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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Did a contractor charge Texas sales tax on lump-sum waterproofing, caulking, tuck-pointing, and sealing of existing commercial buildings?
Yes. Beginning January 1, 1988, the contractor had to tax the total materials-and-labor charge for repair or remodeling of existing commercial real property. The rule did not apply to new construction…
Was a separately stated 1% airport authority gross-receipts or commission fee included in the taxable sales price?
Yes, when connected with a taxable item or taxable labor. The fee was business overhead and stayed in the taxable sales price even if separately stated; overhead on nontaxable labor was not taxable.
Which ranch and oilfield jobs did Texas treat as new construction, taxable real-property repair, or taxable cleanup?
New fences, tank pads, working pits, and qualifying new water-line ditches were new construction. Work on existing roads, locations, cellars, and reserve pits was taxable repair; tank-battery cleanup …
Were oil-and-gas publications forecasting market trends taxable information services when sold to multiple subscribers?
Yes. Texas treated the publications as taxable information services because market forecasts were still news or information and the publications fit the oil-and-gas survey example. The particular-clie…
How did Texas tax water conditioning when the provider retained equipment control, sold and plumbed equipment, or performed scheduled maintenance?
Provider-controlled conditioning was nontaxable service. Sold equipment became realty when plumbed; existing commercial installation was taxable remodeling, while scheduled maintenance was nontaxable.
Was a demurrage fee based on welding cylinders still in the customer's possession at month-end subject to Texas sales tax?
No. Texas treated the described demurrage charge as a nontaxable penalty for returning a returnable container after the specified date. No fee was charged when the cylinder was returned before month-e…
Was coin wrapping taxable when offered by a security-services provider, and how were the wrapping supplies treated?
Coin wrapping was nontaxable when separately stated from taxable security services. The provider still had to pay sales tax on all supplies used in the wrapping service.
Were pickup, delivery, incoming-freight, and UPS charges taxable when connected with taxable sales, leases, or services?
Yes. Beginning October 1, 1987, Texas required sales tax on all transportation charges when the seller sold or leased tangible personal property or provided a taxable service such as repair.
Did Texas's affiliated-entity service exemption apply when a corporation provided taxable services to a partnership partly owned by an affiliate?
No. Because the partnership could not join the corporation's consolidated federal return, Texas treated the corporation's services to the partnership as taxable under Section 151.346.
Were house-cleaning services taxable when an individual, rather than a janitorial-service employee, was treated as the household's employee?
No. For sales-tax purposes, the individual was treated as an employee of the households that hired them, and the service earnings were treated like wages rather than taxable sales.
Which charges connected with selling invitations were taxable: printing and calligraphy, or separately stated addressing and mailing services?
Typesetting, printing invitations, and calligraphy were taxable. Separately stated charges for addressing envelopes, typing lists, mailing, looking up addresses, and preparing door or working guest li…
Which claimed exemptions made garbage collection or waste-removal services nontaxable under Texas's 1988 rules?
Residential and car-wash garbage collection remained taxable. Project-specific work for an exempt entity could qualify with an exemption certificate, and hazardous-waste removal could qualify if an ap…
Were sod installation, retaining-wall work, and landscape design or engineering taxable under Texas's 1988 rules?
Sod-installation labor was taxable for new and existing homes. Residential retaining-wall work and new nonresidential walls were contractor work; repair or remodeling of nonresidential walls was taxab…
Were house-cleaning services taxable when an individual cleaner was not an employee of a janitorial-service company?
No. For the stated facts, Texas treated the individual cleaner as the household customers' employee for sales-tax purposes, so the cleaner's earnings were treated like wages rather than taxable janito…
Which auto-glass, mirror, fabrication, tinting, upholstery, and installation labor charges did Texas treat as taxable in 1988?
Texas said damaged auto-glass replacement, auto tinting, and repair or replacement of worn automotive upholstery were not taxable labor. Custom fabrication, work on personal property, non-new-construc…
Could a welding-repair provider buy flux tax-free, or was the flux a taxable consumable supply?
It depended on use. Flux physically incorporated into and sold with the customer's property could be bought with a resale certificate. Flux consumed in the repair or used to clean a surface was taxabl…
How did Texas tax lump-sum rain-gutter installation on new or residential property versus replacement or repair on existing nonresidential property?
For new or residential lump-sum work, the installer paid tax on materials and did not tax the customer. Existing nonresidential repair or replacement was taxable on the total charge.
How did Texas tax swimming-pool maintenance, transferred chemicals, service equipment, lifeguard charges, and purchases by qualifying exempt organizations?
Pool maintenance was taxable on the total charge. Transferred chemicals could be bought for resale, provider equipment was taxable, and lifeguard service was nontaxable only if separately stated.
Were telecommunications equipment, installation, service-connection, maintenance, and in-wall wiring charges taxable in Texas?
Equipment sale, lease, rental, installation, service-connection, and hardware-maintenance charges were taxable. In-wall wiring was real property, and related labor was nontaxable when performed for ne…
Did a company incur successor liability for another business's Texas sales tax when a proposed purchase was terminated and no consideration was paid?
No. Because the purchase agreement ended and the prospective buyer paid no consideration for the business or stock of goods, it should not have successor liability for the seller's sales tax.
Which diabetic equipment, medicine, food, accessories, and shipping charges were exempt or taxable under Texas's 1988 rules?
The answer varied by product and buyer. Prescribed therapeutic devices sold to individuals, insulin, qualifying syringes, and certain prescribed glucose or monitoring items were exempt; many accessori…
Were a company's ultrasonic radiography, magnetic-particle, and dye-penetrant testing services taxable in Texas?
No. Texas treated the described nondestructive testing services—ultrasonic radiography, magnetic-particle testing, and dye-penetrant testing—as nontaxable testing services.
Could an airline take delivery of taxable items in Texas without sales tax when it transported them outside Texas?
Yes. A common carrier could purchase and take delivery of taxable items in Texas without sales tax when the carrier delivered the items outside Texas under its bill of lading.
Were a common carrier's natural gas, electricity, local exchange service, and certain interstate telephone services exempt from Texas sales tax?
No. The carrier's gas and electricity were taxable, as were basic local exchange service and interstate calls that originated from and were billed to a Texas number or service address.
Which receivables-management activities were taxable, and when did the 5% rule make a mixed lump-sum charge fully taxable?
Current-account collection was nontaxable, while insurance-claim processing and computerized billing were taxable. If bundled taxable services exceeded 5% of the total, the full lump sum was taxable.
Were two-way and C.B. radios sold to farmers or ranchers exempt as agricultural equipment, and were installation charges taxable?
No agricultural exemption applied. Two-way and C.B. radios remained taxable even when installed in a tractor or combine, and installation charges were also taxable beginning October 1, 1987.
How did Texas tax a sign company's freight, artwork, crane lifts, lot shredding, real-estate signs, and pylon-sign work in 1988?
Texas gave different answers by service. Freight tied to a taxable sale, artwork, lot shredding, real-estate signs, signs added to existing pylons, and later pylon-sign repairs were taxable; crane-onl…
Was a property owners' association's single annual fee taxable when the association bought taxable items and services for members?
No. The association's annual fee charged to property owners was not taxable. The association instead had to pay tax when buying taxable tangible personal property and taxable services.
Which oil-well, right-of-way, pipeline, and boundary surveys did Texas treat as taxable in 1988?
Oil-well placement and pipeline-location surveys were not taxable when separated from boundary work. Right-of-way boundary surveys and surveys of boundaries around an oil or gas well unit were taxable…
Was labor to repair, paint, or remodel homes, townhouses, condominiums, apartment complexes, and apartment laundry rooms taxable in Texas?
No. Those areas were residential, including unoccupied homes listed for sale and apartment laundry rooms. A separate apartment-complex office was commercial and its labor was taxable.
Which topographical, pipeline, construction-location, well-placement, and well-plat surveying services were taxable in Texas?
Topographical surveys and surveys locating a new residence or commercial structure within a lot were nontaxable. Locating an existing pipeline in an existing right-of-way and preparing plats showing w…
When were grease-trap pumping and sewer cleaning taxable, and which local rate applied to carpet routed through San Antonio for Houston installation?
Grease-trap pumping and related sewer cleaning were nontaxable only when they qualified as documented maintenance under Rule 3.357; otherwise they were taxable nonresidential real-property repair labo…
How did Texas tax vehicle, camper, commercial-building, residential, and new-construction window tinting, plus auto-upholstery and furniture repair?
Vehicle tinting and auto-upholstery labor followed motor-vehicle contractor treatment; commercial-building tinting was taxable in full, residential and new-structure tinting was not, and furniture rep…
Was an arborist's consultation or plant-disease diagnosis taxable even when no tree or shrub treatment was performed?
Yes. Correcting an earlier answer, the Comptroller said arborist consultation and disease or infestation diagnosis were taxable landscaping services even without treatment. Tax applied to the total se…
Were modular walk-in coolers and freezers that could be readily disassembled and relocated tangible personal property, and was labor on them taxable?
Yes. The pre-engineered modular units were tangible personal property, so assembly, installation, repair, maintenance, restoration, and remodeling labor was taxable.
Did Texas's agricultural exemption cover a forklift used exclusively in the field to load and unload a farmer's row crops and lawn turf?
Yes, under the stated facts. Because the farmer grew the crops from seed and was their original producer, a forklift used exclusively to load and unload row crops and turf in the field qualified for t…
When was a construction manager's supervision of commercial repair or remodeling a taxable real-property service rather than nontaxable supervision?
It was taxable when the manager was responsible for the overall job or contracted with subcontractors. Supervision alone was nontaxable when the manager had no responsibility for others' work.
Were independent insurance-adjuster charges taxable services or nontaxable amounts paid from insurance premiums?
They were taxable claims-adjustment or processing services under Section 151.0039. The Comptroller rejected the argument that the charges were part of or paid by insurance premiums.
Was a Texas tax preparer's charge for electronically transmitting completed return data by telephone to the IRS taxable?
Yes. The charge met the revised definition of taxable telecommunications service under Rule 3.344(a)(2) and (b)(4), despite an older rule copy previously sent to the requester.
How did Texas tax commercial pool repair or remodeling, new construction, and residential pool work beginning January 1, 1988?
Commercial pool repair or remodeling was taxable on the total charge. New structures, unfinished new work, added footage, and residential construction or repair had nontaxable labor.
Were hospital plant-and-equipment appraisals taxable insurance services when performed for acquisitions, financing, mergers, or Medicare and Medicaid qualification?
No. The appraisals were not performed on behalf of an insurer or another party connected with an insurance policy, so the letter did not treat them as taxable insurance services.
Who collected Texas sales tax when a scholarship-matching business hired an out-of-state company to send matched information directly to students?
The scholarship-matching business collected tax from students because it made the sale. The out-of-state supplier merely drop-shipped the matched information on the seller's behalf and could accept a …
Were buyers'-club fees, amended data-processing contracts, contract extensions, and separately stated finance-lease interest taxable?
The buyers' club's fee was taxable as an information service, not under the amusement-club rule. Data-processing contract amendments depended on their terms, but an extension created a new fully taxab…
When was a debt-collection service taxable based on the debtor's Texas address and the creditor's Texas location or business activity?
It was taxable when the debtor's address was in Texas when placed for collection and the creditor was located or doing business in Texas. A finance company doing business in Texas met the creditor con…
How did Texas's early-1988 guidance classify labor and materials for vehicle repair, salons, property services, HVAC, sewing, boats, welding, and appliances?
The letter gave service-by-service answers: salon labor and vehicle-repair labor were nontaxable, while many products, personal-property repairs, commercial realty work, sewing, welding, and appliance…
Were roof investigation, bid-document review, re-roof document preparation, and litigation reports taxable Texas information services?
No, not as information services. The Comptroller said the described roof consulting was not taxable on that basis, but warned that insurance loss or damage appraisals and insurance inspections could b…
Which computer consulting, programming, software sale, installation, training, maintenance, and client-data processing charges were taxable?
Consulting about data-processing needs and creating or modifying third-party programs were not taxable. Completed program sales, leases, or licenses and related modification, installation, and mainten…
Which oil-and-gas repair, remodeling, maintenance, and well services did Texas treat as taxable in February 1988?
Texas treated repair and remodeling of listed real property as taxable, and repair or maintenance of tangible personal property as taxable. Work inside a well bore was generally taxable, while work to…
Did Texas's 1988 internal policy require an out-of-state taxpayer with no Texas place of business to pay the sales-tax permit fee?
No. The internal memo said an out-of-state taxpayer without a place of business in Texas did not have to pay the permit fee, but staff had to process an individual waiver to issue the permit.
Did Texas's initial February 1988 response treat typing on a memory-capable typewriter as taxable word processing?
Yes. It treated the typing as taxable word processing under Rule 3.330, while résumé preparation and consultation were nontaxable. A later official response changed the typing conclusion after clarifi…
Which bookkeeping, payroll, computer-printing, consulting, and software-modification services did Texas treat as taxable in 1988?
Bookkeeping, tax-return preparation, financial statements, listed business consulting, and third-party software modification were not taxable. Computer printing, payroll tax returns, W-2s, payroll che…
Were environmental analytical sampling and testing services taxable Texas information services?
No. Texas treated the described environmental analytical sampling and testing for industry, government, consulting firms, and individuals as nontaxable information under Rule 3.342(d)(1).
Were customized financial-planning services taxable in Texas?
No. Texas treated as nontaxable the described service of evaluating a client's present finances, identifying the client's goals, and preparing a financial plan tailored to that client.
Could a rotary cutter used exclusively to mow weeds in a commercial pecan orchard qualify for Texas's agricultural machinery exemption?
Yes, conditionally. If the orchard operation met Rule 3.296's exemption for machinery used exclusively on a farm or ranch to produce food for sale, the buyer could give the seller an exemption certifi…
How did Texas distinguish nontaxable real-property maintenance from taxable repair, remodeling, sign, lighting, elevator, and air-conditioning work?
Scheduled real-property maintenance could be nontaxable, while repair and remodeling were taxable. Mixed lump-sum elevator work was taxable unless repair was 5% or less; sign and lighting work was oft…
Did a property owners' association have to collect Texas sales tax from members on an undivided maintenance charge?
No, on the described facts. The association consumed the services covered by the maintenance charge, so there was no sale to members. If it did not separately state member charges, it paid tax on its …
Was aerial spraying of agricultural crops on farms and ranches taxable when performed exclusively for agricultural purposes?
No. The Comptroller said aerial spraying of agricultural crops on farms and ranches was not taxable when the service was exclusively for agricultural purposes.
How did Texas tax residential ceiling-fan repair, tangible-personal-property repairs, trip charges, service contracts, and items shipped out of state?
Residential ceiling-fan repair labor and its trip charge were nontaxable, while personal-property repairs were taxable in full. Fan service-contract charges and out-of-state shipments were not taxable…
Which location determined Texas city, county, and MTA sales tax on cable-television service after August 31, 1987?
The customer's location. Cable companies had to use that basis beginning with each customer's regular monthly billing period starting on or after August 31, 1987. Previously, local tax followed the se…
Which telex and fax membership, intrastate, interstate, incoming-message, and refundable-deposit charges were taxable?
Membership and Texas-originated or intrastate message charges were taxable. Messages received from outside Texas were nontaxable, and the refundable $95 deposit was nontaxable unless applied to taxabl…
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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.