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 separately stated travel time and trip expenses for piano repair and maintenance taxable in Texas?
Yes. The Comptroller said transportation and other expenses connected with taxable repair or maintenance services were taxable, so tax had to be collected on the travel-time and expense charges.
Were charges to install and remove rented telephone wire and radio equipment at drilling rigs taxable in Texas?
Yes. Wire setup and removal were taxable labor connected with a rental, and radio installation and removal were taxable as part of the telecommunications service provided with the equipment and freque…
Was a police officer's reimbursement to a Texas city for a third badge and carrier subject to sales tax?
Yes. The city could buy all three badges and carriers tax free, but the officer's reimbursement for the third set was a taxable sale by the city to an individual.
Could a Texas seller accept a California permit number on an out-of-state distributor's resale certificate for Texas drop shipments?
Yes, in good faith, if the buyer was a bona fide out-of-state retailer buying for resale and had no Texas permit. If it was engaged in business in Texas, it instead needed a Texas permit and had to co…
Was electricity used to pump salt water into oilfield disposal wells exempt from Texas sales tax?
It depended on the water. Electricity used to pump naturally occurring salt water was exempt, while electricity used to pump man-made, artificially mixed salt water was taxable.
Was a machine shop's separately stated EPA processing fee taxable when charged with engine repair work?
The fee followed the underlying labor. It was taxable when connected with taxable repair work, but not when connected with nontaxable automotive-engine repair or maintenance.
Who could certify a Texas predominant-use study for natural gas and electricity if the signer was not a registered engineer?
The signer needed an engineering degree from an accredited engineering college and had to provide an original signature. A copy of the degree and accreditation information could document qualification…
Were an insurance company's separately contracted workplace-safety and loss-prevention consulting services taxable in Texas?
Generally yes when the services pertained to insurance policies. The provider had to presume taxability unless the client supplied a valid exemption certificate, such as one documenting self-insured s…
Was auto detailing taxable in Texas, and did separately charging for carpet cleaning change the answer?
A lump-sum auto-detailing service was not taxable, but a separately stated automobile carpet-cleaning charge was taxable and required a permit. Separately stated upholstery cleaning remained nontaxabl…
Was a golf club's $45,000 initiation fee exempt as a written refundable fee when the eventual refund amount was uncertain?
Only partly resolved. The Comptroller said at least the club's $6,000 transfer fee was taxable, but required the bylaws and membership contract before deciding the remaining initiation-fee balance.
Were labor and parts to clean and repair reusable ISO marine cargo tank containers exempt from Texas sales tax?
Yes, if the containers qualified under Rule 3.297(b)(2) as component parts of commercial vessels exceeding eight tons displacement and the customer supplied an exemption certificate.
Could a buyer purchasing goods only for export outside the United States obtain a Texas permit and use resale certificates?
No. The letter said export-only purchases were outside the resale definition. The buyer instead had to document export with carrier, customs, destination-country, or freight-forwarder records.
Was a customer's original purchase of exclusively created software from a contract programmer taxable in Texas?
No. The original custom-software purchase was not subject to sales or use tax because the customer obtained ownership rights. The customer then had to collect sales tax on copies sold to others.
Was transferring an Oregon corporation's operating assets to a related Texas corporation subject to Texas use tax?
Not if the transfer was a capital contribution with no consideration. Cash, stock issued where ownership was below 100%, or debt forgiveness or assumption could make it a sale; a transfer of all opera…
Was restoring a customer's dirty solvent and returning that same solvent taxable repair or manufacturing processing in Texas?
It was repair, not processing. The Comptroller corrected an earlier letter because restoring the same customer's solvent to usable condition fit Rule 3.292 and was expressly excluded from processing b…
How could a Section 501(c)(7) club recover Texas tax it mistakenly collected on pre-October 1991 member charges?
The club first had to refund members or credit their accounts with written permission. Only then could it seek state reimbursement or a return credit under Rule 3.325, within the four-year limitations…
Did an equipment lease with a purchase option equal to 10% of original cost automatically qualify as a Texas financing lease?
No automatic answer was possible. The option was nominal only if, when the contract was signed, it was estimated to be less than 10% of the equipment's fair market value when exercised, or another Rul…
Which parking-lot, street, debris-scraping, and ice-control cleaning services were taxable in Texas?
Parking-lot sweeping, power washing, and periodic cleaning were taxable from December 6, 1991. Public-road cleaning and debris scraping, plus salt or sand spread for icy driveways or sidewalks, were n…
Were public-street cleaning charges taxable, and did fixed-price contracts signed before December 6, 1991, receive transition relief?
Public-road and public-street cleaning was not taxable. Fixed-price parking-lot or sidewalk cleaning contracts signed before December 6, 1991, stayed untaxed until renewal, extension, or renegotiation…
When did Texas begin taxing parking-lot cleaning, and were older fixed-price contracts protected?
Parking-lot sweeping and cleaning became taxable December 6, 1991. Binding fixed-price contracts signed earlier stayed untaxed until renewed, extended, or renegotiated; public-road cleaning remained n…
Were repair parts installed in Texas on foreign-plated vehicles exempt when the vehicles were immediately driven back to Mexico?
No. Driving the installed parts in Texas on the trip to Mexico was Texas use, so the parts lost their export character and the seller had to collect sales tax.
Could a Section 501(c)(7) singles club recover tax collected on dues and admissions, and were its member charges taxable?
The club first had to refund tax to members and guests before claiming a state refund or credit. The letter said membership dues were not taxable, but separate dance or entertainment admission charges…
Which industrial testing, inspection, training, heat-treating, and welding-information services were taxable in Texas?
Testing, training, inspection, expediting, and AutoCAD inspection reports were nontaxable. Heat treating that restored weakened property was taxable repair, and welding-code publications were taxable …
How did Texas tax vehicle window etching with a theft guarantee and a chemical protection package with a warranty?
Window etching was taxable; a mandatory bundled guarantee made the whole charge taxable, while an optional guarantee was not. Chemical protection application and its warranty were exempt, but the deal…
When were the oilfield services in this Texas letter nontaxable completion work rather than taxable tubing-fishing repair?
The letter's Item 1 services were nontaxable because they accompanied completion work bringing a well to productive status. Item 2 was taxable because fishing for tubing repaired or maintained tangibl…
Could an exempt oil-and-gas operator buy taxable goods and services for jointly owned properties without paying suppliers Texas tax?
Yes, using a resale certificate, but it had to allocate the purchases and collect tax from nonexempt joint owners on their billed shares. Its own share stayed exempt, subject to records and certificat…
Could parts and consumable supplies bought in Texas for African and federal offshore drilling platforms qualify for export or drilling-equipment exemptions?
Parts and consumables could qualify for an export refund if exported from the United States without Texas use or consumption. The narrower drilling-equipment exemption required detailed facts about ea…
Was a flat-day-rate horizontal drilling package with specialized equipment and technical personnel taxable in Texas?
No. The complex planning, measurement, and drilling package was a nontaxable service, and equipment was incidental. The provider paid tax on its inputs; actual standalone equipment sales or rentals re…
Were private-club locker, room, boat-slip, golf-cart, bag-storage, and minimum food-and-beverage charges taxable in Texas?
Yes. The Comptroller treated them as payments for special membership privileges, taxable whether separately stated and, for food minimums, even if the member never consumed food or beverages.
Was an incineration facility's charge to destroy hazardous medical waste collected from healthcare facilities taxable in Texas?
No. The Comptroller said the incinerator's charge to destroy the medical waste was not taxable on the stated facts.
Were dues paid by dart clubs to a Section 501(c)(7) association taxable when the association provided no dartboards or amusement facilities?
No. The association's member-club dues were nontaxable because it provided no amusement facilities. Individual clubs that did provide facilities had to tax dues collected from their own members.
Were public admission charges to automobile shows run by Section 501(c)(6) new-car trade associations taxable in Texas?
No. The Comptroller said the trade associations' public auto-show admissions were exempt under Rule 3.298(g)(1)(A).
Could a business obtain a permanent 30-day extension for filing Texas sales-tax returns because it handled a large volume of returns?
No. The Code did not allow a permanent extension. The Comptroller could grant one discretionary 45-day extension for unusual circumstances, with a written request and payment of 90% of estimated tax, …
Was a building-attendant service that checked equipment and called employees about problems taxable as Texas security service?
No. The attendant only monitored systems, turned off equipment left on, and notified employees without making repairs, and the state licensing board said the service did not require a security-agency …
Were charges to wash or sweep Texas parking lots, sidewalks, driveways, drive-throughs, and delivery areas taxable?
Yes, beginning December 6, 1991, under the Rule 3.356 amendment. Sweeping or otherwise cleaning public roads and public streets remained nontaxable.
Could a federal credit union buy beer and wine for its grand opening without paying Texas sales or use tax?
Yes. A federal credit union organized under 12 U.S.C. § 1768 was exempt on taxable items or services bought for its own use and could give the seller an exemption certificate.
How did Texas distinguish lump-sum repair and painting charges for motor vehicles from charges for equipment?
Equipment repair or painting was fully taxable. Lump-sum motor-vehicle repair or painting was nontaxable to the customer while the provider paid tax on materials; one combined vehicle-and-equipment pa…
How did Texas tax permanent truck and railroad scale installations in existing roadbeds versus new construction?
Upgrading an existing roadbed was fully taxable remodeling. New construction followed lump-sum or separated-contractor rules; qualifying railroad-track materials could be exempt, but scales not essent…
Were remodeling materials and labor exempt for a historic building owned by an exempt entity but primarily used by its for-profit subsidiary?
Materials were taxable because the for-profit subsidiary received the primary benefit. National Register listing could exempt remodeling labor, but not materials; Texas Historical Commission listing a…
How did resale certificates and sales-tax permits work through general contractors and subcontractors on separated Texas construction contracts?
Each separated new-construction contractor needed its own permit and resale certificates. Subcontractors accepted certificates from generals, and the general collected from the owner; nonresidential r…
When could federal real-property contractors buy incorporated materials without Texas tax after the 1991 House Bill 11 changes?
Only through qualifying prior-contract relief, a separated new-construction contract, or otherwise taxable nonresidential repair or remodeling. Equipment and ordinary consumables remained taxable to t…
What documentation made a municipal construction contract separated, and did a Texas city need to issue exemption certificates with progress payments?
The signed separated contract itself proved sales of incorporated materials to the exempt municipality, so no municipal exemption certificate was required. Unit-price bid documents needed binding tax …
Which farm and ranch software programs qualified for Texas's agricultural sales-tax exemption?
Five listed livestock and meat-management programs were exempt when bought by original producers for their own products. Bookkeeping, recordkeeping, accounting, mixed-use programs, and sales to nonpro…
Did natural-gas and electric-service contracts qualify for prior-contract protection from Texas tax-rate increases when they passed tax changes to customers?
No. The pass-through clause shifted tax increases to customers, defeating prior-contract relief under Rule 3.319(c)(3), and any rate increase made the agreements new contracts under Rule 3.319(c)(2).
Were club memberships tax exempt when a university paid for memberships issued in individual employees' names?
No. Employees were not exempt entities merely because they worked for the university, and university payment did not turn individual memberships into sales to the university. A membership issued direc…
Which archery-club dues, range fees, tournament entry fees, admissions, prizes, and concession sales were taxable in Texas?
Club dues and range fees were taxable. Genuine competition entry fees could be nontaxable when they substantially exceeded ordinary range use or were paid only to compete; admissions, concessions, and…
Were unused private-club food, beverage, and liquor minimum charges subject to Texas sales tax?
Unused food and beverage minimums were taxable for nonprofit Section 501(c)(7) clubs from October 1, 1991, and for-profit clubs from October 1, 1987. Liquor minimums subject to alcoholic-beverage gros…
How did Texas tax floor-covering installation, materials, tools, and labor for remodeling, new construction, and residential jobs?
Nonresidential floor-covering remodeling was taxable on the total materials-and-labor charge. New construction, unfinished pre-occupancy buildings, residences, and new additions followed contractor ru…
What Texas state and local sales taxes applied when hotel guests called a Richardson provider for information or call-connection services?
Texas callers buying information owed state tax, Richardson city tax, and any applicable caller-location local taxes, capped at 8.25%. Connecting a caller to a local number was telecommunications serv…
Did packaging, unpacking material, and broken pallets count as industrial solid waste for the nontaxable-removal treatment in Rule 3.356?
No. The Comptroller said shipping refuse such as packing and unpacking materials and broken pallets was not industrial solid waste because it did not result from the actual manufacturing or processing…
How did Texas tax replacement-building construction and the demolition, removal, testing, cleanup, and replacement of underground fuel tanks?
Replacement-building labor was nontaxable new construction. For tank work, excavation and soil testing were nontaxable; hauling away the tank and ordinary soil was taxable waste removal; contaminated …
What portion of vending-machine receipts did Texas require the operator to report for candy, drinks, juice, cookies, and snack foods?
The operator had to report tax on 100% of receipts from candy, sodas, and juice that was not 100% pure fruit juice. It reported tax on 50% of receipts from cookies, granola bars, snack mix, peanuts, c…
Was excavating and reinforcing an existing factory foundation for new heavy equipment treated as new construction or taxable remodeling?
It was remodeling, not new construction, because the work upgraded an existing structure. Since the work was performed under a lump-sum contract, the Comptroller said the total charge was taxable.
Did the City of Dallas have to collect sales or use tax on a floodplain-reclassification application and permit fee?
No. The $750-to-$1,400 city application and permit fee was not a sale of tangible personal property or a taxable service, so it was not subject to Texas sales or use tax.
Were property-tax research, mortgage analysis, tax-return preparation, and electronic filing services taxable in Texas?
Property-tax research was taxable information service, except a separately stated pass-through of the actual public-record cost. Tax-return preparation was not taxable, but a separately stated electro…
Which accounting-software setup, consulting, support, and data-conversion charges were taxable in Texas?
When the provider sold the software, related accounting setup, organizational advice, supplemental instructions, and technical troubleshooting were taxable. Extracting and transferring customer, vendo…
Was a telephone company's purchase of local-exchange access exempt when it resold the telecommunications service to final customers?
Yes, if the purchasing telephone company resold the service and gave a valid resale certificate. The final consumer owed tax on the total service charge, including access; mixed-use purchasers could n…
Could a pallet seller accept an exemption certificate when manufacturers bought wooden pallets to ship their manufactured products?
Yes. A manufacturer could give the seller an exemption certificate for pallets used to ship its manufactured products, including pallets sent directly to a third-party distribution center. The exempti…
Were live telephone-answering charges taxable when provided to both in-house executive-suite clients and off-site telephone clients?
Yes. The Comptroller said all charges for providing answering services were subject to Texas sales tax, regardless of where in Texas the customer was located.
Can a Texas vehicle-accessory installer refund sales tax when installed parts leave Texas in a vehicle driven to Mexico?
No. Parts and materials installed on a vehicle in Texas were used in Texas before export, so driving the vehicle to Mexico afterward—even with customs-broker proof—did not qualify the sale for an expo…
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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.