Ezel / Tax Rulings / TX
TX 8410L0596A01 Sales and/or Use Tax (State,Local,MTA) 1984-10-23

Was testing blowout preventers a taxable transaction in Texas?

Short answer: No. The Comptroller said the described blowout-preventer testing was not a taxable transaction, without explaining the testing method or legal basis.

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 Texas Comptroller of Public Accounts letter published on the State Tax Automated Research (STAR) system. 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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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. Consult a licensed Texas tax professional about your specific situation.
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 the described testing of blowout preventers was not a taxable transaction.

The ruling is very short. It does not describe the test, the equipment, the customer, or the legal reasoning. STAR's broad metadata names several testing categories, but the body decides only blowout-preventer testing.

What this means for you

Oilfield testing businesses

This letter records a nontaxable result for one redacted blowout-preventer test, but it does not provide enough facts to classify a different service.

Accountants and tax professionals

Do not extend the holding to semiconductor, metal, oil, equipment, or weld testing based on metadata alone.

Common questions

Q: Was the blowout-preventer testing taxable?
A: No.

Q: Does the letter explain why?
A: No.

Q: Did the body decide other testing services?
A: No.

Citations and references

  • The letter cites no statute or administrative rule.

Source

Original ruling text

October 23, 1984

Dear *****:

Thank you for your recent letter regarding the testing of blowout
preventers.

In my opinion this is not a taxable transaction.

This opinion is based upon the facts you presented. If there are
additional or different facts, this opinion may change.

Please feel free to contact me if you have additional questions.
You may write me, or call toll free 1-800-252-5555 from anywhere
in Texas or phone 512/475-1931.

Sincerely,

Al Van Allen
Tax Policy Section
Tax Administration Division

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