A university owns and operates a parking garage used mostly by its own students, faculty, and staff, with about 10% of the use going to the general public. Are the parking charges to the university's own students, faculty, and staff subject to Texas sales tax?

Plain-English summary

A taxpayer described a parking garage owned and operated by a university, used for the university's own students, faculty, and staff, with about 10% of the use expected to go to the general public. The taxpayer asked how Texas sales tax applies to the parking charges.

The Comptroller's answer was short and direct: parking permits sold to the university's own faculty, staff, and students are exempt from Texas sales tax. However, the university must collect sales tax on parking charges to other tenants of the building and to the general public — that is, on the portion of use not tied to the university's own personnel and students.

The letter doesn't cite a specific statute or rule number for this exemption, so this summary sticks to the holding as stated rather than guessing at the underlying legal basis.

What this means for you

Universities and colleges operating their own parking facilities

Parking permits sold specifically to your own students, faculty, and staff can be exempt from sales tax. But any parking you sell to outside tenants of the building or to the general public is taxable — you'll need to track and separately account for that portion of use.

Accountants and tax professionals

If a client institution runs a mixed-use parking facility (own personnel/students vs. outside tenants/public), expect the exemption to apply only to the "own personnel and students" slice — plan for split reporting based on who's actually paying for the permit or space.

Common questions

Q: Are parking fees a university charges its own faculty, staff, and students subject to Texas sales tax?
A: No — this letter confirms those charges are exempt.

Q: What about parking charges to the general public or to other building tenants?
A: Those charges are taxable, per this letter.

Q: Does the letter cite a specific statute or rule for this exemption?
A: No — the letter states the exemption without citing a specific Tax Code section or Comptroller rule number, so this page doesn't attribute one either.

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

Citations and references

No specific statutes or rule numbers were cited in this letter.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/200001996L

Original ruling text

January 24, 2000

Dear **:

Thank you for your recent fax regarding a parking garage owned and operated by
UNIVERSITY and Texas sales tax.

In your letter, you provided the following information. UNIVERSITY owns and
operates a parking garage for the use of its students, faculty, and staff. It
is anticipated that 10% of the use will be for the public.

Parking permits for faculty, staff, and students are exempt from Texas sales
tax. Sales tax should be collected on the parking charges to other tenants of
the building and the general public.

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, if 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