An accountant wants to offer telephone technical support answering bookkeeping 'how to' questions and software questions to clients — does that require charging Texas sales tax?

Plain-English summary

An accountant who prepares financial statements for professionals and small businesses was considering offering a telephone technical support program for clients — answering "how to" questions on bookkeeping procedures as well as software technical support. As a Texas resident, the accountant asked whether Texas sales tax needed to be charged.

The Comptroller drew a clear line:

• Technical support answering questions about accounting or bookkeeping procedures is not subject to Texas sales tax.
• A charge for software technical support IS taxable — but only if the person providing the support also sold the software in question, under Rule 3.308.

What this means for you

Accountants and bookkeepers offering phone/consulting support

If you're only answering "how to" questions about bookkeeping and accounting procedures, that support isn't taxable, regardless of delivery method (phone or in person). But if you also sell software and separately charge for supporting it, that software support charge is taxable — the taxability hinges on whether you were the seller of the software being supported, not on how the support is delivered.

Software resellers offering support plans

If you sold the software, expect your technical support charges on it to be taxable under Rule 3.308. If you're supporting software you didn't sell (e.g., a general bookkeeping consultant fielding "how does this software work" questions incidentally), that support is more likely to fall outside the taxable software-support category — check the specific facts.

Accountants and tax professionals

This letter cleanly illustrates the seller-nexus test in Rule 3.308: technical support on software is taxable specifically when tied to the support-provider's own prior sale of that software, not merely because software happens to be involved in the support call.

Common questions

Q: Is phone support answering general bookkeeping questions taxable?
A: No, technical support on accounting or bookkeeping procedures is not subject to Texas sales tax.

Q: Is software technical support always taxable?
A: It's taxable specifically when the person providing the support also sold the software, per Rule 3.308.

Q: Does it matter if the support is delivered on-site versus by phone?
A: The letter doesn't draw a distinction based on delivery method — the taxability turns on whether the support-provider sold the software, not how the support is delivered.

Q: Can I rely on this letter for my own support offering?
A: No. This opinion is based on the facts presented; other facts, though similar, may provide a different result.

Citations and references

Rules:

• 34 Tex. Admin. Code Rule 3.308 (computers — hardware, software, services)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/200004170L

Original ruling text

April 4, 2000

Subject: Sales Tax

Dear **:

Thank you for your e-mail inquiry. Your fact situation and question are
restated below.

I am an accountant that provides financial statement preparation to
professionals and small businesses. I am considering offering a telephone
technical support program for my clients. This service would include answering
"how to" questions on bookkeeping procedures and software technical support.
Do I need to charge Texas sales tax? (I am a Texas resident.)

Response: Texas sales tax is not due on technical support answering questions
regarding accounting or bookkeeping procedures. Texas sales tax is due on a
charge for software technical support if you sold the software. See Rule
3.308.

Sales tax rules can be accessed on the Internet at:

http://www.window.state.tx.us/taxinfo/rulendx/ruleindex.html

If needed, you may download an application for a sales tax permit at:

http://www.window.state.tx.us/taxinfo/taxforms/01-forms.html

The State Tax Automated Research system may be accessed on the Internet at:

http://www.window.state.tx.us/

This opinion is based on the facts presented. Other facts though similar may
provide a different result.

I hope this information answers your questions. If you need additional
information, please call me toll-free at 1-800-531-5441, extension 3-4502. The
direct line is 512/463-4502. You may also write to Tax Policy Division,
Comptroller of Public Accounts. You may also e-mail our tax help section at:

Gilbert Zamora

Tax Policy Division