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.
Could new gas-and-electricity study rules be applied retroactively to support equipment, and could Texas require engineer-prepared or reviewed energy audits?
The support-equipment rule was to apply prospectively, requiring split study periods. The letter also defended engineer review for future audits.
Was a labor-only direct-mail preparation and delivery service subject to Texas sales tax?
No. The Comptroller treated the described labor-only mailing service as nontaxable because it was not connected with the sale of taxable items.
Who made the taxable sale when customers redeemed seven cheese labels for a free dish fulfilled by a Texas company?
The customer received a gift, not a sale. The fulfillment company sold to the cheese company and collected tax on Texas shipments, including shipping and handling.
How did Texas tax flight suits used in photographs and a flight simulator rented with or without an operator?
The photographer paid tax on suits. For a nontraining simulator, operator rentals taxed components but not rent; customer-only rentals reversed that.
Were purchases by the U.S. Economic Development Administration exempt from Texas sales and use tax?
Yes. Texas treated the agency as an instrumentality of the U.S. Government and exempted its purchases from sales and use tax.
When could buyers of trash containers or compactors give a resale or exemption certificate instead of paying Texas sales tax?
A resale certificate applied when equipment was transferred in a taxable service or bought for resale, lease, or rental; municipal own-use purchases could be exempt.
Was a one-time 50-cent validation fee for a promotional 'twicket' taxable as an admission charge?
Yes on the submitted facts. Texas treated the validation fee as a reduced charge for entry, while offering to reconsider with the ticket and accounting records.
Could a vehicle-rental business preserve or transfer unreimbursed motor vehicle tax when it sold its assets and liquidated?
No. The Comptroller said the approximately $25,000 unreimbursed balance would be lost when the corporation sold its assets and liquidated because no future rental receipts would remain for reimburseme…
Did a corporate stock sale or merger trigger new Texas motor vehicle tax on the corporation's trailers?
No under the facts presented. Buying the corporation's stock did not change the corporation's ownership of its trailers, so the corporation could continue its historical rental-tax reimbursement and d…
Which restaurant electricity uses qualified for exemption in 1987, and when did energy for immediate-consumption food become taxable?
Only production-equipment electricity qualified after August 3, 1987; energy used to prepare food for immediate consumption became taxable October 1, 1987.
When did a garbage collector billing one month after service first need to include Texas sales tax?
On the November invoice for October service. Garbage collection became taxable October 1, 1987, when the state sales-tax rate also increased to 6%.
Were transportation charges connected with a Texas sale of cement subject to limited sales and use tax?
No. Cement was exempt from limited sales and use tax because it bore cement production tax, and transportation of the exempt item was also exempt.
What Texas sales-tax credit could a gallery claim after a financed painting was repossessed under a recourse arrangement?
The gallery could claim credit only for the principal purchase-price balance still unpaid when the painting was repossessed.
Was Glister Anti-Plaque Chewing Gum taxable in Texas, or did it qualify as a food product?
It was taxable. The letter said chewing gum was candy under Rule 3.293(a)(2), not a food product for sales-tax purposes.
After Texas HB 61, when were freight and local delivery charges on business forms included in taxable sales price?
Customer-paid freight billed directly by the carrier stayed nontaxable, but distributor-billed freight and transportation charges became taxable after October 1, 1987, even if separately stated.
Were standby, idle-time, short-load, and other labor or service charges connected with concrete sales included in the taxable selling price?
Yes. The Comptroller treated standby, idle-time, less-than-load, and concrete-life-extension services as part of the taxable selling price rather than excludable labor.
How did Texas tax a lawn-care provider's total customer charge and its purchases of chemicals, fertilizer, plants, supplies, and equipment?
The total service charge was taxable. Chemicals, fertilizer, and plants transferred to customers could be bought for resale, while provider-purchased supplies and equipment were taxable.
Could an aircraft dealer buy used aircraft for resale, display and test-fly them in Texas, refurbish them, and sell to a qualifying foreign buyer without Texas sales or use tax?
Yes, on the stated facts. The purchase and refurbishing qualified for resale treatment, display and test flights were incidental to resale, and an immediate qualifying nonresident sale was exempt unde…
Which City of Waco landfill, roll-off-container, and disposal-coupon charges were taxable under Texas's 1987 garbage-service rules?
Landfill admission was nontaxable, but roll-off collection and public-site disposal coupons were taxable; convenience stores could buy coupons for resale and then report tax on retail sales.
Could parties make an affixed cogeneration plant taxable personal property merely by stating that characterization in their lease?
No. Contract language could matter when a fixture's status was genuinely doubtful, but this cogeneration plant was obviously an improvement to realty, so its lease was a nontaxable real-property lease…
How did Texas tax landscaping and lawn-care charges and the fertilizer, chemicals, plants, supplies, and equipment used in the service?
Tax applied to the total service charge. Providers could buy chemicals, fertilizer, and plants for resale when transferred to customers, but owed tax on supplies and equipment not transferred.
Where did Texas source city, county, and MTA tax on intrastate private-line service when it appeared on the same or a separate bill from local exchange service?
Same-bill private-line service originated at the local-exchange situs; separately billed service originated at the customer's primary serving address fixed when service began.
Did radioactive gold seeds permanently implanted in the body to treat malignant tumors qualify for Texas sales-tax exemption?
Yes. The Comptroller said radioactive gold seeds qualified for exemption when they were permanently implanted in the human body.
Could an auctioneer refund Texas sales tax when a successful bidder returned equipment and received a full refund?
Yes. Although the original auction sale was taxable, § 151.007(c)(2) excluded returned property from sales price when the total charge was refunded by cash or credit, allowing the tax refund.
How much Texas sales tax did a cash-basis lessor report when a Chapter 11 lessee paid only 35% of scheduled equipment rent?
Tax was due only on rental payments actually received under the lessor's cash-basis reporting method. If the remaining rent was later received, tax would then be due on the full amount received.
Did a computer used to track registration numbers and pedigrees for cattle raised for sale qualify for Texas's agricultural sales-tax exemption?
No. A computer used for recordkeeping was not equipment used in the direct production, processing, or marketing of an agricultural product.
How did Texas tax a portrait seller's purchase and resale of slides, photographic enlargements, and a painting?
The seller's pre-sale use of slides made film and processing taxable to her, while unused enlargements could be bought for resale; she collected tax on the full customer package price.
How did Texas treat transportation, mailing, word-processing, and clipping-service charges during the 1987 tax-law transition?
Transportation rules changed October 1, word processing became taxable January 1, 1988, standalone stuffing and stamping was nontaxable, and clipping plus necessary reading was taxable.
When could a Texas machinery auction avoid sales tax for interstate shipment or refund tax after documented export?
Interstate exemption required the auctioneer to deliver immediately to a common carrier and keep the bill of lading; Texas storage made tax due. Proper export proof supported a refund under Rules 3.32…
Were two-way radios and shared repeater services exempt as farm and ranch equipment, and could the Comptroller assess a dealer that relied on earlier agency information?
The radios were taxable because they were not used directly and exclusively in agricultural production, but the Comptroller deleted the existing audit liabilities due to the dealer's reliance on prior…
Were building components and materials used to build or repair a farm barn exempt from Texas sales tax?
No. The Comptroller said barn building components and materials were taxable, so the seller could not accept an exemption certificate for those purchases.
Was the lease with a purchase option equal to 69% of estimated fair market value an operating lease, and when was Texas sales tax due?
It was an operating lease because the option was not nominal under Rule 3.294. Tax generally became due with each lease payment, but tax collected upfront had to be reported in that period.
Which typing-service charges were taxable in Texas for a single personalized document, extra copies, and multiple original copies?
A single personalized letter or report was nontaxable, but extra copies for an added charge and multiple printing such as 20 original form letters were taxable.
Could an electric utility bill a customer later for Texas sales tax it failed to charge on earlier electricity bills?
Yes. The Comptroller said a retailer that failed to charge sales tax at the time of sale could later recover the tax from the purchaser.
Could a telephone company collect and remit Dial 976 sales tax for its information-provider sponsors under its own permit?
Yes, if sponsors agreed and the company's records supported audit verification. The later letter allowed sponsors holding permits only for 976 tax to cancel them after October 1987.
Were the listed blood-testing instruments and disposable cartridges taxable in Texas, and when could the seller accept an exemption certificate?
The devices were taxable. The seller could accept a timely Rule 3.285 certificate from a hospital claiming an organizational exemption under Rule 3.322(b) or (c).
Could a Texas auction purchase avoid sales tax when the buyer, rather than the seller, hired a common carrier for immediate shipment to New York?
Yes, if the goods were delivered immediately to the carrier at the auction site and the auctioneer kept the bill of lading. Buyer storage in Texas made the sale taxable.
Were Company A's aircraft sale to a nonresident foreign lessor and the aircraft's leaseback to Company A subject to Texas sales tax?
No. The sale qualified for the nonresident-aircraft exemption, and the leaseback was exempt because Company A would operate the aircraft as a licensed, certificated carrier.
Were construction materials exempt when homeowners hired the contractor but a city paid for housing renovations with federal grant funds?
No. The materials were sold for improvements benefiting individual homeowners, not sold to or used exclusively for the city, so no exempt-entity renovation exemption applied.
How did Texas sales and use tax apply to United States Constitution Coins?
Tax applied when coins or currency were sold above face value or had no face value. For U.S. money with a face value, that amount was subtracted before tax was computed.
Would the company's revised pattern-equipment ownership agreement establish that it sold a pattern to its customer?
Yes, if the agreement was properly executed before the sales invoice and the pattern received the accounting treatment described in the Comptroller's earlier March 16 letter.
Could a contractor or subcontractor claim the 1987 prior-contract exemption without having its own written contract or bid with suppliers?
Yes, if the owner-general-contractor contract or bid met the pre-January 1, 1987 timing and fixed-price requirements. The contractor did not need separate written supplier contracts.
How did Texas tax the lease-purchase agreement after classifying it as a financing lease?
Tax was due when the lessee took possession or the first payment became due, whichever came first, and it was calculated on the contract value rather than the equipment's original cost.
Was electricity used to operate disposal wells exempt when it transported artificially mixed salt water injected into oil wells?
No. The artificially mixed salt water was not naturally occurring brine or a material extracted from the earth, so electricity used to transport it was not exempt.
Could a customer's letter document a Texas sales-tax exemption for valves intended for offshore use or export?
For the offshore-use exemption, yes if the letter identified Section 151.324(a), described the property, and otherwise formed a valid good-faith certificate. It was not enough under the drilling-equip…
Was a $25 employee per diem recharged to customers part of the Texas sales-tax base for taxable services?
Ordinarily yes, because per diem connected with taxable services was an includable expense. The Comptroller allowed this company to exclude it because the company did not book the amount as income.
Were materials, supplies, and equipment bought by Houston Lighting and Power to support litigation for South Texas Nuclear Power Plant participants exempt from Texas sales tax?
No. The Comptroller found no exemption for Houston Lighting and Power's litigation-support purchases; a contract exemption for incorporated construction materials did not extend to them.
Did a riding mower used to cut grass around commercial greenhouses qualify for Texas's agricultural machinery exemption?
No. The mower maintained the grounds around the greenhouses rather than producing agricultural products for sale, so it did not qualify.
Who had to collect and remit Texas sales tax on property sold by resident and nonresident table holders at a gun show?
Every table holder selling tangible personal property had to collect tax regardless of home state. The promoter could remit for them or require each seller to hold a Texas permit.
Did anchoring, plumbing, and wiring a rented prefabricated building make it real property for Texas tax purposes?
No. The building remained tangible personal property because it was intended as a one- or two-year temporary bank facility and was rented separately from the land.
How would an MTA rate election affect Helotes, could a city withdraw, and what would a city telecommunications-tax ordinance do?
The MTA-wide vote and rate applied throughout the authority, and the full rate funded transit. Rule 3.423(b) provided a withdrawal method; a city telecom ordinance extended local tax without changing …
Which parts of a master equipment lease qualified for Texas's pre-1987 prior-contract exemption, and what later changes ended that treatment?
Only the master lease and schedules signed before January 1, 1987 qualified. Later schedules, subleases, renewals, purchases, upgrades, or renegotiations were new taxable transactions.
Were normally taxable tubing-removal services nontaxable when performed to enable an oil-well acid job?
Yes. Viewed as a whole, the crew's work facilitated the acid job, so the normally taxable down-hole services became nontaxable.
Were liquidated-damage fees paid to a delayed granite fabricator included in the Texas sales-tax price of the granite?
Yes. The fees were part of the granite's sales price. The resale purchase caused no immediate tax, but the contractor owed tax if supplier cost including fees exceeded the customer contract price.
Was the seller's Shippers Export Declaration sufficient proof for a Texas sales-tax exemption on exports to Mexico?
No. It did not meet Rule 3.323(c)(1). The seller had to collect tax when the customer took possession in Texas, then could refund it after receiving proper export documents.
Could a seller use a stamped impression on its invoice as an agricultural exemption certificate, and what information had to appear?
A stamp could work, but the submitted wording did not. It needed purchaser details, item description, a purchaser-written specific exemption reason, and a separate signature and date.
Was drilling mud lost or consumed during a drilling operation taxable when part of the price was paid as a rental charge?
Yes. The mud was a consumable supply sold with deferred compensation, and sales tax was properly billed on the amount consumed rather than returned.
Which equipment and supplies could commercial trawlers buy exempt from Texas sales tax?
Vessels over eight tons could exempt items becoming component parts, such as navigation equipment and rigging. Broader supplies required exclusive interstate or foreign coastwise commerce and Rule 3.2…
Were blend-stock products used as gasoline components subject to Texas motor-fuels tax or sales and use tax?
They were outside the motor-fuels tax law but subject to sales and use tax. A reseller could buy with a resale certificate and then collect tax or take one from its customer.
Could verbal quotations qualify for Texas's 1987 prior-contract exemption?
No. A qualifying real-property contract had to be written and signed by both parties before January 1, 1987, without tax-based change or modification.
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.