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 modular walk-in coolers and freezers that could be readily disassembled and relocated tangible personal property, and was labor on them taxable?
Yes. The pre-engineered modular units were tangible personal property, so assembly, installation, repair, maintenance, restoration, and remodeling labor was taxable.
Did Texas's agricultural exemption cover a forklift used exclusively in the field to load and unload a farmer's row crops and lawn turf?
Yes, under the stated facts. Because the farmer grew the crops from seed and was their original producer, a forklift used exclusively to load and unload row crops and turf in the field qualified for t…
When was a construction manager's supervision of commercial repair or remodeling a taxable real-property service rather than nontaxable supervision?
It was taxable when the manager was responsible for the overall job or contracted with subcontractors. Supervision alone was nontaxable when the manager had no responsibility for others' work.
Were independent insurance-adjuster charges taxable services or nontaxable amounts paid from insurance premiums?
They were taxable claims-adjustment or processing services under Section 151.0039. The Comptroller rejected the argument that the charges were part of or paid by insurance premiums.
Was a Texas tax preparer's charge for electronically transmitting completed return data by telephone to the IRS taxable?
Yes. The charge met the revised definition of taxable telecommunications service under Rule 3.344(a)(2) and (b)(4), despite an older rule copy previously sent to the requester.
How did Texas tax commercial pool repair or remodeling, new construction, and residential pool work beginning January 1, 1988?
Commercial pool repair or remodeling was taxable on the total charge. New structures, unfinished new work, added footage, and residential construction or repair had nontaxable labor.
Were hospital plant-and-equipment appraisals taxable insurance services when performed for acquisitions, financing, mergers, or Medicare and Medicaid qualification?
No. The appraisals were not performed on behalf of an insurer or another party connected with an insurance policy, so the letter did not treat them as taxable insurance services.
Who collected Texas sales tax when a scholarship-matching business hired an out-of-state company to send matched information directly to students?
The scholarship-matching business collected tax from students because it made the sale. The out-of-state supplier merely drop-shipped the matched information on the seller's behalf and could accept a …
Were buyers'-club fees, amended data-processing contracts, contract extensions, and separately stated finance-lease interest taxable?
The buyers' club's fee was taxable as an information service, not under the amusement-club rule. Data-processing contract amendments depended on their terms, but an extension created a new fully taxab…
When was a debt-collection service taxable based on the debtor's Texas address and the creditor's Texas location or business activity?
It was taxable when the debtor's address was in Texas when placed for collection and the creditor was located or doing business in Texas. A finance company doing business in Texas met the creditor con…
How did Texas's early-1988 guidance classify labor and materials for vehicle repair, salons, property services, HVAC, sewing, boats, welding, and appliances?
The letter gave service-by-service answers: salon labor and vehicle-repair labor were nontaxable, while many products, personal-property repairs, commercial realty work, sewing, welding, and appliance…
Were roof investigation, bid-document review, re-roof document preparation, and litigation reports taxable Texas information services?
No, not as information services. The Comptroller said the described roof consulting was not taxable on that basis, but warned that insurance loss or damage appraisals and insurance inspections could b…
Which computer consulting, programming, software sale, installation, training, maintenance, and client-data processing charges were taxable?
Consulting about data-processing needs and creating or modifying third-party programs were not taxable. Completed program sales, leases, or licenses and related modification, installation, and mainten…
Which oil-and-gas repair, remodeling, maintenance, and well services did Texas treat as taxable in February 1988?
Texas treated repair and remodeling of listed real property as taxable, and repair or maintenance of tangible personal property as taxable. Work inside a well bore was generally taxable, while work to…
Did Texas's 1988 internal policy require an out-of-state taxpayer with no Texas place of business to pay the sales-tax permit fee?
No. The internal memo said an out-of-state taxpayer without a place of business in Texas did not have to pay the permit fee, but staff had to process an individual waiver to issue the permit.
Did Texas's initial February 1988 response treat typing on a memory-capable typewriter as taxable word processing?
Yes. It treated the typing as taxable word processing under Rule 3.330, while résumé preparation and consultation were nontaxable. A later official response changed the typing conclusion after clarifi…
Which bookkeeping, payroll, computer-printing, consulting, and software-modification services did Texas treat as taxable in 1988?
Bookkeeping, tax-return preparation, financial statements, listed business consulting, and third-party software modification were not taxable. Computer printing, payroll tax returns, W-2s, payroll che…
Were environmental analytical sampling and testing services taxable Texas information services?
No. Texas treated the described environmental analytical sampling and testing for industry, government, consulting firms, and individuals as nontaxable information under Rule 3.342(d)(1).
Were customized financial-planning services taxable in Texas?
No. Texas treated as nontaxable the described service of evaluating a client's present finances, identifying the client's goals, and preparing a financial plan tailored to that client.
Could a rotary cutter used exclusively to mow weeds in a commercial pecan orchard qualify for Texas's agricultural machinery exemption?
Yes, conditionally. If the orchard operation met Rule 3.296's exemption for machinery used exclusively on a farm or ranch to produce food for sale, the buyer could give the seller an exemption certifi…
How did Texas distinguish nontaxable real-property maintenance from taxable repair, remodeling, sign, lighting, elevator, and air-conditioning work?
Scheduled real-property maintenance could be nontaxable, while repair and remodeling were taxable. Mixed lump-sum elevator work was taxable unless repair was 5% or less; sign and lighting work was oft…
Did a property owners' association have to collect Texas sales tax from members on an undivided maintenance charge?
No, on the described facts. The association consumed the services covered by the maintenance charge, so there was no sale to members. If it did not separately state member charges, it paid tax on its …
Was aerial spraying of agricultural crops on farms and ranches taxable when performed exclusively for agricultural purposes?
No. The Comptroller said aerial spraying of agricultural crops on farms and ranches was not taxable when the service was exclusively for agricultural purposes.
How did Texas tax residential ceiling-fan repair, tangible-personal-property repairs, trip charges, service contracts, and items shipped out of state?
Residential ceiling-fan repair labor and its trip charge were nontaxable, while personal-property repairs were taxable in full. Fan service-contract charges and out-of-state shipments were not taxable…
Which location determined Texas city, county, and MTA sales tax on cable-television service after August 31, 1987?
The customer's location. Cable companies had to use that basis beginning with each customer's regular monthly billing period starting on or after August 31, 1987. Previously, local tax followed the se…
Which telex and fax membership, intrastate, interstate, incoming-message, and refundable-deposit charges were taxable?
Membership and Texas-originated or intrastate message charges were taxable. Messages received from outside Texas were nontaxable, and the refundable $95 deposit was nontaxable unless applied to taxabl…
Was Enrich Liquid Nutrition with Fiber a tax-exempt food product rather than an over-the-counter drug or vitamin formula?
Yes. Texas classified Enrich Liquid Nutrition with Fiber as a food product, allowing grocery, drug, and department stores to sell it tax-free.
Were lump-sum balloon decorating, materials, labor, and delivered balloon arrangements taxable, and how did resale or prior tax payment work?
Yes. Total decorating and balloon-arrangement charges were taxable whether materials and labor were separated or not. Materials transferred to customers could be bought for resale; if tax was paid at …
Were pension-administration, retirement-plan recordkeeping, tax-form preparation, and benefit calculations taxable data processing?
No, when the administrator applied accounting principles or tax law as a professional service. Using a computer did not change that result. A mere service bureau that only processed returns and report…
How does Texas tax custom software, modifying purchased software, training, troubleshooting/maintenance, installation, and computer-run tax or payroll work?
Writing custom software from scratch (or modifying a program you didn't sell) is not taxable in Texas, and separately stated charges to instruct customers on using hardware or software are not taxable…
Were computer-consulting sessions and custom Lotus 1-2-3 templates or dBase III input and edit screens taxable?
Consulting was taxable when connected to taxable hardware or software the consultant sold. Creating templates or screens with the customer's own Lotus 1-2-3 or dBase III was nontaxable, but buying the…
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…
Were membership dues collected by a professional or business Breakfast Club taxable as amusement services?
Yes. Texas treated the dues as taxable amusement services. The letter said the dues were exempt only if the organization or association was nonprofit.
Which plumbing labor, mileage, hauling, and equipment charges were taxable for residential, commercial, and new-construction work?
Residential repair labor and mileage and new-construction work were nontaxable. Total charges for repairing or remodeling nonresidential real property were taxable. Sales-tax-exempt organizations qual…
Were full-coverage roof warranties taxable for nonresidential and residential property, and was repair work taxed during the warranty?
A warranty on a nonresidential roof was taxable, with no further tax on covered repair labor or materials when the warranty paid the total nonprorated repair cost. A residential roof warranty was nont…
How did Texas tax wallpaper installation in new construction, additions, existing nonresidential buildings, and residential property?
Wallpaper in new construction or a new addition was treated as an improvement to realty. In existing buildings outside finish-out, nonresidential remodeling labor was taxable and residential remodelin…
Was a singles-referral service that interviewed and tested clients before matching them taxable in Texas?
No. Texas treated the described singles-referral service as nontaxable when it used interviews and tests to match people with others having similar or desired personality types.
When were real-estate appraisal fees taxable as insurance services rather than nontaxable financing services?
An appraisal was taxable when used to value damages or estimate the quantity, value, or extent of property loss. A lender-required appraisal whose primary purpose was financing a loan was nontaxable b…
Were environmental inspections of septic systems and water wells taxable in Texas?
No. Texas treated the described environmental inspections of septic systems and water wells as nontaxable.
Did a mortgage company's ownership make otherwise residential property commercial for Texas repair-and-remodeling tax purposes?
No. Property meeting the letter's residential definition remained residential regardless of who owned it. The definition included family dwellings, multi-family apartment or housing complexes, nursing…
Were sewer and drain-line cleaning services taxable for commercial and residential property?
Beginning January 1, 1988, cleaning sewer and drain lines serving commercial property was taxable. The same service for residential property was nontaxable.
Which boundary, title, residential, lot, right-of-way, engineering, and marine surveying services were taxable under Texas's 1988 rules?
Surveying to determine or confirm property boundaries or locate structures relative to boundaries was taxable, including boundary recovery, title, residential, as-built title, lot, and right-of-way su…
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.
Were arson-investigation services taxable under Texas's insurance-services rule?
Yes. Texas treated arson investigation as a taxable insurance service effective October 1, 1987.
Which custom programming, software changes, data recovery, hardware setup, installation, training, spreadsheet design, and consulting services were taxable?
Many services were taxable when tied to hardware or software the provider sold, including custom programs, maintenance, installation, recovery, and troubleshooting. Separately stated training, nonprog…
Were demolition-site debris-removal charges taxable, and how did Texas treat a lump-sum demolition-and-removal contract?
Debris removal was taxable. A lump-sum contract combining demolition and removal was taxable on the total charge unless the removal portion represented 5% or less of the total contract price.
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…
Were Easy Lift Chairs, Tub-Lifts, vertical wheelchair Porch Lifts, and electric-wheelcart Truck Lifts exempt therapeutic devices?
Yes, when sold, leased, or rented to an individual under a written prescription from a licensed healing-arts practitioner.
Was an annual contract to train and advise a company's emergency response teams subject to Texas sales tax?
No. The Comptroller said the service was not taxable where the provider trained and advised emergency response teams in firefighting, first aid, and hazardous-material handling and delivered no tangib…
Did a hospital auxiliary's gift shop need a Texas sales-tax permit and have to collect tax from customers?
Yes. The hospital auxiliary's gift shop needed a sales-tax permit and was not exempt from collecting sales tax from its customers.
Were bundled commercial-mortgage servicing activities taxable when debt collection was incidental and insurance work was limited to monitoring coverage?
No. The described commercial-mortgage servicing package was nontaxable. Occasional debt collection included in one charge remained nontaxable when it was less than 5% of the total, and merely monitori…
When were maintenance and repair charges on permanently attached fire-alarm systems taxable, and who paid tax on maintenance materials?
Regular scheduled preventive maintenance on a functioning permanent fire-alarm system was nontaxable, and the service provider paid tax on materials. Repair or remodeling of a nonresidential system wa…
Were vault-storage services taxable, could security contracts qualify as prior contracts, and was motor-vehicle storage taxable?
Vault storage was nontaxable unless the provider had to hold a security-service license. Security contracts shifting tax increases to the customer failed the prior-contract exemption, while motor-vehi…
Were delivered singing message grams taxable under Texas's newly enacted service-tax legislation?
No. Texas treated the described singing-message delivery as a nontaxable personal service not covered by the recently enacted legislation.
Were helicopter-ride charges taxable as amusement services when the ride occurred in Texas?
Yes. Texas treated helicopter rides as taxable amusement services when the event or service location was in Texas. Operators had to hold sales-tax permits and collect tax; admissions to services outsi…
Was a fixed-fee service monitoring only high water levels for an oil company taxable as security or telecommunications service?
No. Texas treated the described high-water alarm monitoring charge as neither a security service nor a telecommunications service.
When were flooring materials and labor taxable for residential work, commercial new construction, and replacement in existing buildings?
Residential and commercial new-construction installation labor was nontaxable while materials were taxable. Repair or remodeling of nonresidential real property was taxable on the total charge, and th…
Which mortgage-service fees for appraisals, loan conversion, returned checks, schedules, documents, statements, research, coupon books, and insurance were taxable?
Appraisals for mortgage loans, adjustable-to-fixed conversion fees, returned-check fees, frequent balance inquiries, and early policy-substitution fees were nontaxable. Amortization schedules, later l…
Which title-company searches, abstracts, insurance, amortization schedules, closing charges, tax forms, and delivery fees were taxable?
Abstracts, title runs, tax searches, plant information, copies, and amortization schedules were taxable information services. Title-insurance premiums, certain shared-premium title evidence, escrow an…
Were property-insurance claim measurement, documentation, investigation, and report services taxable when the policyholder paid the firm?
Yes. Texas treated the work as taxable insurance loss or damage appraisal and claims adjustment or processing. The result did not change because the policyholder paid a percentage of the settlement ra…
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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.