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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Are public-records research, lien searches, and ad valorem tax checks taxable information services in Texas, and is document filing taxable?
Public-records research — title reports, UCC and financing-statement searches, judgment and tax-lien searches, court-suit searches, and ordering certified copies — and checking on payment of ad valore…
Could a fiberglass manufacturer buy glass electrodes exempt from Texas sales and use tax?
Yes. Texas concluded that glass electrodes used to manufacture fiberglass qualified for exemption because the electrodes entered into or became an ingredient or component part of the manufactured fibe…
Were charges to maintain cemetery grounds subject to Texas sales tax as lawn-care services?
No. The Texas Comptroller said cemetery grounds would not be considered lawns, so charges to maintain those grounds were not subject to sales tax. The letter described this as a prior ruling intended …
Were unprocessed sand, dirt, gravel, and their transportation charges subject to Texas sales tax under the Comptroller's 1988 policy?
No. A general Texas Comptroller notice said sales tax was no longer due on unprocessed sand, dirt, gravel, or similar materials, and transportation charges for those materials were also nontaxable. Th…
Does Texas tax an event ticket based on where the ticket is sold or where the amusement event occurs?
Texas treated the event's location as decisive. A Texas sale for a Texas event was subject to sales tax on the ticket's face value and convenience charge; a Texas sale for an out-of-state event was no…
Did a change in Texas's dirt-hauler rule alter a drilling-mud seller's deficiency, and how could partial payments preserve a refund claim?
No. The tax policy committee unanimously concluded that the dirt-hauler rule change did not affect the drilling-mud seller, so the deficiency remained in place. Texas would not hold a refund hearing o…
How should a cash-basis university allocate a partial student payment between taxable meals and nontaxable dorm rent?
Texas required the university to allocate each partial payment proportionally between taxable meals and nontaxable dorm rent, using taxable charges divided by total charges excluding tax. In the lette…
Were newspaper advertising inserts shipped into Texas subject to sales or use tax?
It depended on the shipment. Texas said inserts shipped into the state by the advertiser were taxable regardless of transportation method, without requiring constructive possession. But inserts sent d…
Must a Texas bank or lending institution collect sales tax when it sells repossessed property?
Yes, for repossessed taxable property. Texas told banks and other lending institutions that they could not treat these dispositions as occasional tax-free sales, even when sales tax had been paid on t…
Does a part-time residential house cleaner owe Texas sales tax, or is she treated as the household's employee?
Residential house-cleaning done by an individual who is not an employee of a janitorial service is not taxable in Texas. In this case, a woman who cleans a few homes part-time is treated, for sales-ta…
Are well services taxable in Texas when performed to complete a well into a new, deeper formation rather than to restore existing production?
Well services are not taxable in Texas when they are performed solely to facilitate completing the well-bore into a new, deeper formation — as opposed to restoring production in an existing zone (here…
Could labor to restore, repair, or remodel a building listed in the National Register of Historic Places be purchased tax-free in Texas?
Yes. Texas said a person or organization restoring, repairing, or remodeling a building listed in the National Register of Historic Places could give the contractor an exemption certificate for the la…
Which charges for designing, building, installing, repairing, storing, removing, and reinstalling luminaires were taxable in Texas?
Texas taxed designing and building a luminaire, its first installation, repairs, and travel billed as part of a taxable repair. It treated storage, later installation, removal, operator charges, and r…
Which mobile-phone installation, removal, reprogramming, repair, cleaning, and inspection charges were taxable in Texas?
Texas taxed installation tied to a phone sale or lease, repair-related reinstallation, replacement-unit installation, reprogramming, enhanced services, refurbishing, repairs, parts, and cleaning. Stan…
Is a microfilm billing service taxable in Texas when the film is processed out of state and never returns?
A microfilm billing service's charge to its customer is not taxable in Texas. The business films clients' ledger cards with a portable camera, sends the exposed film to an out-of-state processor, and …
How does Texas tax pipeline painting, repairs, replacement, relocation, land clearing, and material handling charges?
For pipeline contractors, Texas treats the work by category. Pipeline painting and pipeline repairs are presumed taxable — painting can be exempt if it qualifies as maintenance under Rule 3.357(c)(3),…
Did Texas audit policy treat chairs, tables, refrigerators, and similar property in stadium sky boxes as taxable?
No. An internal Texas Comptroller memorandum said chairs, tables, refrigerators, and similar tangible personal property in stadium sky boxes had not been taxed in the audit and were to be treated as e…
Were canteen sales and patient meals at a Texas clinic exempt because an exempt state entity operated the clinic?
No. Texas required tax on taxable canteen items and found no patient-meal exemption for a clinic because clinics were not licensed by the state as institutions for the care of human beings. The letter…
What did the Comptroller's letter on the proposed audiovisual-works rule say about taxing video photographers?
This is not a taxpayer-specific ruling but a June 1988 Comptroller letter responding to industry comments on the proposed sales-tax rule for audiovisual works. It confirms the Comptroller adopted the …
Does a company selling discount membership cards owe Texas sales tax or need a permit, and is its list of participating retailers a taxable information service?
Selling memberships in a discount-card service is not taxable in Texas. If the list of participating retailers is provided to cardholders as part of their membership, the company is not providing a ta…
Were forensic-engineering investigations connected with insurance claims taxable as insurance services in Texas?
Yes. Texas treated forensic-engineering and applied-science services as taxable insurance services when performed for a customer in connection with a claim against an insurance policy, even if the cus…
Which tree-service, land-clearing, stump-grinding, demolition, and debris-hauling charges did Texas treat as taxable?
Texas treated most tree cutting, trimming, stump grinding, and stand-alone debris hauling as taxable, while land clearing for construction-site preparation, complete demolition-and-removal jobs, pastu…
Is a Texas money-order service taxable, and who pays tax on the machines, forms, telephone equipment, and service used to provide it?
The sale of a money order was nontaxable to the customer. But the provider of the nontaxable service had to pay sales or use tax on taxable items and services used to provide it, including dispensing …
Is a service that obtains Texas driving records for insurers taxable, and may the DPS record fee be excluded?
Yes. Texas treated the service of obtaining Department of Public Safety driving records for insurance companies and prospective customers as taxable, including electronic delivery. The DPS charge itse…
How did Texas tax hydrostatic testing and separated repair charges for compressed-gas tube trailers?
Texas treated the tube trailers as motor vehicles. Under the separated repair invoices described, labor to disassemble, test, and repair the trailers was not taxable, while sales tax had to be collect…
Is a charge for copying data from one storage device to another taxable in Texas when the customer supplies the disks or tapes?
Yes. Texas treated the charge for transferring data from one storage device to another as a taxable data-processing service, even though the customer supplied the disks or tapes and the provider did n…
Is return freight charged by an equipment lessor at the end of a rental agreement taxable in Texas?
Yes. Texas treated all transportation charges billed by an equipment lessor as taxable, including separately stated return freight. Tax applied whether the lessor hired a commercial hauler and rebille…
When is auto-upholstery work a nontaxable lump-sum motor-vehicle repair, and when is installing seat covers a taxable sale?
Texas treated work on headliners, vinyl roofs, convertible tops, carpet, and custom permanently installed seat covers as motor-vehicle repair, so the shop did not charge tax on its lump-sum bill after…
Could a taxable landscaping provider buy the city's later removal of collected grass, trees, and organic debris tax-free for resale?
Yes. Because waste removal was included in the landscaper's taxable customer charge, the landscaper could give the city a resale certificate for the city's further debris removal.
Is jewelry bought with hostess credits earned through home-party sales subject to Texas sales tax?
Yes. Texas treated the hostess's jewelry purchase with earned credits as a taxable barter transaction. The credits were based on events, buying guests, and purchase volume, making the hostess similar …
What portion of a Texas payroll-service charge was taxable when the provider also handled employee pay and employer obligations?
The payroll provider's total service fee was taxable. But amounts the employer supplied solely to pay employee salaries, the employer's Social Security share, workers' compensation, and similar obliga…
Did a pre-July 22, 1987 lease qualify for Texas's prior-contract exemption when the customer bore later sales-tax increases?
No. Texas denied the prior-contract exemption because the master lease made the customer responsible for sales-tax changes or increases. That clause protected the lessor from a rate change, meaning it…
How did Texas tax freight-bill auditing combined with computerized or manual accounts-payable processing?
Freight auditing was nontaxable whether performed manually or by computer. Accounts-payable processing was taxable data processing when computerized but nontaxable when manual. Because taxable account…
How did Texas tax installation, standby-consultant, and mileage charges for oil-and-gas well equipment?
Installation connected with selling, leasing, or renting wellhead and well components was taxable, as was installation forming part of taxable nonresidential repair or remodeling. The described standb…
How did Texas divide a strip-center project between new construction and taxable remodeling under a lump-sum contract?
Rebuilding from the slab up and adding square footage were new construction; removing walls and repainting were remodeling. If remodeling exceeded 5% of one lump sum, the entire charge was taxable.
Were road blading and watering taxable repairs or maintenance, and how did Texas distinguish residential from commercial roads?
Blading, alone or with watering, was repair; watering alone was maintenance. Repairs to a road connecting a residence to a public road were not taxable, but repairs to private commercial roads were.
Were broiler-house litter cleaning and wood shavings used as a farm desiccant taxable in Texas?
No. Texas said cleaning wood shavings and sawdust from broiler-house floors was a nontaxable service to farmers. The provider could buy shavings and sawdust tax-free with an exemption certificate when…
Did Texas sales tax apply to insurance services performed under stop-loss coverage for self-insured plans?
No. The Tax Policy Committee decided not to apply sales tax to those services, made the policy retroactive to October 1, 1987, and said the rule would be amended.
Which automatic-teller-machine network charges did Texas treat as taxable or nontaxable?
Texas taxed ATM per-transaction processing, file-label generation, network maintenance, data lines, vendor service contracts and installation, equipment, after-hours response pay, and debit-card proce…
Were charges for installing, assembling, repairing, refinishing, or moving a customer's tangible personal property taxable in Texas?
Standalone installation and moving without reassembly were not taxable, but assembly or erection and repair or refinishing were taxable. Related services became taxable when performed with the taxable…
How did Texas tax a separated contract containing both new construction and repair or remodeling work?
Materials were taxable, and the repair-or-remodeling percentage applied only to labor. Each subcontractor had to determine its own taxable labor; the contractor could not simply tax that percentage of…
Was a pre-screening service taxable as credit reporting in Texas, and how did the Comptroller source the service?
Yes. The Comptroller treated pre-screening as a credit-reporting service and sourced it to the delivery point; Texas tax was not due when delivery occurred outside Texas.
Could labor to restore, repair, or remodel a National Register historic building be purchased tax-free in Texas?
Yes. The letter allowed qualifying labor to be purchased tax-free under Rule 3.291(b). With a separated contract and direct-pay certificate, the requester would remit tax only on materials.
Did Texas sales tax apply when Kansas bought debt-collection services for Kansas tax debts owed by people or businesses in Texas?
No. The Comptroller agreed that Kansas was not doing business in Texas under Section 151.107 and could give an exemption stating that it was not engaged in business in Texas.
Were custom-software work, computer repair, and recovery of deleted data taxable under Texas's 1988 rules?
Deleted-data recovery was taxable data processing. Programs made from existing modules and related services were taxable; programs written entirely from scratch were not, and separately stated trainin…
Which sales-tax rate applied when telecommunications equipment was rented with service, rented alone, or sold outright?
Equipment rented with telecommunications service used the service's applicable tax rate. Equipment rented without service or sold outright used the full tax rate in that area; state tax applied to eve…
Could a Texas taxable-service provider buy maintenance agreements, transferred items, natural gas, or electricity tax-free for resale?
Transferred goods and an integral taxable service could be bought for resale, but the provider's maintenance agreements, natural gas, and electricity were not exempt for use in providing taxable servi…
When did taxable debt-collection and insurance services make a bundled accounts-receivable management charge taxable in Texas?
The overall management service was not data processing, but collection follow-ups and insurance-claim preparation were taxable. If bundled taxable services exceeded 5% of the total, the entire charge …
When were a service provider's consultation fees taxable, and was its sale of postage stamps taxable?
General consultations about a customer's ongoing business needs were not taxable, but consultations defining a specific word-processing assignment were taxable. Postage-stamp sales were not taxable.
Were school pictures sold to students exempt from Texas sales tax when the photographer sold them directly or through the school?
No. School-picture sales to students were taxable whether made by the photographer or through the school, because the students—not the school—were making the purchases.
Could Southwestern Bell charge Texas, Dallas, and DART sales tax on a separately stated special municipal charge?
Yes. The Comptroller treated the charge as part of taxable basic local exchange service, and both Dallas and DART imposed sales tax on telecommunications services.
How did Texas tax reroofing an apartment building that also contained an insurance office or other commercial space?
Materials were taxable. If commercial space was 5% or less, the whole building was residential and labor was not taxed; otherwise, residential labor had to be separately stated to remain nontaxable.
Did the Comptroller finally approve or deny reducing both stated capital and surplus by a subsidiary's pre-acquisition earnings?
No final decision is shown. The internal memo recommended denying a parent's attempt to reduce both stated capital and surplus by a subsidiary's pre-acquisition earnings, but STAR's copy leaves the AP…
How did Texas's April 1988 cable-television bulletin tax new plant, extensions, residential drops, nonresidential repairs, and periodic maintenance?
New plant, extensions, residential work, and qualifying new-building drops had nontaxable labor. Nonresidential repair or upgrades were taxable; scheduled preventive maintenance was not.
How did Texas tax title-company purchases of property-tax searches, customer reimbursements, and tax-search services between affiliated corporations?
The title company paid tax when buying a search, but its closing-party reimbursement was not taxable. Qualifying consolidated-return affiliates could provide the service tax-free after paying tax on i…
Which programming, laser printing, stationery, mail-shop, postage, and plastic-card services were taxable in Texas?
Programming and tape-data manipulation, laser printing, stationery, and card embossing or encoding were taxable. Separately stated mail-shop work and postage bought with the client's check without mar…
Were sightseeing tours taxable amusement services, and was a tour consisting primarily of transportation to a rodeo taxable?
The sightseeing tours were taxable amusement services. The rodeo trip was primarily transportation and not taxable, but the operator still had to account for tax on the rodeo admission.
How did Texas tax pool and spa repair, remodeling, equipment work, and cleaning on residential versus commercial property?
Commercial pool work and pool cleaning were taxable on the total charge. Residential pool labor was not taxable, including apartment and HOA pools, but separately charged parts were taxable.
How did Texas classify and tax cleaning, repairing, and repainting storage tanks under its 1988 rules?
Tanks over 500 barrels were real property; tanks of 500 barrels or less were personal property. Cleaning was maintenance, and repainting was remodeling, with the letter treating the described services…
When were pumping containers and cleaning lines in a nonresidential grease-trap, grit-trap, or septic system taxable repair rather than nontaxable maintenance?
Work on a system with flow reduced by waste buildup was taxable repair. Regularly scheduled pumping and line cleaning while the system flowed properly were nontaxable maintenance.
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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.