Is an employer-sponsored telehealth benefit — including online questionnaires, medication profiles, educational content, and at-home test kits — subject to Texas sales tax?

Plain-English summary

A company sells employers a bundled "Full Access Plan" telehealth benefit, mainly focused on gastrointestinal health, for a single lump-sum charge. It includes online health questionnaires, medication profiles, educational articles/videos/courses written by the company's own staff, access to physicians/nurses/dietitians and "gut health coaches," and — at no extra charge, when a clinician directs it — at-home test kits processed by an outside lab. The company asked the Comptroller whether any of this is subject to Texas sales tax.

The Comptroller ruled none of it is taxable. Texas only taxes specifically enumerated services, and telehealth itself isn't one of them. The Comptroller also checked whether pieces of the bundle independently fell into two enumerated categories — data processing and information services — and found neither applied:

• Data processing: although the service involves some computer-based data handling, the providers' use of specialized medical judgment (not mere mechanical data entry/retrieval) takes it outside the data-processing definition, per the "discretion or judgment... based on knowledge of... other fields of study" factor in 34 Tex. Admin. Code § 3.330(a)(1)(C)(iv).
• Information services: the educational content isn't "general or specialized news or other current information" of the kind Rule 3.342 taxes (newsletters, surveys, mailing lists, real estate listings, etc.) — it's original clinical/educational material written by the company's own staff and bundled with the health services, not sold as a standalone information product.
• Test kits: even though a test kit is tangible personal property, the company doesn't sell the kits to patients — its own clinicians use the results to deliver the (nontaxable) telehealth service. No separate retail sale occurs, so no sales tax is due on the kits (though the company owes tax when it purchases the kits itself).

What this means for you

Telehealth and digital-health benefit providers

Bundling questionnaires, medication tracking, educational content, and clinician access into one lump-sum health-benefit charge, where clinical staff exercise professional judgment rather than mechanically processing data, keeps the whole package outside Texas's data-processing and information-service tax categories. The moment a provider sells standalone data compilation/retrieval or public-facing "current information" content separately from clinical judgment, that piece could be reassessed.

Employers offering telehealth as a benefit

This ruling addresses the vendor's sales tax exposure, not the employer's; it's still useful confirmation that a bundled telehealth benefit purchased for employees isn't adding a hidden sales tax cost under this fact pattern.

Accountants and tax professionals

The data-processing carve-out here hinges on 34 Tex. Admin. Code § 3.330(a)(1)(C)(iv)'s judgment/discretion factor — worth flagging any client selling tech-enabled professional services (health, legal, accounting) where staff apply specialized expertise rather than mechanically manipulating data. The information-services analysis leans on Rule 3.342(a)(6)'s illustrative list; content that doesn't resemble those examples (newsletters, scouting reports, mailing lists, etc.) is a good sign it isn't taxable, citing STAR Accession No. 201809008L (2018) for training courses.

Common questions

Q: If a telehealth company includes free test kits, do those become taxable "sales"?
A: Not under this ruling's facts — because the kits are used by the company's own clinicians to deliver the telehealth service (not sold to the patient as a standalone item), there's no retail sale to tax. The company itself owes tax when it purchases the kits.

Q: Does bundling educational content with health services always keep it non-taxable?
A: In this ruling, yes, because the content was original material authored by the company's staff and bundled into one health-service charge — not general/current news-type information sold on its own. A standalone subscription to compiled industry information would likely be analyzed differently.

Q: Can another telehealth company rely on this ruling?
A: No. It binds the Comptroller only for the taxpayer and facts in the request. A company whose staff perform more mechanical data entry/retrieval, or that sells information content separately from clinical services, could reach a different result.

Citations and references

Statutes and rules:

• Tex. Tax Code § 151.051 (Sales Tax Imposed); § 151.010 (Taxable Item); § 151.009 (Tangible Personal Property)
• Tex. Tax Code § 151.0101 (Taxable Services); (a)(10) information services; (a)(12) data processing services
• Tex. Tax Code § 151.0035(a) (data processing service, defined); § 151.0038 (information service, defined)
• 34 Tex. Admin. Code § 3.330 (Data Processing Services), especially (a)(1)(C)(iv) (discretion/judgment factor) and (b)(3) (accounting-professional example)
• 34 Tex. Admin. Code § 3.342 (Information Services), especially (a)(6) (illustrative taxable examples)

Cited prior guidance:

• STAR Accession No. 201809008L (Sept. 11, 2018) — training courses are not an information service

Source

• Landing page (STAR search): https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/202507018L

Original ruling text

July 1, 2025

RE: Private Letter Ruling No. PLR20241031150549

Dear **:

We issue this private letter ruling in accordance with Rule 3.1, Private Letter Rulings and General Information Letters. [ENDNOTE 1] We are responding to your request dated August 23, 2024, and supplemented by a March 18, 2025 meeting, and March 2025 emails. Detrimental reliance relief is provided in accordance with Rule 3.10, Taxpayer Bill of Rights.

You requested guidance on the taxability of certain telehealth services and related items provided with those services such as online health questionnaires, online medication profiles, online educational content (videos, recorded webinars, courses, articles), and test kits.

Facts Presented

** (Taxpayer), provides employers access to telehealth services, primarily for gastrointestinal (GI) related health issues. Other than test kits and possibly some educational content, all included items are services. Taxpayer’s customers provide this access as an employee benefit for individuals enrolled in an employer-sponsored benefit plan or other health plan. Taxpayer sells these items in a lump-sum contract (Full Access Plan).

The telehealth services provided under the Full Access Plan include online health questionnaires, online medication profiles, and related educational content (videos, recorded webinars, courses, and articles). The services also include access by enrolled members to physicians, nurses, dietitians, and other staff such as a healthcare coach. As part of these bundled services, Taxpayer provides a “Care Team” that consists of “gut health coaches” who support covered individuals on nutrition, health, and lifestyle and includes consultation with dieticians. In addition, an enrolled member may “access a collection of articles authored by Taxpayer’s employees.” These employees create all the content and it is not publicly available on other sites.

Also, as part of the Full-Access Plan, a covered individual may request two types of at-home testing kits, a KIT 1 kit and a KIT 2. Taxpayer provides these test kits without an additional charge to enrolled patients upon direction by a medical professional. The kits do not require a physician’s prescription and are processed by an independent third-party laboratory.

Questions, Rulings, and Analyses

Our restatement of your question is shown below, followed by our response and analysis.

Question: Are Taxpayer’s telehealth services, including health questionnaires, medication profiles, related educational content (videos, recorded webinars, courses, and articles), and test kits taxable?

Ruling: No, Taxpayer’s telehealth services, including health questionnaires, medication profiles, related educational content (videos, recorded webinars, courses, and articles) are not subject to sales tax. Telehealth services are not an enumerated taxable service.

Analysis: Texas imposes a sales tax on each sale of a taxable item in this state. Section 151.051 (Sales Tax Imposed). The term “taxable item” includes tangible personal property and taxable services. Section 151.010 (Taxable Item). Section 151.009 (Tangible Personal Property) defines tangible personal property as personal property that can be seen, weighed, measured, felt, or touched or that is perceptible to the senses in any other manner. Only specifically enumerated services are taxable in Texas. Section 151.0101 (Taxable Services). Information services and data processing services are both taxable services. Sections 151.0101(a)(10) and (12). Telehealth services, however, are not an enumerated taxable service.

Taxpayer’s telehealth services are not a data processing service as defined in Section 151.0035(a) (Data Processing Service). See also Rule 3.330 (Data Processing Services). Although Taxpayer performs some activities that may meet the definition of a data processing service, Taxpayer’s use of a computer as a tool in providing the service requires specialized knowledge or interpretive skills. See Rule 3.330(b)(3) (accounting professional’s use of a computer). The comptroller may consider the extent to which the service provider exercises discretion or judgment in individual applications of the processed data based on knowledge of the physical sciences, accounting principles, law, or other fields of study. Rule 3.330(a)(1)(C)(iv). The manipulation of data that depends on the external knowledge and discretionary judgment of the service provider in individual applications suggests that the data processing activity is ancillary to another service and should not be taxable as a data processing service. Id.

Taxpayer’s providers and staff use their specialized knowledge and discretionary judgment to provide the telehealth services. Therefore, Taxpayer’s telehealth services are not a taxable data processing service.

Educational content

Section 151.0038 (Information Service) defines an information service as “furnishing general or specialized news or other current information” or “electronic data retrieval or research.” See also Rule 3.342 (Information Services). Rule 3.342(a)(6) states that information “gathered, maintained, or compiled and made available by the provider of the information service to the public or to a specific segment of industry for a consideration is subject to sales tax.” The rule provides examples of these services, including newsletters, scouting reports and surveys, mailing lists, bad check lists, real estate listings, financial reports, and news clipping services. Id.

Based on the examples in Rule 3.342, Taxpayer’s content is not general or specialized news or other current information. Further, Taxpayer’s educational content does not resemble the types of services described in Rule 3.342(a)(6). Therefore, Taxpayer’s service is not a taxable information service.

The agency has generally treated these kinds of educational services as nontaxable services. See STAR Accession Nos. 201809008L (Sept. 11, 2018) (holding that training courses do not fall within the definition of an information service). Here, Taxpayer employees author the provided articles and Taxpayer sells all its telehealth and related services, including educational content, for a single charge as part of its Full Access Plan. Educational services such as the courses and related educational content bundled by Taxpayer in the Full Access Plan are generally not taxable

Test kits

Although Taxpayer lists test kits as an “ancillary service” that it provides, a test kit is tangible personal property. Taxpayer does not, however, sell the kits on a stand-alone basis. Taxpayer's clinicians use the results from test kits to provide nontaxable telehealth services such as treatment plans. When Taxpayer provides the test kits to enrolled patients as an included test used by Taxpayer in performing the nontaxable telehealth services, Taxpayer is not selling the kits to patients and no sales tax is due. Taxpayer must pay any applicable tax when purchasing kits that are used in providing the nontaxable telehealth services.

Comptroller’s Decisions and STAR documents cited can be found on the Comptroller’s State Tax Automated Research (STAR) system. The Texas Tax Code, Texas Administrative Code, and the STAR system are accessible at www.comptroller.texas.gov/taxes/.

If you have questions about this private letter ruling, please email us through our website at https://comptroller.texas.gov/web-forms/tax-help/ and reference Private Letter Ruling No. 20241031150549.

Sincerely,

Tax Policy Division – Indirect Taxes

Texas Comptroller of Public Accounts

ENDNOTE

1 Unless otherwise indicated, all references to “Section” are to the Texas Tax Code, and all references to “Rule” are to Title 34 of the Texas Administrative Code.