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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How could a customer seek a Texas sales-tax refund after taking possession in Texas and exporting the goods to Canada?
The customer needed Canadian customs entry documents and purchase receipts showing import within 30 days, then had to request a refund from each merchant.
Did a city have to collect Texas tax when it repaired sidewalks or drive approaches and billed residential or commercial property owners?
Treatment depended on the property and right-of-way. Accepted city rights-of-way were exempt; private residential lump sums were not collected, while private commercial work was taxable.
How did Texas classify 900-number access, cellular and messaging services, online information, modem services, and merchandise sold through a 900 number?
The letter classified each offering by service type; 900-number access was telecommunications, and the provider also had to collect tax on taxable merchandise sold through the number.
Could a customs cartman who was not a licensed U.S. Customs Broker certify Texas sales-tax exports to Mexico?
No. The cartman could not certify the export, but could document it by returning a Mexican customs pedimento de importaciones to the customer.
Were copyrighted-image license fees, image-research fees, image lists, catalogs, and transportation charges taxable in Texas?
The reproduction license and COMPANY X's own-inventory research fee were nontaxable, but third-party image lists were taxable information and sold catalogs were taxable property.
Was natural gas used to heat chicken houses exempt from Texas sales tax, and could the operator obtain a refund for prior billing periods?
Potentially. Gas used to raise chickens for sale or produce eggs was exempt agricultural use, but other meter uses required a predominant-use study and the Comptroller requested more facts before deci…
Was labor to repair or remodel a tenant-only laundry room in an apartment complex subject to Texas sales tax?
No. A laundry room limited to tenants and guests was residential real property, so repair-and-remodeling labor was not taxable; the requester could pursue refunds for tax paid to contractors.
Were geophysical services using seismic-data processing taxable Texas data-processing services?
Not when professional geophysical interpretation was provided and data processing was only a tool. Pure data manipulation without analysis or professional evaluation was taxable data processing.
How did Texas tax auto-alarm installation and window tinting for vehicles, commercial buildings, residences, and new structures?
Auto alarms and commercial-building tinting were taxable. Vehicle tinting and residential or new-structure tinting depended on lump-sum versus separated billing, with labor not taxed in the described …
Were a nonlicensed company's real-time video transmissions for Texas television stations exempt as broadcasts by licensed stations?
No. The company sold taxable telecommunications services and had to collect tax because it was not itself a licensed or regulated commercial television station covered by the broadcast exemption.
When did a yearbook seller or school have to collect Texas sales tax on yearbooks bought for students?
Tax depended on who bought and resold the books. Exempt schools could buy qualifying books tax-free, but student payments and school resales generally were taxable except for the letter's limited one-…
Could a teacher buy classroom supplies with personal funds without paying Texas sales tax if the school reimbursed the purchase?
No. The teacher had to pay sales tax even if reimbursed and even if the items were used only in class; the public school could instead make the purchase directly under its exemption.
Did a Texas hotel owe tax when it gave guests complimentary coffee, champagne, candy, or flowers?
Unprepared coffee carried no use tax when given free, but the hotel owed tax on the cost of taxable champagne, candy, and unbilled flowers; separately billed flowers were taxed to the guest.
How did Texas tax commercial air-conditioning contracts combining scheduled maintenance, parts, and repairs?
A maintenance-only lump sum was nontaxable, but separately billed repairs were taxable. A mixed lump sum was taxable unless repairs were 5% or less or a documented repair allocation was used.
Which parts of a new narrow-gauge railroad project qualified for Texas's rolling-stock and train-supplies sales-tax exemption?
The engine, tender, passenger cars, and materials incorporated into the operating track were exempt, but station and maintenance-facility materials and other nonessential construction were taxable.
Did a Texas seller need a separate exemption certificate when a government agency supplied an official purchase order or state voucher?
No separate certificate was required when the official purchase order or state voucher supplied the necessary exemption information, but the seller still had to keep supporting documentation.
Was Texas sales tax due when a mover disassembled, transported, and reassembled an existing portable hot tub?
No. Because the company only moved the existing tub and did not sell, remodel, repair, or permanently install it, its disassembly, transportation, and reassembly charges were nontaxable.
Did a registered self-employed massage therapist have to collect Texas sales tax after February 1, 1991?
No. The Rule 3.317 change ended tax collection on registered massage services as of February 1, 1991; a therapist with no other taxable sales also did not need a sales-tax permit.
How did Texas tax sales of recyclable cardboard and a hauler's fee for taking the cardboard to a dealer when the hauler and customer shared sale proceeds?
The cardboard sale was taxable unless supported by a resale or manufacturing exemption certificate, but the $75 hauling fee was nontaxable transportation tied to the property sale.
How did Texas separate new construction from remodeling when a project added four floors and expanded an existing building?
Work in the added footage was new construction, while changes to the existing structure were remodeling. A mixed lump sum was fully taxable if remodeling exceeded 5% unless separately stated.
Could a licensed customs broker use a power of attorney to obtain merchant refunds and pay Texas sales tax directly to Mexican customers at export?
No. The broker could document the export, but the purchaser had to present that documentation to the seller for the refund, and a cash refund required the seller to obtain the purchaser's signed recei…
How did Texas tax motor-vehicle service contracts, repairs performed under them, and customer deductibles?
The vehicle service contract itself was not taxed. Lump-sum covered repairs were nontaxable, while separately stated parts were taxable; a deductible reduced the balance paid by the underwriter.
Was an equipment lessor's reimbursement for property tax subject to Texas sales tax when billed to the lessee?
Not when separately stated from the equipment lease price. If the property-tax amount was included in the lease price, sales tax applied to the total charge.
Could a Mexican farmer use Texas's agricultural exemption certificate to buy qualifying veterinary supplies tax-free?
Yes. The letter applied the same qualifying agricultural-item exemption to Mexican and Texas farmers; taxable purchases could instead use the export-and-refund procedure.
Were Texas oilfield vacuum, fluid, pumping, and well-maintenance services always subject to the same sales-tax treatment?
No. The primary purpose of each job controlled. Vacuum removal for transport or disposal was listed as exempt from limited sales tax, while many equipment-cleaning and repair jobs were taxable.
Was Texas use tax due on out-of-state stone processing and freight when the processed stone entered Texas for construction?
Yes. The raw stone purchase was exempt, but the New Mexico processing charge and billed freight were taxable when the stone entered Texas for a lump-sum construction job.
Who owed Texas use tax when an out-of-state leased vehicle was brought into Texas?
The lessee bringing the vehicle into Texas was responsible. The 1991 letter computed 6% use tax on the out-of-state lessor's original purchase price, allowed credit for tax legally due and paid to ano…
Was satellite-based positioning equipment exempt when bolted or welded onto commercial oil-and-gas vessels?
Yes. The equipment became an exempt component part when bolted or welded to a vessel used in a commercial enterprise.
Was electricity used to make metal frames exempt when the business both sold frames over the counter and installed frames into real property?
Only partly. Electricity used for frames sold as tangible property was exempt; use for frames incorporated into real property was taxable and had to be allocated by equipment hours.
Did a homeowners association owe Texas sales tax on swimming-pool maintenance, and could it avoid tax with a federal ID number?
Pool maintenance was taxable, and a federal ID number alone gave no exemption. The association needed Texas approval before giving the pool company an exemption certificate.
Was on-site biological remediation taxable garbage collection when microbes treated contaminated soil or water and the waste stayed at the site?
No. Treating the material with microbes and leaving it on site was not garbage collection or disposal, though the provider owed tax on equipment and supplies used.
Was a Cunningham clamp used to control incontinence exempt from Texas sales tax?
An implanted clamp was exempt. An externally used clamp qualified only when sold to an individual under a licensed healing practitioner's prescription.
Was a corporation's software-license transfer to a joint venture tax-free when the venture acquired it solely to relicense it to customers?
Yes. The transfer was a sale for resale, so the venture could issue a resale certificate, but it needed a sales-tax permit and owed tax on software bought for its own use.
Was an automobile-detailing service taxable when the business sold no products?
No. Texas said auto detailing was not taxable, but the detailing business had to pay sales tax when buying the supplies, materials, and equipment used to perform the service.
Was the reviewed vehicle rental-purchase contract an operating lease or a conditional sale?
It was an operating lease. The title owner bore the historical minimum tax liability and had to obtain a motor vehicle retailer permit. The right to return the vehicle or buy it at market value preven…
Was a one-time fee for setting up a new digital-pager rental account subject to Texas sales tax?
Yes. The activation fee was part of the consideration paid for renting the pager and was taxable.
Was a basket of cookies taxable when the package contained both exempt food and a taxable basket?
It depended on value. No tax was due if the basket was not the package's primary component, but the whole package was taxable if the basket was worth more than the cookies.
Were city-licensed horse-drawn carriage rides operated on public streets subject to Texas sales tax?
No. The carriages were treated as nontaxable transportation services rather than taxable amusement services when operated on public streets and licensed by the city.
Were indoor plant leasing, maintenance, sales, and short-term rentals taxable, and which inputs could the provider buy for resale?
They were taxable under the letter. The provider could buy plants and qualifying transferred inputs for resale, but STAR now directs readers to amended Rule 3.285 for current guidance.
Were stand-alone polygraph examinations used to investigate internal embezzlement subject to Texas sales tax?
No when billed by themselves under the stated facts. They became taxable when rebilled as part of an investigation requiring a licensed investigator.
Were medical-item purchases exempt from Texas sales tax merely because Medicare or Medicaid funded or reimbursed them?
No. The tax fell on the patient or health-care provider consuming the items, not directly on the United States, though independently exempt drugs, medicines, and devices remained exempt.
Was mowing vacant lots and acreage for weed and rodent control subject to Texas sales tax?
Yes. The work was taxable lawn maintenance, except when sold to a qualifying exempt organization or government customer with proper exemption documentation.
Did equipment used to rebuild engines or straighten collision-damaged vehicles qualify for Texas manufacturing refund and phase-in benefits?
Usually no for repair work. Engine equipment qualified only when used predominantly to manufacture rebuilt engines for inventory or exchange, while collision-repair equipment did not qualify.
Could a cable-franchise asset sale qualify as an occasional sale when the seller kept land, its office, cash, its name and logo, and some billing computers?
Yes. The listed real property, financial and identity assets were not operating assets, and withholding general-purpose billing computers did not by itself defeat the occasional-sale exemption.
Were multiday Rio Grande rafting trips exempt because they crossed into Mexico and sometimes camped outside Texas?
No. The rafting trips were taxable amusement services unless a trip lasted more than 24 hours with the group remaining entirely outside Texas territory.
Was labor for an annual acid wash of a large vessel treated as nontaxable real-property maintenance?
Yes, if the wash kept the real property in good working order and was performed on a documented scheduled, periodic basis. The provider still owed tax on items used.
Were sales of Vietnamese pot-bellied pigs exempt as animals whose products ordinarily constitute food for human consumption?
No. Texas sales tax applied whether the pigs were sold as pets or for breeding because they were not considered pork-producing animals ordinarily used for human food.
Was destroying an electronic chip layer by layer to diagram its pathways and prepare a client report subject to Texas sales tax?
No. The chip-analysis and reporting work was a nontaxable service, but the provider owed Texas sales or use tax on every item used to perform it.
Which utility bills had to support a predominant-use exemption or refund, and what happened when an invalid exemption was claimed?
Year-round businesses needed the latest 12 months; seasonal businesses needed bills for the operating period. Invalid claims triggered tax, penalty, and interest, generally within four years.
Did random or pre-employment drug testing require a private-investigator license, and how did STAR classify the tax result?
The memo says drug testing alone required no license, while an investigation did. STAR's official subject classifies testing alone as nontaxable and testing combined with licensed services as taxable.
Were automated employee-anniversary tracking and computer-generated award-recipient letters subject to Texas sales tax?
Yes. The tracking was taxable data processing, and sales tax applied to the total charge for producing the computer-generated letters.
Could a long-distance service seller shift its sales-tax filing, remittance, and recordkeeping liability to a billing-and-collection agent?
No. Texas allowed an agent to handle billing and collection, but each long-distance company remained responsible for its own tax collection, reporting, remittance, and sales records.
Were an electric cooperative's security-light charges taxable when the cooperative owned and controlled the light?
No if the cooperative retained ownership and control and the customer did not operate or maintain the light. Customer control made the total charge taxable.
Which utilities used to stone-wash, press, bag, package, and move garments counted as exempt processing use?
Utilities directly used to wash, press, and bag garments were exempt uses; shipping-package equipment, conveyors, general areas, and tenant utilities were taxable uses.
Was a separately stated optional road-hazard warranty sold with a tire subject to Texas sales tax?
No. Once installed, the tire was part of a motor vehicle, so the separately stated repair warranty was nontaxable; the warrantor owed tax on repair inputs.
Which veterinary drugs, devices, and animal feeds could be purchased tax-free under the Texas letter?
Prescribed animal drugs, hypodermic needles and syringes, prescribed dog and cat diet feed, and normal farm, ranch, or wildlife feed were exempt; other items were taxable unless bought for resale.
Was telephone software support taxable when the support was delivered to an out-of-state location for use outside Texas?
No. Software telephone support was taxable maintenance generally, but support delivered to an out-of-state location for use outside Texas was exempt under Texas Tax Code § 151.330(e).
Were charges for computer equipment repaired in Texas taxable when the repairer shipped the equipment back out of state?
No when the repairer shipped the equipment out of Texas and kept records proving shipment. If it shipped to a Texas location, the total charge was taxable.
Could a direct-payment permit holder choose which purchases and suppliers its certificate covered, and how were uncovered taxes handled?
Yes. The holder could use blanket, item-specific, or supplier-specific certificates, but had to pay or accrue all state and applicable local tax on other purchases.
Were purchases of oil-and-gas working interests with production equipment and an entire gas-processing plant subject to Texas sales tax?
No. The working interests and in-use basic production equipment were real property, and the entire gas-processing plant sale qualified as an occasional sale.
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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.