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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Could a purchaser use MTC Exhibit 1100-D in Texas for resale and manufacturing purchases, or did it need a Texas exemption certificate?
Texas accepted Exhibit 1100-D as a resale certificate for items bought for resale, lease, or rental, including manufacturing inputs that became component parts. It could not cover exemption-only purch…
Which services of a city contractor-assistance program were taxable: site visits, consultations, research lists, document copies, fax, delivery, calls, and workshops?
Site visits and consultations were nontaxable; market-research and agency-match lists, vendor-parts histories, microfiche copies, and fax transmissions were taxable. Delivery and long-distance charges…
When were a petroleum consultant's computer-assisted geophysical work, data entry, typing, and reel-to-reel copying taxable Texas services?
Scientific analysis and interpretation tailored to a client were nontaxable even when a computer was used. Merely entering or manipulating already-analyzed customer data and producing a report was tax…
Was the Xerox/Kruzweil Personal Reader exempt when sold, leased, or rented for use by legally blind or dyslexic individuals?
Yes. For a legally blind user, the text-to-speech reader qualified under Rule 3.284(c)(5) with an exemption certificate. For a person with dyslexia, it qualified as a therapeutic appliance when suppli…
Was the Xerox/Kurzweil text-to-speech Personal Reader exempt for a legally blind user, and could previously paid sales tax be refunded?
Yes. The portable optical scanner qualified under Rule 3.284(c)(5) when sold, leased, or rented for use by the legally blind. A properly completed exemption certificate was required, and presenting it…
Did a seller making only exempt natural-gas sales need a Texas sales-tax permit, and what certificate proof could suppliers require?
No permit was required solely to report exempt natural-gas sales, but the seller had to give a resale certificate when a supplier requested one. A certificate without a permit number could be accepted…
Could a motor-vehicle dealer buy logo-bearing keyrings, trunk nameplates, and license-plate frames tax-free for resale?
No. Texas treated dealer-name or logo-bearing keyrings, trunk nameplates, and license-plate frames as advertising and promotional items rather than resale purchases. The dealer was told to continue co…
Were sales of untreated water to farmers and manufacturers taxable, and did a water-only seller need exemption certificates or a sales-tax permit?
No. Water was exempt by statute regardless of whether the customer was a farmer or manufacturer, so the seller needed no customer exemption certificate and, if it sold only water, no sales-tax permit.…
Did the manufacturing exemption apply to janitorial work at a meat-packing plant when collected scraps and fat later entered the rendering process?
No. The service cleaned the plant's walls and floors, not the product being manufactured. Picking up scraps remained part of taxable janitorial work even though the plant later rendered and sold them …
Were labor charges to repair or recondition reusable steel drums exempt when the work was required by federal transportation rules?
Yes. Tax Code § 151.338 applied to steel-drum repair or reconditioning performed as set out in the cited federal transportation regulation, so the labor charge for repairing the drums was exempt.
Were green fees, yearly golf-course memberships, golf-cart rentals, and pull-cart rentals taxable when provided by a Texas governmental entity?
Governmental green fees and yearly memberships representing admission to the golf course were not taxable amusement services. Golf-cart and pull-cart fees were taxable rentals of tangible personal pro…
How did Texas tax septic-tank cleaning, grease-trap cleaning, waste hauling, and municipal dumping or landfill fees?
Septic-tank cleaning was nontaxable for homes and businesses, including hauling and the city sewer dumping fee. Sewer-connected commercial grease-trap cleaning was taxable unless it qualified as sched…
Did an insurance marketer need a Texas sales-tax permit merely to use computers to obtain prospective-customer leads?
No. Insurance coverage was not subject to sales tax, and using computers to procure insurance leads rather than sell taxable items did not require a permit. The marketer still owed tax on buying, leas…
Which separately contracted pipeline inspection, cleaning, testing, repair, valve, boosting, evacuation, and temporary-equipment services were taxable?
Pipeline cleaning, linalog and X-ray inspection alone, hydrotesting, capacity boosting, and evacuation were nontaxable when separately contracted directly with the provider. Repairs, digging, pipeline…
Was trash removal taxable when performed as part of otherwise nontaxable restoration of flood-damaged real property?
Yes. The Comptroller said waste-removal service remained taxable even when connected with a nontaxable restoration service following a natural disaster.
Did keeping production rooms at Class 100 or better air quality make the janitorial service exempt as necessary to manufacturing?
No. Cleaning rooms where production occurred was taxable because the janitorial service was performed on the physical facility, not directly on the manufactured product. Rule 3.300 supplied no exempti…
How did Texas tax installation and repair of refrigeration units on trucks and trailers?
Sale and installation of a vehicle refrigeration unit were taxable. Repair labor on a truck- or trailer-mounted unit was not; in lump-sum repairs the shop paid tax on parts, while with separately bill…
Did the 1989 nonprofit-publication exemption cover books, magazines, newsletters, and other writings produced and sold by a chamber of commerce?
No. The new exemption covered writings published and distributed by specified nonprofit religious, philanthropic, charitable, historical, or scientific organizations, but not civic organizations. The …
Could multiple gas suppliers rely on copies of one engineer-sealed predominant-use utility study, or did each exemption certificate need an original seal?
Copies were acceptable only when attached to a new original exemption certificate for the proper supplier and covering the same location and meter as the original study. A different meter needed its o…
Was partial interior demolition of an existing nonresidential building taxable remodeling, and was later refitting the shell taxable?
Yes. Converting a finished existing building into an unfinished shell through interior demolition was taxable nonresidential remodeling, and refitting the shell also was taxable. Only razing a buildin…
Did an out-of-state auction avoid Texas sales tax when the equipment stayed in Texas and buyers took possession there?
No. The seller had to collect Texas sales tax because the equipment was in Texas and buyers took possession in Dallas, subject to a valid resale certificate.
When were services of temporary contract personnel treated as work performed by the customer's own employees rather than a purchased taxable service?
The treatment applied when the work was normally performed by the customer's employees, the customer supplied all equipment and supplies, and the workers were under its direct or general supervision. …
Were a university press's biography sales exempt, and did one weekend of sales in another city require a temporary outlet or return adjustment?
No publication exemption applied because Section 151.312 expressly excluded educational organizations. The letter said Belton and Temple then had the same 7.5% combined rate, and one weekend of Temple…
Were fees to design and administer a Section 125 cafeteria benefit plan taxable as insurance or data-processing services?
No. Designing, presenting, enrolling employees in, and administering the plan were nontaxable insurance services. Preparing account-status documents with a computer was not data processing because the…
Was a subscription service taxable when it listened to radio contests and phoned a subscriber if the subscriber's number was called?
No. The Comptroller said the service did not furnish general or specialized news or other current information under Rule 3.342; it merely told the subscriber whether that subscriber had a winning numb…
Were charges to remove combustible material from electrical cable trays taxable, and could scheduled-periodic maintenance treatment apply?
Yes. Because the cable trays were improvements to realty, removing material from them was taxable janitorial service and waste collection under Rule 3.356(a)(1). Rule 3.357's scheduled-periodic-servic…
How did Texas tax repair or maintenance of automatic fire systems and periodic grease removal from kitchen exhaust systems?
Repair or maintenance of a fire system treated as tangible personal property was taxable, as was repair, restoration, or remodeling of a realty improvement in a nonresidential building. Scheduled prev…
Were charges for searching national computer records and providing a person's current address taxable Texas information services?
Yes. The company furnished current information under Rule 3.342(a)(2). The service did not qualify for Rule 3.342(d)(1)'s exemption because the address information was not proprietary and could be sol…
Was scheduled bowling-lane resurfacing a taxable repair, and did per-lane billing change the result?
No. Periodic, scheduled lane resurfacing was nontaxable maintenance, and charging by the lane did not change that status. Work performed only as needed or after something broke was taxable repair, inc…
When were housekeeping services in a private home exempt as temporary employee replacement rather than taxable maid-company service?
A housekeeper from a temporary employment service was exempt when supplementing or replacing the household's own employee who was sick or on vacation. Maid-company service was taxable, as was temporar…
What information did the Comptroller require before processing this direct payment permit application?
The applicant had to clarify its construction contract and building ownership, complete officer and affiliate details, show it met the $800,000 annual taxable-purchase threshold, promise certificates …
Were two-way-radio equipment, installation, and delivery charges taxable when the system served offshore rigs in federal waters?
Onshore equipment and installation were taxable because the radios did not themselves perform mineral exploration or production. Equipment rented and installed on a rig in federal waters was exempt wh…
When were washed, drained, screened, graded, or crushed sand and related delivery charges taxable, and could customers receive refunds?
Washing, sorting, grading, screening, and letting water drain off left sand unprocessed, so the material and delivery were nontaxable. Crushing or mixing was processing, making both material and bille…
Was a city's separately stated $1.10 administration charge taxable as part of a $7.20 garbage-collection bill?
Yes. The total amount charged for garbage collection was taxable, including the $1.10 city administration cost. Separately listing the fee did not remove it from the taxable service charge.
Were postage and carrier charges taxable when a check printer mailed taxable checks directly to bank depositors?
Yes. The charges were connected to taxable checks and the depositor was the relevant customer rather than a third-party recipient, whether the bank acted as agent or reseller. A reseller bank needed a…
Could a manufacturer obtain a sales-tax refund on an inactive electricity account after changing utility suppliers?
Yes, if the electricity qualified for exemption and the manufacturing operations had not changed. The manufacturer had to give the previous utility supplier properly completed exemption certificates a…
Were machinery disassembly, moving, reassembly, loading, unloading, in-plant moves, and export packing taxable?
Moving-related disassembly and reassembly were nontaxable when done only to relocate equipment and not to repair or reconfigure it. Loading, unloading, and in-facility moves were also nontaxable absen…
Could a customer's letter substitute for a properly completed Texas direct-payment exemption certificate?
No. The letter was unacceptable. The seller had to charge the customer tax on taxable items unless the customer issued a properly completed direct-payment exemption certificate in the form accepted un…
Were customer-specific flight plans taxable when prepared for one flight and aircraft and not resold to others?
No. A flight plan that was unique information for a specific client, intended for one-time use, and not resold to others was not taxable.
Were charges to cut, shape, and install insulation in existing nonresidential property taxable?
Yes. A single contractor's entire charge was taxable; with separate contractors, cutting and shaping were taxable fabrication and installation was taxable remodeling.
Were lump-sum charges for billboard advertising space and temporary shape extensions taxable, and what if an outside company performed the alteration?
The billboard company's own advertising-space and extension charges were nontaxable; the extension was treated as additional advertising space rather than remodeling. The company paid tax on its input…
Were charges to test whether storage tanks held properly under EPA, Texas Water Commission, and Railroad Commission standards taxable?
No. Storage-tank testing against those standards was a nontaxable service. The testing company remained responsible for tax on the supplies, materials, and other taxable items used to perform it.
Did depreciating offshore equipment make later Texas storage a taxable use, and how did the appended letter classify surveying in and outside Texas waters?
Yes. Depreciated equipment returned to Texas for storage was used in Texas, creating state and applicable local use tax based on the storage location. The appended letter also taxed boundary, right-of…
How was Texas sales tax calculated for buy-one-get-one-free promotions and seller-accepted coupons?
Tax applied only to the paid item in a buy-one-get-one-free transaction; the free item was not taxed to the customer. When a coupon reduced the selling price, tax applied to the discounted amount—for …
What did the Comptroller's August 1989 news release say about the new sales-tax exemption for nonprofit publications?
Beginning August 28, charitable, philanthropic, and benevolent groups could sell writings tax-free when they both published and distributed them. The release identified historical societies, Junior Le…
How did the Comptroller's internal memo distinguish nontaxable bowling-lane maintenance from taxable repair?
Scheduled recurring lane resurfacing performed before lanes became unusable—typically every 18 to 24 months—was nontaxable maintenance. Work done to fix something broken was taxable repair.
Which animal feeds and horse health products were exempt, and when did the seller need an agricultural exemption certificate?
Catfish-pond and wild-bird feed were exempt without a certificate. Feed for rabbits raised for food or regular-course sale was exempt with a certificate because pet-rabbit feed was taxable. Horse medi…
Were lump-sum per-use charges for diagnostic-imaging equipment supplied with a technician taxable in Texas?
No. The Comptroller treated the provider as selling a diagnostic scanning service, not renting equipment, because its technician remained with the MRI, CT, ultrasound, or nuclear-medicine equipment. T…
Were lump-sum party, dinner, and overnight yacht-cruise packages taxable when the boat traveled on a border lake?
Yes. The Comptroller treated all three packages as taxable amusement services because the cruises did not travel offshore beyond Texas territorial waters. State tax applied to the entire package, and …
Could a company use a rubber-stamped signature on its Texas sales and use tax returns?
The Comptroller would process a rubber-stamped return, but the stamp still represented the taxpayer's or authorized agent's declaration that the return was true and correct. Processing did not prevent…
Did this computer-equipment contract qualify as a financing lease, and how did Texas tax its payments and purchase option?
No. The Comptroller classified it as an operating lease. The full $2,542.53 monthly payment, including interest, was taxable, and tax also applied if the lessee exercised the option to buy the equipme…
Was a support contract taxable when it covered a hotline and loaner equipment but billed repairs separately?
Yes. Providing replacement equipment while the customer's property was repaired made the support contract taxable, and the separately billed repair charges were also fully taxable.
Were a copy-machine lease, maintenance fee, per-copy click charge, and the business's charge to customers taxable in Texas?
Yes. The lessor had to tax the lease, maintenance, and click charges even when separately stated, and the business had to tax its entire charge for copies, including the passed-through click amount.
Could a Texas seller accept a later-dated resale certificate for an earlier sale and obtain a refund of tax returned to the customer?
Potentially. The customer had to hold a valid sales tax permit when the sale occurred, provide a currently complete resale certificate, confirm it had not and would not claim the same tax as a return …
Would a multistate retailer owe Texas use tax on out-of-state printed materials mailed directly to Texas recipients?
Under the proposed Rule 3.346 revision described in the letter, yes. A corporation doing business through five Texas stores would report use tax on the portion of its out-of-state printed-material cos…
Was weather information sold by computer link or in hard copy taxable as a Texas information service?
No. Although it was an information service, the weather data was derived from direct scientific observation of physical phenomena and therefore fell within Rule 3.342(d)(2)'s nontaxable-information ca…
Were separately stated charges for inspecting pipe or casing taxable in Texas?
Not when the charge covered inspection only. The Comptroller said the charge became taxable if the work involved repair, remodeling, restoration, or maintenance.
When could a Texas seller treat merchandise shipped out of state as exempt from Texas sales tax?
The sale was exempt when the seller delivered the goods out of Texas through a carrier or its own trucks and kept records—such as bills of lading or trip logs—showing the out-of-state shipment.
How did Texas distinguish nontaxable transmission-repair labor from a taxable sale of a rebuilt transmission?
Labor was nontaxable when the shop repaired a transmission or removed and replaced one as part of repairing the customer's vehicle. But when the shop simply sold a rebuilt transmission without repairi…
Was restoration labor exempt when a building's listing in the National Register of Historic Places was still pending?
No. Because the building was not listed when the work was performed, the contractor had to tax the total charge. If the building was listed later, the customer could give the contractor an exemption c…
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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.