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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When was labor to install new sheet-metal manufacturing equipment taxable in Texas?
Independent labor that only placed equipment in position was not taxable; assembly or installation by the equipment seller was taxable.
Did Texas's industrial-solid-waste exemption cover office garbage or commingled waste?
No. Office garbage was taxable, and mixed office and industrial waste was presumed taxable unless the required certification was provided.
How could State Fair concessionaires document tax-free purchases for resale when the fair collected their sales tax?
The fair could issue resale certificates on behalf of booth operators for whom it collected and remitted tax, identifying those operators to suppliers.
When did Texas treat temporary workers as a customer's employees rather than as a contractor performing taxable services?
Only when the work was normally done by the customer's employees, the customer supplied the tools, and the customer supervised the workers.
How did Texas tax telecommunications, local-network access, answering services, and free telephone directories?
Texas taxed qualifying in-state telecommunications and final-consumer access charges, while directory and answering-service treatment depended on the facts.
Was a builder's sale of a floating dry dock exempt after the builder had used it commercially?
Yes. Texas treated the dry dock as an exempt commercial vessel, and the builder's prior commercial use did not void the exemption.
How did Texas tax computer hardware, software, programming, support, freight, trade-ins, refunds, and bad debts in 1989?
Most hardware, software, maintenance, seller installation, support, and freight charges were taxable; independent new programming could be nontaxable.
Were flowers bought by a church or a church-affiliated Sunday school class exempt from Texas sales tax?
A church's purchase was exempt, but a Sunday school class's purchase was taxable unless the flowers were strictly for church use.
Which charges connected with plugging and abandoning an oil or gas well were taxable?
Land reclamation was not taxable, but cleaning pipe threads and a workover tank was taxable and had to be separately stated.
Could a bread plant combine two gas meters for predominant-use testing, and was conveyor electricity exempt?
Texas allowed a facts-specific combined gas-meter exception, but electricity for conveyors that only transported bread was not exempt.
When did Texas use tax accrue on imported machinery held in a foreign-trade zone before delivery to a plant?
Tax accrued only when the machinery was used inside the zone or removed from it; local tax at the outside plant site then applied.
Was a separate fee for resold discounted long-distance service taxable to Texas and out-of-state customers?
Texas customers owed tax when calls originated and were billed to a Texas address; out-of-state customers were exempt.
Were mud-logging services taxable in Texas?
No. Texas treated examination of drill cuttings and circulated mud for oil-and-gas indications as a nontaxable service.
Which electricity used to blend and package a manufacturer's rice and spices was exempt?
Electricity directly used to dispense, heat-seal, box, and shrink-wrap the products was exempt; lighting, HVAC, and conveyors were taxable.
When were hotel charges for sending or receiving fax transmissions taxable in Texas?
A send or receive fee was taxable only when the underlying fax met Texas telecom-sourcing rules; local tax followed the point of origin.
How did the Comal County recreation-district tax interact with Texas sales tax in 1989?
The district's 2.5% tax was collected alongside sales tax on taxable rentals or sales but was not itself included in the sales-tax base.
How could an amusement park handle tax-included discounts, locker rentals, and shared coin-machine revenue?
Tax-included discount signs were acceptable, standalone locker rentals were nontaxable, and the park's coin-machine revenue share was not a lease payment.
When did playground equipment become real property, and how were homeowner-association recreation areas treated?
Equipment embedded in concrete became a real-property improvement; anchored or freestanding units remained taxable personal property.
Were a hotel caterer's bartender, other labor, and setup fees taxable?
All listed charges were taxable except a separately stated bartender fee for serving alcohol under a TABC mixed-beverage permit.
Did a doctor's prescription make a standard reclining chair exempt from Texas sales tax?
No. The recliner was not designed as a therapeutic appliance or device, so the prescription did not create an exemption.
Were tenant credit and rental-history reports taxable when used for Fannie Mae properties?
Yes, unless bought directly for the federal entity or by a manager acting under an agency agreement; government-backed financing alone was insufficient.
Could Texas sellers accept resale and exemption certificates sent by fax?
Yes. The internal memo said faxed certificates were acceptable if they were currently dated, valid, and properly completed.
Were fax charges by lawyers, architects, and other professionals taxable?
Not when part of an exempt professional-service transaction; standalone commercial fax service remained taxable telecommunications service.
Did a fireworks retailer need a separate Texas sales-tax permit for every stand?
No. One permit covered all stands, but a copy had to be displayed at each location; wholesalers also needed a permit.
Was collecting accounts receivable bought without recourse a taxable debt-collection service?
No. A true nonrecourse purchase made the receivables the buyer's own accounts, but the seller was treated as paid for sales-tax purposes.
Could a television repair business buy cable service tax-free for resale when it used the service during repairs?
No. Cable service was consumed by the repairer, while parts incorporated into customers' televisions or VCRs could be bought for resale.
Did a free advertising publication owe tax on its in-house work and purchased production services?
Its own employees' work created no sales-tax liability, but purchased printing and other production services were taxable.
Which local sales-tax rate applied when a Fort Worth florist delivered or wired flowers elsewhere?
The florist used its 7.5% Fort Worth rate for both direct Arlington deliveries and wired orders, including orders sent outside Texas.
When was buying and collecting delinquent loans nontaxable rather than a taxable debt-collection service?
The buyer had to give consideration for a true sale and the lender could not be required to repurchase uncollectible accounts.
Were nipple-up and nipple-down services on blowout preventers taxable?
It depended on the overall job. Completion and formation-production work was nontaxable; work tied to a taxable oilfield service was taxable.
Was a sale of oil leases and the basic production equipment then in use subject to Texas sales tax?
No. Texas treated the leases and in-use basic production equipment as an interest in real property, so no part of the sale was taxable.
How did Texas tax public fax transmissions, receive fees, dedicated lines, and mixed-use memberships in 1989?
Fax charges were taxable telecom services under the stated sourcing rules; dedicated lines and paper could be bought for resale, with business use taxed.
Were the described check-service activities taxable in Texas?
No. Based on the submitted description and purchase agreement, Texas concluded that the client's check services were not taxable.
Was a scoreboard transferred to a school for ten years of advertising rights a taxable donation or a sale?
It was a sale because advertising rights were consideration; the sale was exempt only if the recipient itself qualified as exempt.
How did Texas distinguish new-construction and remodeling tax for signs attached to buildings or pylons?
Signs added before occupancy or on new pylons were new construction; replacements and additions to occupied buildings were taxable remodeling.
Was sales tax due on a municipal franchise fee itemized on cable-television and telephone bills?
Yes. The fee was the provider's business expense and remained part of the taxable sales price when passed through to customers.
Which industrial design, drafting, and computer-file conversion services were taxable?
Professional engineering design was nontaxable, but manual or computerized drafting and computer-file conversion were taxable.
Did rebuilding previously occupied mall space from bare floors and walls count as nontaxable new construction?
No. Because the work replaced or rebuilt parts of previously occupied space, Texas treated it as taxable remodeling.
Was a separately stated computer-usage charge taxable when the computer supported a professional consulting study?
No, if identified as reimbursement for computer time used in the professional service; a standalone reformatted-data report was taxable.
Did Texas's agricultural exemption cover a satellite dish, CRT equipment, and agricultural market-data service?
No. The equipment was taxable tangible property and the futures and live-market data was a taxable information service.
Was a separately stated insurance premium covering replacement of lost, stolen, or destroyed leased cellular phones taxable?
No. The premium was forwarded to an insurer, covered replacement rather than repair, and was optional for lessees with other coverage.
Did affiliated corporations have to file a consolidated federal return to keep Texas's intercorporate-service exemption?
No. The group had to qualify for consolidated filing under federal law, but choosing not to file that way did not forfeit the exemption.
Which vehicle sales, adaptive equipment, repairs, and remodeling for an orthopedically handicapped person were exempt?
Qualifying modified motor vehicles and adaptive equipment were exempt, as was necessary accommodation labor; ordinary parts and aesthetic work were taxable.
Did Texas's agricultural exemption cover rodent-control equipment or poison?
Equipment and traps were taxable; poison could qualify only when a farmer used it to protect an agricultural product held for sale.
How did Texas tax fire-protection systems installed in new, residential, and existing nonresidential buildings?
New-construction labor was nontaxable, residential repair labor was nontaxable, and the total charge for existing nonresidential remodeling was taxable.
Were charges for workers' compensation claim files and required health-care guidelines taxable?
No. The 1989 letter exempted both categories as governmental records or required Open Records Act publications.
Were charges to tear down and bury PCB-contaminated property taxable in Texas?
No. Based on the Texas Water Commission's 1989 characterization of PCBs as hazardous waste, the disposal charges were nontaxable.
How did Texas tax labor and parts for repairs to farm, livestock, horse, and utility trailers?
Repair labor was not taxable. Separately billed parts were taxable unless the trailer was unlicensed for highway use and operated exclusively on the farm or ranch by the original producer, documented …
How did Texas divide a guest ranch's packaged and separately stated charges between hotel and sales tax?
Lump-sum room packages bore hotel tax, while separately stated rides, meals, amusement, concerts, and equipment generally bore sales tax.
Which tubes, tips, equipment, racks, bottles, labels, and sample inputs used to make culture media were exempt?
Single-use tubes, tips, and aspirators plus sale packaging qualified; reusable racks, most equipment, and sample containers did not.
Was a consumer's deductible payment for an automobile warranty repair taxable?
No. The internal memo treated the warranty deductible like an insurance-repair deductible and concluded that tax was not due.
Were charges to copy and deliver hospital medical records taxable in Texas?
No. Both copying and separately billed delivery were nontaxable, but the provider owed tax on taxable items used to perform the service.
Which cleaning chemicals and supplies used in cattle slaughtering and meat processing were exempt?
Direct-contact denaturant, soap, qualifying hide treatment, and by-product-equipment degreaser were exempt; general cleaning and worker-clothing supplies were taxable.
When were charges for temporary technical personnel nontaxable staffing rather than taxable identifiable services?
The agreement had to supply temporary employees, bill by employee-hour rather than job completion, and let the customer replace unsatisfactory workers.
Did a corporate group lose Texas's intercorporate-service exemption by choosing not to file a consolidated federal return?
No. Eligibility to report on a consolidated federal return was enough; the group's decision not to use that method did not destroy the exemption.
Which state, city, county, and transit taxes applied to a Texas City investigation firm's assignments in 1989?
The firm collected state and Texas City tax plus applicable customer-area use tax, subject to the historical 8% cap and drop-off order.
Did an unfunded $6 million paid-in-capital book entry have to be included in the subsidiary's 1989 franchise-tax surplus?
The preserved STAR body states the facts and question but gives no answer, so the surplus treatment cannot be determined from this record.
When did Texas's temporary-storage exclusion protect equipment held or assembled in Texas for out-of-state use?
Out-of-state purchases could qualify if temporarily stored and used solely outside Texas; in-state purchases and Texas manufacturing use were taxable.
Were hourly aircraft-use charges by nonprofit flying clubs taxable, and were owner reimbursements taxed?
Club-member use was a taxable rental; the club's hourly reimbursement to aircraft owners was a tax-free rental for rerental.
Were subscription background-music services transmitted by radio frequency taxable telecommunications services?
No. The Comptroller found no legislative support for treating subscription music like telephone, telegraph, paging, or similar communications.
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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.