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 glider rental, tow, and flight-instruction charges taxable in Texas?
The glider rental and tow were taxable, while instruction was nontaxable. The glider itself could be bought for resale but did not qualify for the aircraft exemption.
Was a restaurant disco bar's cover charge taxable when its only live entertainment was a disc jockey?
Yes. The Comptroller said the cover charge was taxable under the stated disco-bar and disc-jockey facts.
Could a signed shipper's letter of instruction plus a house bill serve as Texas proof of export?
Yes. A freight-forwarder-signed SLI accompanied by a house airway, ocean, or rail bill was acceptable proof under Section 151.307(b)(4).
Did a parent corporation owe Texas sales tax when a subsidiary transferred maritime equipment as a dividend using a nominal Coast Guard bill of sale?
No, as long as the Coast Guard fee shown for the required bill of sale was minimal.
Was applying protective chemicals to carpet and upholstery taxable, and could verbal agency advice relieve back tax?
The service was taxable. Relief could be available if an agency employee confirmed the contrary advice and the business proved reliance; otherwise back tax was due.
Was a separately stated handling charge connected with a taxable repair service subject to Texas sales tax?
Yes. The Comptroller confirmed that handling charges connected with a taxable repair service were taxable to the customer.
Could the national Girl Scouts organization, local councils, and individual troops buy equipment and supplies tax-free in Texas?
Yes, for their own use. The exemption belonged to the organizations and did not extend to individual members.
Did equipment trade-in value reduce the amount subject to Texas sales tax?
Yes, if the trade-in was a taxable item of a type the retailer normally sold.
Were backhoe-with-operator charges connected with flowline repairs taxable in Texas?
They were taxable when charged by the flowline repair company as part of its repair service, but nontaxable when a third party provided only the backhoe and operator.
Was a federally tax-exempt association required to collect Texas sales tax on tickets to its annual football game?
No. The Comptroller said the association was exempt from collecting and paying sales tax on the event's ticket sales under Section 151.3101.
Could an electric cooperative recover tax on its ownership share of generating-project property purchased after its operating agreement?
Yes, for purchases from the agreement date based on its ownership percentage, using supplier refunds and a project-specific exemption certificate; earlier purchases did not qualify.
How did Texas's October 1, 1985 telecom change affect packet-switching and data-processing charges?
Actual data processing remained nontaxable, but the intrastate long-distance portion had to be separately stated and taxed; incidental modems remained provider-taxed inputs.
Was a service that amplified and retransmitted two-way-radio signals taxable in Texas?
Yes, effective October 1, 1985, because the statutory telecommunications definition encompassed radio signal booster service.
Could a health spa collect Texas sales tax on only 10% of its membership dues and fees?
No. Membership fees were fully taxable unless each member could select services or classes so that the individual's fee was unique.
Was a voice-message retrieval service that signaled customers' pagers taxable in Texas?
Yes. The Comptroller classified it as taxable telecommunications service, including telephone paging, rather than excluded computer time sharing.
How did Texas sales tax apply to an oilfield electrician's repairs, installations, modifications, and real-property work?
Repairs and modifications to personal property were generally fully taxable; new installations and material sales taxed materials but not labor or equipment, while identified real-property work was no…
Did the 30-day export presumption apply to goods held by a freight forwarder arranging shipment?
No. A retailer with the proof specified by Rule 3.323(c)(1) was not responsible for the 30-day period, and a forwarder's shipment arrangements were not purchaser storage.
How did an advertising agency's role as agent, seller, or consumer affect Texas sales tax?
The Comptroller could not classify the listed charges without knowing the agency's role; Rule 3.321 imposed different results for agents, sellers, and consumers.
Did holding goods for export over 30 days defeat a refund, and how were bonded imports treated?
A customs broker's prompt receipt and holding for shipment could overcome the storage presumption; imports retained import status while in bond, and resale could still prevent use tax after removal.
Which carpet, upholstery, Scotchgard, and deodorizer services and purchases were taxable in Texas?
Carpet and furniture-upholstery services were taxable, while automobile-upholstery cleaning and Scotchgard were not; cleaning chemicals were taxable inputs, but transferred deodorizer and Scotchgard w…
Were sterile arthroscopy drapes exempt as orthopedic, prosthetic, or therapeutic devices?
No. Although necessary to surgery, the drapes did not qualify under those device or appliance categories and remained taxable.
Were lime and crushed limestone used as a feedlot desiccant exempt from Texas sales tax?
Yes. The products qualified for exemption, and the purchaser could give the supplier an exemption certificate instead of paying tax.
Could a health club treat on-site equipment as rented to members because membership fees were taxable?
No. Members' on-site use was not an equipment rental, so the health club owed tax when purchasing its equipment and supplies.
Could trip tickets or truck logs prove export to Mexico under the new Texas export regulations?
No. The letter said trip tickets and truck logs were no longer acceptable; customs-broker documentation or a Mexican pedimento appeared suitable for these transactions.
Which charges for moving, assembling, setting, loading, and hauling a pumping unit were taxable?
Setting an assembled unit on its base was not taxable, but assembly was taxable; a combined assembly-and-setting charge was fully taxable, as were the invoiced loading and hauling charges.
Could a storage-trailer lessor buy repair parts tax-free for resale when attaching them to rented or leased trailers?
Yes under the rule described. Storage trailers were motor vehicles taxed under Chapter 152, but their repair parts were taxable items governed by Chapter 151. Rule 3.285(a) allowed resale treatment wh…
Was a cervical pillow taxable when sold to a hospital, and could a prescription change the result?
The pillow was taxable when sold to a hospital, but it could qualify as an exempt therapeutic device when sold to an individual on a doctor's prescription.
Were membership fees charged by a video dating and social club subject to Texas sales tax?
No. The club's membership fees were not taxable where members used video technology and resumes to screen potential dates.
Were Ensure, Nutriment, and the Complete B tube-feeding formula exempt from Texas sales tax?
Yes. Ensure and Nutriment were exempt food products, and Complete B was also exempt based on its marketing and food ingredients.
Could an airline buy or temporarily store materials tax-free before shipping them to Saudi Arabia?
Yes, under the stated conditions. Airline-carried items qualified under the common-carrier exemption; sea shipments needed export proof, and qualifying out-of-state purchases could be stored temporari…
Did assigning or factoring equipment leases accelerate Texas sales tax, and who remained liable?
Assignment generally made tax due on remaining operating-lease payments unless it was loan collateral. On the stated cash-basis facts, tax continued as payments arrived, but the lessor remained ultima…
Who owed Texas sales tax on corrugated steel pipe used for erosion control on farms and ranches?
The pipe was not agriculturally exempt. A landowner owed tax on what it bought; the exempt district did not owe tax on its share, with contractor rules depending on lump-sum versus separated billing.
When did charges for intrastate facsimile transmissions become taxable in Texas?
October 1, 1985. New legislation classified intrastate telecommunications as taxable services, and the letter applied that change to intrastate fax transmissions.
Were a nonprofit's public and season-ticket-holder parking charges exempt from Texas sales tax?
No. Daily public parking and parking sold to season-ticket holders were taxable, even though the organization was exempt under Section 501(c)(3).
Did an office-furnishings dealer have to collect tax from a freight carrier for repairing damaged inventory?
No. The dealer could buy repair materials with a resale certificate, collect tax when the restored merchandise was sold, and did not have to collect tax from the carrier.
How should a computer-maintenance company buy and tax repair parts used under old and newly taxable service agreements?
It could keep parts in tax-free resale inventory. Parts used for agreements entered before October 2, 1984 required accrued use tax; the Comptroller agreed with the stated procedure for taxed agreemen…
How did Texas classify swabbing, paraffin cutting, fishing, offshore work, and swab-tank rentals?
Results depended on the job: swabbing and frac-related fishing were nontaxable, paraffin cutting and ordinary fishing were taxable, offshore work beyond Texas limits was not, and bare swab-tank rental…
Was removing paraffin from the producing string of an oil well subject to Texas sales tax?
Yes. The service was taxable, and the provider was told to collect and remit tax going forward while retaining the letter for any examination of earlier periods.
Were components of a specialized honey house used only to process the beekeeper's own honey exempt?
Yes, on the stated facts. The on-farm structure was built only for extracting and bottling the beekeeper's own honey and was not used for storage or offices.
How did discounts and refunds for unused diamonds affect tax on diamond drill-bit sales?
A cash discount at sale reduced the taxable price, but a later credit for returned unused diamonds did not. A supposed deposit stayed in the tax base unless fully refunded with its tax.
Were single-use Quick Cups consumed in mandatory metal-casting quality control exempt from Texas sales tax?
Yes. The cups qualified because they were used and consumed in the manufacturing process, and the manufacturer could give its supplier an exemption certificate.
Was corrugated metal pipe used for soil conservation on a farm or ranch exempt from Texas sales tax?
No. The pipe was taxable, and the purchaser had to pay tax on its full purchase price; the described agricultural exemption covered qualifying machinery or equipment.
Were charges to clean commercial vessels and marine cargo containers taxable in Texas?
Not when the vessel exceeded eight tons displacement and was used exclusively for commercial purposes. Cleaning was taxable if the vessel displaced less than eight tons before loading.
When did an 800-number parts-locator hotline fee become taxable?
The fee was then nontaxable, but the entire member charge would become taxable October 1 under new intrastate-telecommunications legislation.
How did tank capacity and reclaimed-oil credits affect tax on oil-tank cleaning?
Cleaning tanks over 500 barrels was nontaxable real-property maintenance; cleaning tanks of 500 barrels or less was taxable before the reclaimed-oil credit.
Why did Texas require conservation districts to collect tax on farm erosion-control pipe?
The Comptroller treated the pipe as part of real property, not exempt farm machinery or equipment, based on a court decision about a concrete irrigation ditch.
Which charges connected with rented downhole tools were taxable?
Thread protectors, repairs, and delivery were taxable; inspection, lost-tool damages, and restocking were not. The lessor owed tax on materials for free ring gauges.
Were separately billed spool removal, wire-line repair, replacement, and installation charges taxable?
Yes. All described charges were taxable repairs; out-of-state work required use tax on the total when the customer returned the unit to Texas.
When should sales tax be included in freight or insurance claims for damaged goods?
Treatment depended on claimant and salvage facts. Consumer claims included prior tax; seller or resale-inventory claims generally did not, with tax collected on later salvage sales.
Did sending employees or contractors into Texas for computer repairs create taxable representation?
Yes. A repair employee established representation, making repair charges and later property sales taxable; contractor-performed repairs rebilled by the seller were also taxable.
Were installation-instruction labels affixed to windows exempt from Texas sales tax?
Yes. The labels qualified for exemption when they were affixed to the windows and sold together with the windows. The letter did not address unattached labels or any other facts.
Was furnishing and finishing installation of a marble whirlpool tub a sale or an improvement to realty?
It was an improvement to realty, not a sale-and-installation transaction. If the stated single-line billing controlled, Company A acted as a lump-sum contractor: it paid tax to suppliers on materials …
Which swabbing, wireline, nitrogen, tubing, snubbing, and well-control services were taxable?
Treatment depended on the exact operation and when and where it occurred. General maintenance swabbing was temporarily taxable, while starting a well was not; many formation, drilling, workover, compl…
When did a binding quote or blanket purchase order qualify for Texas's prior-contract exemption?
A binding written quote made before a tax or rate increase qualified, and blanket orders issued under it also qualified for up to three years. More-expensive customer changes or tax-driven changes end…
Did the exemption for hypodermic needles and syringes also cover repair parts, replacement parts, hubless needles, and long chucks?
Yes. The Comptroller said the shown syringe repair and replacement parts, hubless needles, and long chucks qualified along with exempt hypodermic needles and syringes.
Could a building manager exempt electricity reimbursed by a portrait-studio tenant?
Not on the stated facts. The manager was recovering a building expense, not selling electricity, and could exempt the master-meter purchase only if more than 50% of all measured electricity was used i…
Which vehicle-detailing charges were taxable, and how did the Comptroller correct its earlier answer?
Sun-roof installation, retail cleaning products, and carpet shampoo were taxable. Interior detailing, hand washing, vacuuming, paint or fabric protection, roof cleaning, and listed specialty cleaning …
How did Texas classify oilfield welding and determine the city tax rate?
Oilfield welding was presumed to be performed on tangible personal property unless the invoice clearly showed real-property work. The local rate depended on where work orders were accepted; orders acc…
What made the submitted agricultural exemption certificate acceptable to a Texas seller?
The form relieved the seller when the purchaser completed it, the seller accepted it in good faith, it was signed and dated, the goods were eligible, and the form was tied to the invoice. STAR warns t…
Was bulk material used to make short-lived prototype patterns exempt from Texas sales tax?
No. The bulk material was taxable because the prototype patterns were not directly used in manufacturing and did not qualify for exemption, even though an accurate prototype led to creation of a perma…
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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.