxable. Bundled payroll data work at 5% or less of the total stayed nontaxable, but separately stated computer-generated report charges were taxable.
Was the described child-identification program a taxable service, did it need a Texas sales-tax permit, and how were its supplies treated?
The program was not a taxable service and did not need a sales-tax permit. It still had to pay sales tax on all materials and supplies used to provide the service.
Was a lump-sum pit-scale installation incorporated into an existing dirt road fully taxable after Texas's January 1, 1988 real-property change?
Yes, for work on or after January 1, 1988, because the scale was incorporated into an existing road. The letter applied a historical 7% rate because the agreement predated the county tax.
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.
How did Texas's 1988 rules treat HVAC maintenance contracts, repairs, residential and commercial installations, freight, tools, refunds, and window units?
Routine real-property maintenance was nontaxable if repairs stayed within 5%; commercial repair was taxable, residential and new-construction labor was not, and window-unit work was taxable.
When could sellers accept resale or agricultural-exemption certificates for horseshoeing supplies, horseshoes, halters, and bridles?
Resale stores could give resale certificates. Horseshoers generally paid tax on supplies used in lump-sum jobs, but could buy separately resold items for resale. Horseshoes, halters, and bridles quali…
How did Texas tax painted or vinyl lettering on vehicles, movable signs, traffic signs, and commercial building doors, windows, and walls?
Vehicle and movable-sign work was taxable before and after the 1988 change. Commercial-building window, door, and wall graphics became taxable real-property remodeling on January 1, 1988.
How did Texas classify window air conditioners and portable buildings as tangible personal property or real property for repair-tax purposes?
Window-opening units were personal property; wall-installed units could be permanent realty. Portable buildings were real property only if permanently slab-affixed, plumbed, and wired.
Were claims-adjustment services exempt when provided to a federally administered flood-insurance program or to an insurer reimbursed by that program?
A FEMA-created and administered federal flood program was exempt, but services sold to an insurance company were taxable even when the federal program reimbursed the insurer.
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 confidential paleontologic and geologic analyses and studies taxable Texas information services?
No. Texas classified the described paleontologic and geologic work as an information service but treated the charges as nontaxable under Rule 3.342(d)(2), based on the exclusive-use facts presented.
Could a yearbook seller treat books distributed on one designated carnival day as tax-exempt while taxing all other distributions?
Yes. The Comptroller accepted the proposal to exempt yearbooks distributed on the first designated carnival day and tax all other distributions or sales, based on the facts presented.
Were freight and U.S. postage charges taxable when a parts seller arranged shipping and rebilled the customer?
Yes. Freight or postage that the seller incurred and rebilled to the customer was taxable. Transportation was not taxable when the customer arranged pickup and the freight company billed the customer …
Who collected and remitted Texas sales tax when a city bought commercial trash collection and billed its own customers?
The city did. After receiving additional contract facts, Texas treated the city as purchasing trash collection for resale. The city gave the contractor a resale certificate and was responsible for col…
Were gas-chart work, gas-volume calculations, and calibration or repair of oilfield meters taxable in Texas?
Gauger-like chart recording and volume calculations were nontaxable. Calibration and repair of meters on flow or gathering lines were taxable as personal-property work. Pipeline or booster-station met…
Was labor to repair or remodel a long road used primarily to access a residence nontaxable residential real-property work, even if it could also serve a ranch?
Yes, for the road leading to the residence. Farm and ranch roads were not normally residential, but the access portion serving the residence was a residential improvement under Rule 3.357.
How did Texas tax an association's member journal, magazine subscriptions, textbook sales by a Section 501(c)(3) organization, and out-of-state artwork?
Printing could be bought tax-free when a stated journal or magazine price made the publication a resale. Six-month-or-longer second-class-mail subscriptions were exempt, but single copies were taxable…
Which pest, insurance, and general real-estate inspection services were taxable under Texas's 1988 rules?
Pest-infestation inspections and insurance-related property inspections were taxable. General real-estate inspections of building components and systems were not taxable.
Were exercise bicycles and treadmills exempt therapeutic devices when sold on a doctor's prescription for rehabilitation?
Yes. Texas treated prescription exercise bicycles and treadmills sold for rehabilitation as exempt therapeutic devices. Sales to doctors, hospitals, or clinics were taxable unless the institution inde…
After revising its earlier answer, did Texas tax the total charge for providing and setting up chairs at a graveside?
No. The February 11 revision treated the total chair rental-and-setup charge as a nontaxable service because no true rental occurred and the funeral director did not have constructive possession of th…
Were speech and hearing evaluations or therapy taxable, and was calibrating customers' audiometers taxable?
Speech and hearing evaluations and therapy for communicatively handicapped people were not taxable. Calibrating audiometers for other agencies and industries was taxable.
Did a contractor charge Texas sales tax on lump-sum waterproofing, caulking, tuck-pointing, and sealing of existing commercial buildings?
Yes. Beginning January 1, 1988, the contractor had to tax the total materials-and-labor charge for repair or remodeling of existing commercial real property. The rule did not apply to new construction…
Was a separately stated 1% airport authority gross-receipts or commission fee included in the taxable sales price?
Yes, when connected with a taxable item or taxable labor. The fee was business overhead and stayed in the taxable sales price even if separately stated; overhead on nontaxable labor was not taxable.
Which ranch and oilfield jobs did Texas treat as new construction, taxable real-property repair, or taxable cleanup?
New fences, tank pads, working pits, and qualifying new water-line ditches were new construction. Work on existing roads, locations, cellars, and reserve pits was taxable repair; tank-battery cleanup …
Were oil-and-gas publications forecasting market trends taxable information services when sold to multiple subscribers?
Yes. Texas treated the publications as taxable information services because market forecasts were still news or information and the publications fit the oil-and-gas survey example. The particular-clie…
How did Texas tax water conditioning when the provider retained equipment control, sold and plumbed equipment, or performed scheduled maintenance?
Provider-controlled conditioning was nontaxable service. Sold equipment became realty when plumbed; existing commercial installation was taxable remodeling, while scheduled maintenance was nontaxable.
Was a demurrage fee based on welding cylinders still in the customer's possession at month-end subject to Texas sales tax?
No. Texas treated the described demurrage charge as a nontaxable penalty for returning a returnable container after the specified date. No fee was charged when the cylinder was returned before month-e…
Was coin wrapping taxable when offered by a security-services provider, and how were the wrapping supplies treated?
Coin wrapping was nontaxable when separately stated from taxable security services. The provider still had to pay sales tax on all supplies used in the wrapping service.
Were pickup, delivery, incoming-freight, and UPS charges taxable when connected with taxable sales, leases, or services?
Yes. Beginning October 1, 1987, Texas required sales tax on all transportation charges when the seller sold or leased tangible personal property or provided a taxable service such as repair.
Did Texas's affiliated-entity service exemption apply when a corporation provided taxable services to a partnership partly owned by an affiliate?
No. Because the partnership could not join the corporation's consolidated federal return, Texas treated the corporation's services to the partnership as taxable under Section 151.346.
Were house-cleaning services taxable when an individual, rather than a janitorial-service employee, was treated as the household's employee?
No. For sales-tax purposes, the individual was treated as an employee of the households that hired them, and the service earnings were treated like wages rather than taxable sales.
Which charges connected with selling invitations were taxable: printing and calligraphy, or separately stated addressing and mailing services?
Typesetting, printing invitations, and calligraphy were taxable. Separately stated charges for addressing envelopes, typing lists, mailing, looking up addresses, and preparing door or working guest li…
Which claimed exemptions made garbage collection or waste-removal services nontaxable under Texas's 1988 rules?
Residential and car-wash garbage collection remained taxable. Project-specific work for an exempt entity could qualify with an exemption certificate, and hazardous-waste removal could qualify if an ap…
Were sod installation, retaining-wall work, and landscape design or engineering taxable under Texas's 1988 rules?
Sod-installation labor was taxable for new and existing homes. Residential retaining-wall work and new nonresidential walls were contractor work; repair or remodeling of nonresidential walls was taxab…
Were house-cleaning services taxable when an individual cleaner was not an employee of a janitorial-service company?
No. For the stated facts, Texas treated the individual cleaner as the household customers' employee for sales-tax purposes, so the cleaner's earnings were treated like wages rather than taxable janito…
Which auto-glass, mirror, fabrication, tinting, upholstery, and installation labor charges did Texas treat as taxable in 1988?
Texas said damaged auto-glass replacement, auto tinting, and repair or replacement of worn automotive upholstery were not taxable labor. Custom fabrication, work on personal property, non-new-construc…
Could a welding-repair provider buy flux tax-free, or was the flux a taxable consumable supply?
It depended on use. Flux physically incorporated into and sold with the customer's property could be bought with a resale certificate. Flux consumed in the repair or used to clean a surface was taxabl…
How did Texas tax lump-sum rain-gutter installation on new or residential property versus replacement or repair on existing nonresidential property?
For new or residential lump-sum work, the installer paid tax on materials and did not tax the customer. Existing nonresidential repair or replacement was taxable on the total charge.
How did Texas tax swimming-pool maintenance, transferred chemicals, service equipment, lifeguard charges, and purchases by qualifying exempt organizations?
Pool maintenance was taxable on the total charge. Transferred chemicals could be bought for resale, provider equipment was taxable, and lifeguard service was nontaxable only if separately stated.
Were telecommunications equipment, installation, service-connection, maintenance, and in-wall wiring charges taxable in Texas?
Equipment sale, lease, rental, installation, service-connection, and hardware-maintenance charges were taxable. In-wall wiring was real property, and related labor was nontaxable when performed for ne…
Did a company incur successor liability for another business's Texas sales tax when a proposed purchase was terminated and no consideration was paid?
No. Because the purchase agreement ended and the prospective buyer paid no consideration for the business or stock of goods, it should not have successor liability for the seller's sales tax.
Which diabetic equipment, medicine, food, accessories, and shipping charges were exempt or taxable under Texas's 1988 rules?
The answer varied by product and buyer. Prescribed therapeutic devices sold to individuals, insulin, qualifying syringes, and certain prescribed glucose or monitoring items were exempt; many accessori…
Were a company's ultrasonic radiography, magnetic-particle, and dye-penetrant testing services taxable in Texas?
No. Texas treated the described nondestructive testing services—ultrasonic radiography, magnetic-particle testing, and dye-penetrant testing—as nontaxable testing services.
Could an airline take delivery of taxable items in Texas without sales tax when it transported them outside Texas?
Yes. A common carrier could purchase and take delivery of taxable items in Texas without sales tax when the carrier delivered the items outside Texas under its bill of lading.
Were a common carrier's natural gas, electricity, local exchange service, and certain interstate telephone services exempt from Texas sales tax?
No. The carrier's gas and electricity were taxable, as were basic local exchange service and interstate calls that originated from and were billed to a Texas number or service address.
Which receivables-management activities were taxable, and when did the 5% rule make a mixed lump-sum charge fully taxable?
Current-account collection was nontaxable, while insurance-claim processing and computerized billing were taxable. If bundled taxable services exceeded 5% of the total, the full lump sum was taxable.
Were two-way and C.B. radios sold to farmers or ranchers exempt as agricultural equipment, and were installation charges taxable?
No agricultural exemption applied. Two-way and C.B. radios remained taxable even when installed in a tractor or combine, and installation charges were also taxable beginning October 1, 1987.
How did Texas tax a sign company's freight, artwork, crane lifts, lot shredding, real-estate signs, and pylon-sign work in 1988?
Texas gave different answers by service. Freight tied to a taxable sale, artwork, lot shredding, real-estate signs, signs added to existing pylons, and later pylon-sign repairs were taxable; crane-onl…
Was a property owners' association's single annual fee taxable when the association bought taxable items and services for members?
No. The association's annual fee charged to property owners was not taxable. The association instead had to pay tax when buying taxable tangible personal property and taxable services.
Which oil-well, right-of-way, pipeline, and boundary surveys did Texas treat as taxable in 1988?
Oil-well placement and pipeline-location surveys were not taxable when separated from boundary work. Right-of-way boundary surveys and surveys of boundaries around an oil or gas well unit were taxable…
Was labor to repair, paint, or remodel homes, townhouses, condominiums, apartment complexes, and apartment laundry rooms taxable in Texas?
No. Those areas were residential, including unoccupied homes listed for sale and apartment laundry rooms. A separate apartment-complex office was commercial and its labor was taxable.
Which topographical, pipeline, construction-location, well-placement, and well-plat surveying services were taxable in Texas?
Topographical surveys and surveys locating a new residence or commercial structure within a lot were nontaxable. Locating an existing pipeline in an existing right-of-way and preparing plats showing w…
When were grease-trap pumping and sewer cleaning taxable, and which local rate applied to carpet routed through San Antonio for Houston installation?
Grease-trap pumping and related sewer cleaning were nontaxable only when they qualified as documented maintenance under Rule 3.357; otherwise they were taxable nonresidential real-property repair labo…
How did Texas tax vehicle, camper, commercial-building, residential, and new-construction window tinting, plus auto-upholstery and furniture repair?
Vehicle tinting and auto-upholstery labor followed motor-vehicle contractor treatment; commercial-building tinting was taxable in full, residential and new-structure tinting was not, and furniture rep…
Was an arborist's consultation or plant-disease diagnosis taxable even when no tree or shrub treatment was performed?
Yes. Correcting an earlier answer, the Comptroller said arborist consultation and disease or infestation diagnosis were taxable landscaping services even without treatment. Tax applied to the total se…
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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.