A company plans to hold a Texas seminar training pharmacists on preparing compounded pharmaceutical products, and will provide notebooks and workbooks as part of the training. Is the training taxable, and who pays sales tax on the materials?

Plain-English summary

A company planned to hold a seminar in Texas training pharmacists on preparing compounded pharmaceutical products, and asked about the sales tax treatment of both the training itself and any materials given to attendees.

The Comptroller's answer:

• The training itself is not subject to Texas sales tax.
• If the provider gives attendees materials such as notebooks, workbooks, or other tangible personal property as part of the seminar (i.e., bundled into the price of attending), the provider must pay sales tax on those items when it purchases them — the provider is treated as the end consumer of the materials, not as reselling them.
• If the provider instead offers those items for a separate charge to attendees, the provider must collect Texas sales tax on that separate charge to the attendee.

What this means for you

Seminar, course, and vocational training providers

Your training/tuition charge itself is not taxable, but how you handle handout materials matters: give them away as part of the seminar price, and you (the provider) owe tax on your own purchase of them; charge attendees separately for them, and you must collect tax from the attendee instead.

Pharmacists and other seminar attendees

Expect training/tuition itself to come tax-free, but a separately priced course kit, workbook, or materials package should carry Texas sales tax.

Accountants and tax professionals

A clean, general illustration of the standard rule for nontaxable service providers who also distribute tangible personal property: bundled-in materials shift the tax burden to the provider's own purchase, while separately charged materials shift it to a collection obligation on the sale to the customer.

Common questions

Q: Is seminar/training tuition taxable in Texas? A: No, the training itself is not subject to Texas sales tax.

Q: What about workbooks or notebooks given out during the seminar? A: If they're bundled into the price of attending, the provider pays sales tax when purchasing them. If they're charged separately, the provider must collect sales tax from the attendee.

Q: Does this depend on the subject matter of the training (e.g., pharmacist compounding)? A: The letter's rule is stated generally for training/seminar materials — the pharmacist compounding training in this letter is simply the specific fact pattern presented.

Q: Can I rely on this letter for my own seminar? A: No. This opinion is based on the facts presented, and additional or different facts may yield different results; it can be relied on only by the taxpayer it was issued to.

Citations and references

No statutes or rules are cited in the letter's text.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/200001025L

Original ruling text

January 31, 2000

Dear **:

Thank you for your recent letter regarding seminars held in Texas and Texas sales tax.

You stated that your client is planning to provide training to pharmacists on preparing compounded pharmaceutical products.

Training of this nature is not subject to Texas sales tax. If you are providing materials such as notebooks, workbooks, or other tangible personal property as part of the seminar, you must pay sales tax on those items when they are purchased. If you offer items for a separate charge, you must collect Texas sales tax on those items.

This opinion is based on the facts presented. Additional or different facts may yield different results.

You may call me toll free 1-800-531-5441, extension 5-9787, of you have any questions or need more information. The direct line is 512/305/9787. You may also write to Tax Policy Division, Comptroller of Public Accounts.

Sincerely,

Philip Knisely
Tax Policy Division