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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Was leasing compiled lists of unfavorable tenants to multiple landlords a taxable Texas information service?
Yes, on the described facts. Texas treated gathering current information about prospective renters, compiling it into lists, and leasing the lists to clients as a taxable information service. Creditwo…
Did an out-of-state credit-reporting vendor have to collect Texas tax on reports mailed into Texas?
Not if the vendor was not doing business in Texas. The Texas purchaser was responsible for any use tax due. The report was taxable when both the credit applicant and the requesting person's Texas conn…
Did Texas tax motor-vehicle storage without the owner's consent, and did licensing or general-purpose storage change the result?
Motor-vehicle storage was taxable whether or not the owner consented and whether or not the facility required a license. General-purpose storage was outside the provision when customers could store an…
Were psychotherapist services subject to Texas sales tax?
No. The Comptroller said psychotherapist services were not subject to sales tax.
How did Texas tax a stadium's passed-through security and cleaning charges, employee security, cable fees, network services, and satellite uplinking?
Exact third-party security or cleaning pass-throughs required no extra tax when the contractor charged correctly, though tax had to be shown. Stadium-employee security, cable charges, network services…
Did Texas sales tax apply to tickets sold and delivered to out-of-state customers when the amusement event occurred in Texas?
Yes. Texas required sales tax on tickets sold and delivered outside the state when the amusement event itself occurred in Texas, and instructed the operator to begin collecting immediately.
Were swimming-pool cleaning, water testing, and chemical-addition services taxable when performed together or billed separately?
Yes. Texas treated pool cleaning and maintenance as taxable beginning October 1, 1987, and treated water testing and adding chemicals as taxable cleaning and maintenance whether separately performed o…
Was labor to demolish a building taxable as real-property repair or remodeling, and which rules governed mixed construction and debris removal?
Demolition labor was not taxable as real-property repair or remodeling. Rule 3.357 governed contracts combining new construction and remodeling, while Rule 3.356 separately governed garbage collection…
When did a law-firm investigator's work become taxable licensed security service rather than nontaxable employee wages?
Regular employee wages were nontaxable when the investigator qualified for the Act's employee exemption. Licensed or permit-required contract security work was taxable, including work for the law firm…
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…
Which bookkeeping, accounting, tax-return, financial-statement, payroll, billing, check-preparation, notary, and consulting services were taxable?
Bookkeeping and accounting work, tax returns, financial statements, notary work, and tax consultation were nontaxable. Payroll-return filing, W-2 and payroll-check preparation, computerized receivable…
Were regular elevator maintenance contracts taxable, who paid tax on included parts, and could older repair or remodeling contracts qualify for prior-contract relief?
Regular real-property maintenance was nontaxable, and the provider paid tax on all materials used. A taxable repair or remodeling contract signed on or before July 21, 1987 could qualify for prior-con…
Were provider-controlled portable-exchange and automatic water-softening systems taxable equipment rentals or nontaxable services?
They were nontaxable services, not equipment rentals, because the provider retained ownership and control and performed all operation, maintenance, and repair. Billing equipment and service separately…
Was finish-out redone for the first actual tenant taxable after an owner had already completed speculative finish-out before leasing the space?
Yes. The Tax Policy Committee concluded that once speculative finish-out had been completed, later modifications for the actual tenant were taxable.
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…
Was a bail-bond service among the services made taxable by Texas's recent 1988-era sales-tax law change?
No. The Comptroller said the bail-bond business did not fall within any service made taxable by the recent law change.
Was an alarm company's building prewiring taxable when performed as part of installing a permanent burglar-alarm system?
Yes. The total alarm-system charge, including prewiring, was taxable as a security service, and future system-maintenance charges were also taxable. The specific security-service tax controlled over t…
How did Texas tax elevator and escalator installation, modernization, maintenance contracts, and repair orders in new or existing buildings?
New-building installation labor was nontaxable. Installation or modernization in existing nonresidential buildings and repair orders were taxable on the total charge. Maintenance of real property was …
How did Texas tax plant leasing and maintenance, proprietary consulting for television commercials, and wardrobe clothing rentals?
Plant rental and maintenance were taxable, while client-specific proprietary consulting was nontaxable. Wardrobe clothing leases were taxable; items known to be exclusively for lease could be bought f…
Did a newcomer welcome service collect Texas sales tax from sponsors for coupon distribution, gifts, and monthly reports?
Yes. The service collected tax from sponsors. A church or newspaper could give a reason-specific exemption certificate, the service could buy printing and gifts for resale, and separately billed coupo…
Did soluble oil, hydraulic oil, and Cyclean filter paper used to manufacture aluminum cans qualify for Texas's manufacturing exemption?
The soluble oil used in cup-forming and can-stretching and the hydraulic oil used in the bodymaker press qualified under Rule 3.300(d)(3). Cyclean filter paper used to refurbish and reuse washed-off o…
Did a tax clause in rental, lease, and service agreements destroy the prior-contract exemption from Texas's October 1, 1987 rate increase?
No, the submitted clause did not. Rule 3.319(c)(4) instead disqualified contracts that specifically shifted tax-rate changes to the customer. The exemption ended when the original agreement ended or J…
Were county publications listing properties posted for foreclosure or already sold taxable information services?
Yes. Texas treated the foreclosure-posting, completed-sale, and referenced trustee and mortgagee listing publications as taxable information services.
Did Texas exclude capital improvements from the new sales-tax treatment of real-property remodeling?
No. The Tax Policy Committee concluded that remodeling included capital improvements, and the Chief Deputy Comptroller approved that decision.
Was a yearly scheduled turnaround on a cat-cracker unit taxable repair or nontaxable real-property maintenance?
It was nontaxable maintenance because the turnaround was scheduled, recurring, preventive work performed before the unit failed.
Was a service that converted insurance applications into computer printouts of rates and premiums taxable in Texas?
Yes. Texas treated the described rating service as a taxable insurance service and required the provider to obtain a Texas sales-tax permit.
Was researching whether property taxes were paid and issuing a certificate to a title company a taxable information service?
Yes. The research-and-certificate charge was taxable as an information service. Separately stated courthouse copy and similar charges incurred during the research were nontaxable.
Were chimney sweeping and residential chimney-top, brick, and mortar replacement labor taxable in Texas?
Chimney sweeping was taxable. Labor to replace chimney tops, brick, and mortar on residential real property was nontaxable, and the contractor could pay tax to suppliers and quote the customer a tax-i…
Were natural gas and electricity used to prepare refrigerated or frozen catered food exempt from Texas sales tax?
No. Because the same entity prepared and sold the food through its restaurant or catering business, the natural gas and electricity did not qualify for exemption as of October 1, 1987.
Could a direct-payment permit holder claim credit for tax-paid inventory later removed for exclusive offshore mineral exploration or production?
Yes, if the items had no prior use and were used exclusively offshore outside Texas's territorial limits. Credit used the same rate originally accrued and paid, required purchase, removal, and tax rec…
Could a vending-machine operator include sales tax in the item price and back it out of total gross receipts?
Yes. Candy, gum, mints, soft drinks, and cigarettes were taxed on total gross receipts, but the operator could include tax in the sales price and back the tax out of gross receipts.
Were property-tax certificates prepared for title companies taxable information services, and could government-copy costs be excluded?
Yes. Gathering the taxes due or paid on a specific property for a title company was a taxable information service. The cost of copies obtained from a government agency could be excluded from the tax b…
Was a title-search report based on courthouse records taxable, and could separately stated government copy charges be excluded?
Yes. The December 31 letter superseded an October 20 nontaxable answer and treated the title-search report as a taxable information service. Separately stated governmental copy charges could be exclud…
Were Oklahoma data-processing services supplied to Texas financial institutions subject to Texas use tax beginning January 1, 1988?
Yes. After reviewing the servicing agreement and marketing brochure, Texas said the financial-institution data-processing services became taxable January 1, 1988. Because performance occurred in Oklah…
Were janitorial services taxable when a corporation provided them to a partnership in which the corporation was a principal or member?
Yes. Texas treated the corporation and partnership as separate and distinct entities and found no exemption for the taxable janitorial transaction between them.
Did an aircraft lessor's sale qualify as an occasional sale, and was additional tax due after rental taxes already exceeded purchase tax?
Yes, on the stated facts. The aircraft sale qualified as an occasional sale, and no additional tax was due because tax collected and paid on rental or lease charges exceeded the tax that would have ap…
How did Texas distinguish taxable software sales and modifications from nontaxable programming, training, and computer consulting?
The letter taxed completed-program sales and seller-performed modifications, installation, and maintenance, while separately stated training and consultation were generally nontaxable. Modifying softw…
Could subcontracts and material orders signed after July 21, 1987 qualify for Texas's prior-contract exemption when based on earlier bids?
Yes, if the bids were intended for a general contract entered before July 21, 1987 and that contract's final terms were substantially similar to the original bids. On those facts, later-signed subcont…
Were services performed under an industrial-discharge permit issued under Texas Water Code Chapter 26 taxable?
No. Based on the injection-well facts, the Comptroller confirmed that services performed under a permit issued under Texas Water Code Chapter 26 were not subject to sales tax under historical Rule 3.3…
How did Texas tax sales and moves of used houses, new foundations, customer-owned house moves, repairs, and subcontractor work before attachment to realty?
When the business owned and sold a used house, the house and moving charges were taxable, while foundation treatment depended on lump-sum or separated billing. Customer-owned house moving was nontaxab…
Did Texas's manufacturing-utility sales-tax exemption apply to propane, and what remedy was available for sales tax paid on propane purchases?
No. The letter said propane was subject to fuels tax rather than limited sales tax, while the manufacturing-utility exemption was limited to natural gas and electricity. Any sales tax paid on propane …
Did Texas base the October 1, 1987 transition for taxing insurance services on when the service was performed or when it was billed?
The service date controlled. Services performed before October 1, 1987 were not taxable even if billed on or after that date, while services performed on or after October 1 were taxable.
When did Texas treat an accountant's computer work as taxable data processing rather than nontaxable professional accounting?
Computer word processing, accounts-receivable billing, and payroll-check printing were taxable data processing. Financial reports, printed tax returns, and other work requiring accounting or tax exper…
Were transportation, delivery, and handling charges connected with taxable tangible personal property taxable when separately stated?
Yes. Transportation and delivery charges for tangible personal property sold, leased, or rented were taxable even when occurring after the transaction and separately stated. Handling charges tied to a…
Did Texas's tax policy committee view painting as maintenance under the proposed 1987 real-property repair and remodeling rule?
The committee's provisional view was that painting was not maintenance unless it was a regularly scheduled activity. The agency also said it would reexamine the entire proposed rule before adoption, s…
Were labor to assemble or reconfigure modular office furniture and charges for refurbishment, disassembly, repair, handling, and transportation taxable?
Yes. Assembly into a finished usable product and reassembly into a new configuration were taxable, whether the furniture was sold by the provider or customer-owned. Refurbishment charges, including di…
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…
How much of a vending machine's receipts was taxable when the operator could not determine the number of candy products sold from a machine containing candy and food?
Texas required tax on candy and soft-drink receipts. If the operator could not determine the number of candy products sold from a machine containing candy, tax was due on 100% of that machine's total …
Which manual and computer-based tax, payroll, accounting, reporting, and consulting services did Texas treat as taxable?
Manual tax returns, financial reports, manual consulting, and manual miscellaneous reports were nontaxable. Computer payroll became taxable January 1, 1988, and computer-prepared accounting records we…
Did a specially designed 60-by-100-foot building for processing, packing, and marketing an owner's vegetables qualify as exempt agricultural equipment?
No. Texas said the building did not qualify as agricultural equipment. The historical exemption required exclusive qualifying use and a design so mechanically specialized that the structure functioned…
Were hourly charges for landmen and lawyers to inspect private tract books taxable when customers read and copied the information themselves?
Yes. Texas treated the hourly access charge as a taxable information service even though the provider did not transmit, explain, or write down the information and the tract books were not public recor…
Did a lease stating a fixed rental payment 'plus sales and use tax' lose its Texas prior-contract exemption?
No. That wording did not defeat the exemption. Historical Rule 3.319(c)(4) instead disqualified contracts expressly making the customer responsible for tax-rate changes or increases, because the selle…
Was labor to originally install, repair, or service specified improvements to residential real property taxable under this 1987 Texas letter?
No. The letter said original installation labor for underground lawn sprinklers, storm windows and doors, siding, original painting, and roofing was nontaxable. Repair and service labor for those impr…
Did a community association correctly collect tax on residents' share of private garbage collection after a City of Houston reimbursement?
Yes. The association received a monthly city payment, billed residents for the remaining contractor cost, and correctly charged the historical 6% state, 1% city, and 1% MTA taxes on the amount billed …
How did Texas tax swimming-pool cleaning, maintenance, minor equipment work, and separately performed significant repairs under this December 1987 letter?
Pool cleaning and maintenance was taxable on the total bill beginning October 1, 1987, including minor equipment work performed as part of that service. Separately charged labor for significant repair…
How did Texas treat HVAC and ventilation repair labor and maintenance contracts for residential and commercial property, and when was tax reported?
Commercial-property repair labor became taxable January 1, 1988, while repair labor on a personal residence's central HVAC and ventilation system was nontaxable. Qualifying maintenance contracts were …
Were tree trimming and grass mowing along electric-power-line rights-of-way taxable in Texas?
No. The letter said trimming trees and mowing grass along electric-power-line rights-of-way were not taxable. It did not decide cutting, hauling, public-road, residential, or golf-course work despite …
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 engineering inspections, investigations, research, analysis, and failure-cause work taxable when connected to an insurance policy?
Yes. Each listed engineering function was taxable when performed for an insurance carrier, its insured, its policyholders, or others if the work pertained to a policy issued by an insurance company.
Did a Texas installer have to charge sales tax on separately stated labor for installing doors, windows, and skirting on residents' mobile homes?
No. The Comptroller treated the installation as nontaxable residential repair and remodeling labor because it was performed for mobile-home residents and labor was separately stated. The materials cha…
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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.