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.
No Texas rulings match these filters
Try a different search term or clear the filters.
Was a service that photographed personal property and maintained descriptive records for possible insurance claims taxable in Texas?
Yes. The photography charge was taxable, and storing and maintaining the records was taxable data processing; qualifying production inputs could be exempt or bought for resale.
Were a debt collector's fees and the attorney fees it incurred to collect overdue accounts taxable in Texas?
The debt collector's compensation was taxable, but attorney services were not taxable debt collection when the attorney fees were separately stated from other charges.
Could automobile dealers and repairmen buy vehicle glazes tax-free in Texas?
Yes when the glaze was physically incorporated into a vehicle before the dealer's sale or by a repairman under a separated contract, supported by a resale certificate.
Which parts of a computer communication system for hearing-impaired users were exempt from Texas sales tax?
Prescribed adaptive software and telephone-communication peripherals were exempt, but general-purpose computers, screens, printers, and modems remained taxable.
When was electricity for rodeos, livestock auctions, salt-water disposal, water flooding, and exempt organizations exempt from Texas sales tax?
The result depended on the purchaser and use: qualifying exempt organizations and water-flood production qualified, while auction-barn power generally did not.
Were parts and labor used to repair leased marine cargo containers in Texas subject to sales tax?
No. Parts and labor were exempt because the containers were components of qualifying commercial vessels and were used exclusively in interstate and international commerce.
Could an air-show service provider buy souvenir programs tax-free when it supplied them at no direct charge to exempt sponsors or military bases?
No. Exempt sponsors did not exempt the provider's inputs; resale treatment required a separately stated sale, while qualifying direct out-of-state delivery was exempt.
Was a 4% municipal franchise fee included in the taxable sales price of electricity in Texas?
Yes. The entire fee was a utility business expense included in the taxable electricity sales price, whether embedded in the rate or separately billed to customers.
Were improvements made by a private lessor for a federal agency's leased office exempt from Texas sales tax?
Yes. The tailored, required improvements were for the federal agency's primary use and benefit, allowing qualifying materials and services to be purchased for resale.
Did a publisher owe Texas tax when it licensed a hotel-advertising software database to an airline for no charge?
No. The no-charge license created no collection duty; if the publisher later charged, the airline could buy for resale while continuing to tax its software sales or leases to travel agents.
Were amine and the products used to clean recycled amine exempt in a Texas natural-gas processing plant?
Amine was exempt because it directly purified gas held for sale, but filter elements, carbon, and defoamers used only to clean the amine were taxable.
Was restoring sludge-collection ponds exempt because the Texas Water Commission required the environmental work?
No. Texas treated pond cleaning as taxable restoration of nonresidential real property, not garbage removal; only regular employee wages for in-house work were untaxed.
Were pecan-cracking services and sales of smoked turkeys subject to Texas sales tax?
Pecan cracking was not taxable. Smoked turkeys were not taxable unless sold ready for immediate consumption, and resale certificates could apply to resale purchases.
How did Texas tax lump-sum installation of burglar bars on residential and nonresidential buildings?
Burglar bars were real-property improvements. Residential or new-construction lump sums were not taxed to the customer, but existing nonresidential installations were fully taxable.
Which aircraft and automobile upholstery labor was taxable in Texas, and what was required for a refund?
Initial upholstery and most reupholstery were taxable, but aircraft reupholstery and motor-vehicle repair or restoration labor were exempt; collected tax had to be refunded to customers first.
Was rental of heaters and dehumidifiers exempt when the equipment was necessary to apply a coating to structural steel?
No. Temperature and humidity control did not create an exemption, and the letter said neither the federal-contractor facts nor manufacturing use exempted the rental.
Was electricity used to ripen produce exempt from Texas sales tax?
Electricity used to refrigerate produce during a controlled ripening process was exempt, but electricity for later storage, packing, offices, and other nonprocessing uses was not.
Was labor to turn a motor vehicle brake rotor subject to Texas sales tax?
No. The 1990 letter treated labor to repair a motor vehicle or component such as a brake rotor as nontaxable. The repair business, however, had to pay tax to its supplier on the lathe and accessories …
How did Texas tax sold coupons and memberships that provided free video rentals?
A sold coupon was a nontaxable intangible right, but the retailer paid tax on printing and use tax on the tape's fair-market rental value during customer use.
Were orthotics, massage rollers, and massage pillows subject to Texas sales tax?
Orthotics were exempt orthopedic appliances. Massage rollers and pillows were exempt therapeutic appliances only when provided to an individual under a practitioner's prescription.
Could a retailer use accrual accounting generally but report Texas sales tax on credit sales using the cash basis?
Yes. A retailer could report sales tax consistently on the cash basis while using accrual accounting, but the change was prospective and required transaction-level records.
How did Texas tax residential and commercial reroofing under lump-sum and separated contracts?
Residential and new-construction treatment depended on contract form, while labor, materials, and other charges for reroofing an existing nonresidential building were fully taxable.
Did a child-care facility contracted for Levels I-IV services qualify for Texas's residential-facility vehicle-tax exemption?
The Attorney General did not decide. Section 152.093 required a licensed facility serving both children not needing specialized treatment and emotionally disturbed children, but those terms were not l…
Could a surveyor buy stakes and other supplies tax-free when performing taxable or nontaxable surveys for exempt entities?
For a taxable survey, transferred items could be bought for resale, but the surveyor owed tax on retained inputs. For a nontaxable survey, all taxable inputs were taxable.
Could federal credit union employees and volunteer directors claim Texas tax exemption while traveling on official business?
Only when the credit union paid the purchase directly and supplied a purchase voucher; personal payment followed by reimbursement did not qualify.
Which animal feed, medicines, and supplements were exempt from Texas sales tax?
Feed normally consumed by farm or ranch animals, animals held for sale, and wildlife was exempt; pet feed was generally taxable unless a documented special use qualified.
Were insurance claims-adjusting services taxable, and could an insurance company buy qualifying subcontracted adjusting services for resale?
Yes. Adjusting and claims processing were taxable, but a buyer could issue a resale certificate when the purchased services were essential to its own taxable insurance service.
Were sales of pecan trees taxable in Texas?
Generally yes, but a buyer in the business of raising and regularly selling pecans could buy the trees exempt by giving the seller an exemption certificate.
Did a Texas sales-tax refund assignment have to state the assigned refund amount to be legally effective?
No. The Comptroller would accept an assignment without the amount stated, but the country club had to prove the refund amount and keep supporting evidence.
What receipt did a Texas business need to prove sales tax was paid on company credit-card purchases?
The vendor receipt had to separately state tax or say in writing that the price included tax; a verbal agreement or an unitemized card statement did not protect the purchaser.
Could a Texas nonresidential repairman rent job equipment tax-free for resale or deduct its taxed cost from the customer bill?
No. The repairman consumed the rented equipment and paid tax on the rental, while the entire customer billing remained taxable with no credit for that input tax.
Were vending-machine food, soft drinks, and candy sold inside a hospital or similar institution exempt in Texas?
Only sales served to qualifying students, residents, patients, or inmates were exempt; machines in public areas serving visitors or employees made taxable sales.
How could customers recover Texas sales tax paid on books and publications during the historical Texas Monthly refund period?
The seller could refund or credit the customer and claim the amount on its return, or assign its refund right to the customer, subject to documentation and limitations.
Did a wholesaler become a manufacturer by using leased equipment to affix legally required tax stamps to finished cigarette packages?
No. Cigarette manufacturing was complete before the wholesaler acquired the packages, and stamping was not processing or manufacturing.
Which charges by a convention coordinator were taxable, including bundled planning services and private bus tours?
The coordinator's single planning charge was not taxable, but sightseeing bus tours generally were taxable amusements; transportation-focused and qualifying historic tours were not.
Which Texas state and local sales taxes applied to residential electricity delivered in several Austin-area cities?
Residential electricity was exempt from state, county, and MTA tax; city tax applied only where the city had retained or validly reimposed it.
Was labor for a scheduled recurring turnaround on functioning real property at a chemical plant taxable?
No. The Tax Policy Committee treated periodic recurring turnaround work on functioning real-property improvements as nontaxable maintenance labor.
Which destination-management charges for transportation, tours, guides, parties, convention trips, and resale goods were taxable?
Transportation and group parties were nontaxable, sightseeing tours and step-on guides were taxable, and historic-site or transportation-focused tours could be exempt.
Which dog food, medicines, equipment, and supplies could a Texas kennel buy tax-free?
Food for breeding dogs whose offspring were held for sale, and for those offspring, was exempt; food for racing or boarded dogs and the listed kennel equipment was taxable.
Could a school sell taxable yearbooks through an exempt organization's once-a-year, 24-hour tax-free sale?
Yes. Tax was avoided when the yearbooks were delivered to the school on one day, even if students ordered and picked up their books over multiple days.
Could a customer that owned a manufacturing aid claim the manufacturer refund when it was not itself engaged in manufacturing for ultimate sale?
No. Ownership under Rule 3.300(b)(3) was insufficient because § 151.318(g) limited the refund to a person actually engaged in manufacturing for ultimate sale.
When was labor to install an internal or external hard drive or memory card taxable, depending on who sold the component and whether it went inside the computer?
Internal installation was taxable repair or remodeling whether the component replaced a defective part or upgraded the computer. Installing an external component bought from another vendor was nontaxa…
Could the sale of 33 drilling rigs and their associated equipment qualify as an exempt occasional sale in Texas?
Yes. Separate income-and-expense records made each rig an identifiable business segment, so each sale could qualify for the occasional-sale exemption.
Was a post-eye-surgery kit containing medical supplies, sunglasses, a video, and a leather bag taxable in Texas?
The whole kit followed its predominant cost: exempt prescribed wipes, tape, and sunglasses made it exempt, while predominant taxable video and bag costs made it taxable.
Were charges to disassemble and reassemble modular office furniture taxable when the work was necessary to move an office?
No, when the purpose was moving and records made that clear. Charges to reconfigure, repair, or add parts to the furniture remained taxable.
Did FDIC or RTC involvement make separately organized operating properties exempt from Texas sales and hotel occupancy taxes?
No. The Comptroller's General Counsel treated the properties as separate private entities that remained responsible for taxes on their continuing operations.
Could a natural-gas marketer making only exempt sales issue a resale certificate without holding a Texas sales-tax permit number?
Yes. A supplier could accept the no-number certificate if the buyer claimed all sales were for resale or exempt customers and the supplier lacked contrary knowledge.
Were debt-collection services taxable when the creditor was in Texas but the debtor resided outside Texas?
No. Texas tax applied only when the debtor's address at placement was in Texas and the creditor was located or doing business in Texas; the debtor here was out of state.
Which printed materials qualified for the historical Texas publication-tax refund, and what documentation was required?
Only books, magazines, and periodicals bought before August 28, 1989 qualified, subject to four years; brochures, advertising items, and printing services did not.
Could a debt collector buy notices for resale, and when was separately purchased software support taxable?
Notices were taxable because the client lacked custody; support from the software seller was taxable, while an unrelated provider's support was not.
How could local sales tax be allocated when a retail building straddled the San Antonio and Leon Valley city boundary?
Because both sides had the same rate, the tenant could apportion by each city's share of floor area; if rates differed, the cash-register location controlled.
Was electricity used by a dialysis treatment center exempt from Texas sales tax?
No. The center's electricity was taxable commercial use even though the doctors' services and dialysis treatments were nontaxable and some patient supplies were exempt.
How did Texas sales tax apply to clowning, party decorations, giveaways, rentals, cleanup, and out-of-state decorating work?
Clowning alone was nontaxable, but decorating, decoration sales or rentals, and related cleanup were taxable; bundled charges and where goods were used affected the result.
How did Texas tax typesetting, color separations, film, and printed advertising literature distributed in and outside Texas?
Prepress work, film, and negatives were taxable; printed literature depended on resale, delivery, giveaway use, and proof of out-of-state shipment.
Did an auto-crushing business need a Texas sales-tax permit when buying title-surrendered salvage units and selling crushed vehicles to a steel mill?
Yes. Once the units lost their identity as motor vehicles, purchases and sales involved tangible personal property, with resale certificates on both transactions.
Were lighting and HVAC/refrigeration maintenance agreements taxable when they covered both real property and tangible personal property?
The lighting agreement and the single-charge mixed HVAC agreement were fully taxable; separate charges and the share attributable to repairs could change real-property treatment.
Could contractors building the federal Homeport naval facility in Corpus Christi rent equipment and obtain supplies tax-free?
Yes. Although federal-contract equipment rentals were generally taxable, Homeport contractors could give suppliers exemption certificates for qualifying contract inputs.
Were a retailer's forfeited special-order deposits and layaway cancellation fees subject to Texas sales tax?
No. Because the customer received no merchandise after canceling, the Comptroller said no taxable sale occurred.
Did an out-of-state seller of television maintenance contracts have Texas nexus and owe tax on contracts, parts, freight, and installation?
Yes. Hiring a Texas repair contractor made the seller subject to Texas permitting and tax duties; maintenance, parts with freight, and installation were taxable.
Which charges for bank software setup, programming, conversion, installation, training, optional programs, and continuing support were taxable?
Data conversion, canned software, seller modifications, installation, and support were taxable; qualifying contract programming and separately stated training were not.
Browse Texas rulings by topic
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.