Ezel / Tax Rulings / TX
TX 8408L0589D14 Sales and/or Use Tax (State,Local,MTA) 1984-08-30

Were movie or video club membership fees subject to Texas state sales tax under Letter Ruling 8408L0589D14?

Short answer: No. The Comptroller said movie or video club membership fees were not subject to Texas state sales tax. The short 1984 letter did not address charges for renting or selling videotapes, local taxes, or any other club charge.

Apply this to your situation

This page answers the general question as of 1984. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1984
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is an official 1984 Texas Comptroller of Public Accounts letter published on the State Tax Automated Research (STAR) system. It addresses only movie or video club membership fees and does not cite a statute or rule, so verify current law and do not extend it to rentals, sales, or other charges. Letters on STAR can be the basis of a detrimental reliance claim only for the taxpayer to whom the letter was directly issued (see 34 Tex. Admin. Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded. Taxpayer-identifying details are redacted. This summary is informational only and is not legal or tax advice.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page) is the authoritative source for any reliance.

Plain-English summary

The Texas Comptroller said movie or video club membership fees were not subject to state sales tax.

That is the letter's entire substantive holding. It does not discuss videotape rentals or sales, late fees, deposits, local taxes, bundled membership benefits, or any statute or rule.

What this means for you

Membership-based video businesses

The historical letter treated the membership fee itself as nontaxable. It did not decide the treatment of any separate transaction made through the club.

Accountants and tax professionals

Keep the holding narrow. The letter supports only the state-tax result for the stated movie or video club membership fee under the 1984 treatment.

Common questions

Q: Was the club membership fee subject to Texas state sales tax?
A: No.

Q: Did the letter decide whether videotape rentals were taxable?
A: No. Rentals are not discussed.

Q: Did it address local sales tax?
A: No. The letter mentions only state sales tax.

Citations and references

  • The letter does not identify a statute, rule, or legislative act.

Source

Original ruling text

August 30, 1984

Dear **:

Thank you for your letter of August 10, 1984, regarding taxation of movie
club membership fees.

Movie (or video) club membership fees are not subject to state sales tax.

If you have further questions please write or call our toll-free number,
1-800-252-5555.

Sincerely,

Miss Jeannon Kralj
Tax Policy Section
Tax Administration Division

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