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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Do materials that become part of a Texas newspaper lose their sales-tax exemption when the newspaper is distributed free?
No. The letter said giving newspapers away did not void the exemption for tangible personal property that becomes an ingredient or component part of a newspaper.
Did retailers selling tangible personal property on a Texas military base have to collect state, city, and MTA sales tax?
Yes, on the facts presented. Based on the city's statement that the base was within its limits, the Comptroller said retailers on the base should collect state, city, and MTA tax.
Were Texas city-pound, wrecker-service, and body-shop charges for storing impounded vehicles taxable?
Yes. The Comptroller treated the motor-vehicle storage fees as taxable, required the company to pay the tax, and said it could not give the storage providers a resale certificate.
Was a Texas steel seller's labor for flame cutting, sawing, and shearing its steel taxable?
Yes. The Comptroller treated flame cutting, sawing, and shearing the seller's steel as taxable remodeling, even when the work changed only the item's size and not its function.
Could electronic well-logging equipment qualify for a Texas exemption if immediately removed from the state, and was Texas repair labor taxable?
The equipment qualified for exemption under the cited Section 151.324 provisions if the purchaser immediately removed it from Texas. Repairing it in Texas did not void that exemption, but the repair l…
Was the membership card sold by the taxpayer's client subject to Texas sales tax?
No. The Comptroller said the membership card was not subject to tax, without describing the card's benefits or explaining the legal basis for the result.
Was a manufacturing-facility transfer into a newly formed 86/14 partnership taxable in Texas?
No. The Comptroller treated the described sale of a 14% interest and the partners' immediate contribution of their 86% and 14% interests as a nontaxable joint-ownership transfer under Section 151.306.
When was Texas sales tax due on a financing lease, and when could separately stated interest be excluded?
A financing lease was treated as a sale. Tax was due at possession or when the first payment became due, whichever came first, and applied to the full lease amount unless the interest rate or actual i…
Which Texas repair, handling, travel-time, and mileage charges were taxable when work was or was not covered by a manufacturer's warranty?
Manufacturer-warranty labor and the described handling charge for warranty parts were not taxable. Labor, travel time, and mileage for other service work were taxable unless performed under a manufact…
Did Texas's October 2, 1984 sales-tax changes make limousine service taxable?
No. The Comptroller said limousine service was not taxable under the October 2, 1984 changes to the Texas sales-tax law.
Was an aircraft-engine maintenance agreement subject to Texas sales tax?
No. The Comptroller said a maintenance agreement for repair of an aircraft was not taxable, whether the agreement covered the entire aircraft or only its engine.
Was a standalone Texas courier service that delivered documents and small packages for others taxable?
No. A business that sold no products and merely delivered documents and small packages provided a nontaxable service. A retailer using that service might still have to tax delivery as part of its own …
When did Texas require tax collection on a financing lease, and what collection right did the lessor have against the lessee?
Tax had to be collected when the lessee took possession or when the first payment became due, whichever came first. The cited law required adding tax to the selling price and provided a remedy to coll…
How did Texas distinguish a permanent real-property improvement from a sale and installation for floating boat docks and marinas?
Classification depended on permanent intent and whether removal would substantially damage the realty or improvement. The letter explained the tax rules for each category but did not expressly decide …
How did Texas tax a city's golf green fees, sales of food or other tangible property, and parking-meter fees in 1984?
The city did not collect tax on green fees at its golf course. It had to collect the stated 5 1/8% historical rate on sales of tangible property, including food, and on all parking-meter fees.
Which automobile, component, and accessory repairs did Texas treat as taxable under the 1984 repair law?
Repair of a motor vehicle, an operational component, or a component accessory was not taxable. Repair of an accessory was taxable; the letter listed a car radio as a nontaxable component-accessory exa…
Were Texas manicure, waxing, and sculptured-nail services taxable, and who paid tax on the supplies used?
The services were not taxable. The provider had to pay tax when purchasing all tangible items used to perform the manicures, waxing, and sculptured-nail services.
How did Texas tax TV pickup and delivery, warranty repair parts, and flat-rate manufacturer warranty charges?
TV pickup and delivery charges were taxable. Manufacturer-warranty repair parts created no tax liability if properly recorded and bought with an exemption certificate, and a flat-rate charge to the ma…
Were tool regrinding and sharpening taxable in Texas after October 2, 1984, and where was tax due?
Yes. The Comptroller classified regrinding and sharpening tools as repair work that became taxable on October 2, 1984, and said tax was due where the customer was located.
Did Texas's October 2, 1984 tax on repair and maintenance labor apply to piano tuning and repair?
Yes. The Comptroller said new legislation made repair and maintenance labor taxable effective October 2, 1984, so piano tuning and repair were taxable.
Was a dealer's $150-per-month employee use of inventory cars with dealer plates a taxable motor vehicle rental?
No. Internal Comptroller guidance concluded the arrangement was not a rental because employees did not receive exclusive use: the dealer could recall each car for demonstration or sale at any time. Th…
Was a Texas charge for videotaping monitored television news reports taxable when either the provider or customer supplied the tape?
Yes. The Comptroller treated the videotaping charge as taxable processing whether the provider or customer supplied the tape. The letter also allowed credit for tax paid when purchasing blank tape.
How did Texas tax truck fabrication, equipment installation, wreck repair, replacement, and body-conversion work?
The treatment depended on the job. Motor-vehicle repair labor was not taxable, but remodeling was. Fabrication and equipment sales were taxable, separately stated installation could be excluded, and d…
Was the Personal Independent Transport Accessory exempt from Texas sales tax as a wheelchair lift?
Yes. The Comptroller said the Personal Independent Transport Accessory was exempt from sales tax as a wheelchair lift.
What did this Texas letter say about the prior-contract exemption for a fixed-term parking contract?
The letter says a fixed-term parking contract entered before October 2, 1843 qualified for the prior-contract exemption through September 30, 1987. Because the printed threshold is 1843, the source do…
How did Texas's October 2, 1984 tax change affect ongoing boat repairs, boat-lifting charges, and slip rentals?
Documented repairs begun before October 2, 1984 could finish under the old statute and rate. A separately stated boat-lifting charge became taxable on that date, while boat slip rentals were not taxab…
Which all-breed dog-show admissions, entry fees, printed programs, and catalog advertising were taxable in Texas?
Spectator admission charges and sales of printed programs were taxable. Fees paid to enter a dog in the show and sales of advertising in the catalog were not taxable.
Was providing and maintaining power generators at customer locations for a flat daily charge a taxable Texas rental?
Yes. The Comptroller treated the arrangement as a taxable generator rental even though the provider maintained the units. Tax applied to the daily or standby rate, and engine oil and filters could be …
Did a federal real-property improvement contract entered before October 2, 1984 qualify for Texas's prior-contract exemption?
Yes. The letter said the federal real-property improvement contract entered before October 2, 1984 qualified for the prior-contract exemption from the stated historical 4 1/8% sales tax.
Was a separately stated charge for laboratory analysis of diesel-engine lubricating oil taxable in Texas?
No. The internal Tax Policy memo said a separately stated charge for testing diesel-engine oil was not taxable when performed alone, during unrelated repairs, or during engine repairs.
How did Texas tax oilwell pump-unit motor work, control-panel repairs, incidental charges, and overhead power-line construction?
Motor rewinding, installing a repaired motor, control-panel and cable repairs, and related incidentals were taxable. Separately stated labor to set poles and build new overhead power lines was not, wh…
When were Texas installation and repair labor for orthopedic or prescription therapeutic equipment exempt from tax?
Separately stated installation labor was not taxable. Repair labor was exempt for orthopedic equipment or prescribed therapeutic equipment when tied to the prescription; repair of nonexempt equipment …
Was testing blowout preventers a taxable transaction in Texas?
No. The Comptroller said the described blowout-preventer testing was not a taxable transaction, without explaining the testing method or legal basis.
Could a corporation lease employee parking with a resale certificate when it charged some employees but let others park free?
Spaces relet to employees for $50 could be leased with a resale certificate, and the corporation collected tax on the employee fee. For spaces provided free, the corporation had to pay tax on its $100…
Were Texas packing, crating, and shipping labor and the related packing materials taxable for domestic and international shipments?
Packing, crating, and shipping labor was not taxable. Materials protecting items shipped outside U.S. territorial limits could be bought with an exemption certificate, while materials for U.S. shipmen…
How did Texas require a direct-sales organization to collect and report state, city, and MTA tax for independent salespeople?
The organization was the seller responsible for collection and remittance based on suggested retail price. Independent sellers did not need permits or returns, and city or MTA tax had to be reconciled…
Was a Texas laundromat's wash-and-fold service charge taxable?
Yes. The Comptroller said the laundromat's entire wash-and-fold service charge was taxable.
How did Texas's October 2, 1984 tax change apply to seasonal and month-to-month fur storage already underway?
Seasonal storage begun before October 2, 1984 stayed nontaxable even with monthly payments. Month-to-month storage was taxable for periods beginning after that date; the source's example has conflicti…
Were State Fair of Texas carnival ride tickets and admissions taxable when the fair was a co-producer?
No. After reviewing the fair's midway expenses and contract, the Comptroller concluded the State Fair was a co-producer of the carnival, so ride tickets and admissions were not taxable. Tax already co…
When were Texas zoo admissions, rides, tours, tobacco sales, and vendor commissions taxable?
Admissions and society-provided rides or tours were nontaxable if the zoo operator proved 501(c)-type exempt status, but taxable if it was for-profit. For-profit contractors' rides and tobacco sales w…
Was electricity purchased to transmit cable-television signals exempt from Texas sales tax?
No. The Comptroller said electricity purchased to transmit cable-television signals was not exempt from sales tax.
Was repair labor taxable when a manufacturer paid the full cost under its warranty, and how were those charges reported?
No tax was due on repair labor when the manufacturer paid the entire warranty-repair cost. The repairer had to keep warranty records and could deduct charges to the manufacturer from gross sales when …
When did Texas treat commercial refrigeration, cooking, HVAC, and exhaust equipment as personal property or real property for repair-labor tax?
Repair labor on personal property was taxable, including commercial refrigerators and cooking equipment merely attached to a wall or floor. Labor on built-in real-property equipment, central HVAC syst…
Was labor to repair or service an above-ground or below-ground swimming pool or spa taxable as work on real property?
Repair or service labor on a permanent real-property improvement was not taxable. A below-ground pool qualified, as did an above-ground pool or spa attached to a deck with fill-and-drain plumbing inco…
Was the sale of advertising space in Texas newspapers and magazines taxable?
No. The Comptroller said the sale of space in newspapers and magazines was not taxable.
Were museum admission charges sold by a Texas tax-exempt organization taxable?
No. The Comptroller agreed that the tax-exempt organization's museum admission charges were not taxable, while stating that this exemption on its sales applied only to amusement services.
Were materials for federal real-property lump-sum contracts bid before October 2, 1984 exempt under Texas's prior-contract rule?
Yes. Materials bought for the described federal real-property lump-sum contracts bid before October 2, 1984 qualified for the prior-contract exemption, which the letter said remained valid only throug…
Which tax-exempt park-board admissions, rentals, parking fees, equipment rentals, and vending-machine sales were taxable in Texas?
The listed park, museum, fishing, bumper-boat, locker, and pavilion charges were nontaxable for the exempt Park Board. Vending sales, civic-center parking, and movable-equipment rentals were taxable; …
Were annual-fair admissions and extra ride or game charges taxable when a tax-exempt organization or a for-profit operator provided them?
Fair admissions were not subject to state or city sales tax because the tax-exempt organization sold the amusement service. Extra amusements were exempt only when it provided them directly; for-profit…
Were costs of storing, preserving, and towing an impounded vehicle taxable under Texas's Abandoned Motor Vehicle Act process?
Storage and preservation costs were taxable and the tax was deducted from sale proceeds before payment to the owner or lienholders. Separately stated charges such as towing were not taxable.
Was leasing propane tanks to Texas customers taxable, and could the lessor buy the tanks with a resale certificate?
Yes. The propane-tank leases were taxable, and the lessor could give its supplier a resale certificate instead of tax when acquiring the tanks for lease.
Were major-appliance repair parts and labor taxable when the manufacturer paid the full warranty-repair cost?
No. Repair parts and labor were not taxable when the manufacturer paid the entire cost under its warranty. The repairer had to keep records showing that the parts and services were for manufacturer-wa…
Which Texas charges for pet grooming, boarding, training, and handling were taxable?
Pet grooming was taxable. Charges for pet boarding, training, and handling were not taxable.
Could a Texas retailer round a sales-tax rate when its cash register could not program the full rate?
No. The law did not permit rounding the rate. If the retailer rounded up, it had to remit the extra tax collected; if it rounded down, it had to pay the difference between tax collected and tax actual…
How did Texas tax financing leases of removable energy-management systems, including demonstration units, interest, and installation charges?
A financing lease was a sale, taxed at possession or the first payment due date. Demonstration units were taxed when the lease was signed. The full lease was taxable unless interest and installation w…
Which Texas storage-stall charges for automobiles, recreational vehicles, trailers, and a boat with its trailer were taxable?
Storage charges for automobiles, recreational vehicles, and trailers became taxable October 2, 1984. A single charge for storing a boat together with its trailer was not taxable.
Was a lump-sum architectural-model project a taxable sale of a model or a real-property construction service in Texas?
It was a taxable sale of an architectural model, not a real-property contract. Tax applied to the sales price including materials and labor, while materials incorporated into the model could be bought…
Was electricity used to extract oil from the ground exempt from Texas sales tax, and what certificate was required?
Yes. The Comptroller said electricity used to extract oil from the ground was specifically exempt, and the purchaser had to give the utility company an exemption certificate.
Was a Texas utility's minimum bill taxable when the meter appeared to show zero natural-gas or electricity consumption?
Yes, unless conclusive evidence showed no consumption. The minimum bill was part of the utility's gross receipts and presumed taxable even when the meter face appeared to show zero use.
Did Texas require colleges and universities to collect tax on student and faculty parking permits and fees in 1984?
No. On September 25, 1984, Comptroller Bob Bullock reversed an earlier September 17 instruction and said colleges and universities did not need to collect tax on student and faculty parking permits an…
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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.