Ezel / Tax Rulings / TX
TX 8502L0633B09 Sales and/or Use Tax (State,Local,MTA) 1985-02-26

Was a bulk sale of coupons taxable when customers later exchanged them at the box office for amusement tickets?

Short answer: No at the coupon-sale stage because the coupons were not themselves amusement admissions. Sales tax was collected from the customer when the coupon was exchanged at the box office for an admission ticket.

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This page answers the general question as of 1985. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1985
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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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 bulk transfer of coupons was not subject to sales tax because the coupons themselves were not admissions to amusements.

Customers had to exchange the coupons at the box office for admission tickets. Sales tax was collected from the customer at the time of that exchange.

The letter confirmed an oral agreement reached at an earlier meeting and did not describe other coupon structures, expiration rules, or any cash redemption.

Common questions

Was tax collected when the coupons were sold in bulk? No. When was tax collected? When the customer exchanged a coupon at the box office for a ticket. Why was the coupon transfer not taxed? The coupons were not themselves amusement admissions.

Citations and references

The reproduced letter cites no numbered statute or rule.

Source

Original ruling text

February 26, 1985

Dear ***:

This letter is written pursuant to our meeting with you and your clients
on February 8, 1985, regarding the bulk transfer of coupons.

It was decided at our meeting that the sale of the coupons was a
transaction not subject to sales tax since the coupons are not
themselves admissions to amusements. The coupons must be exchanged at
the box office for tickets. Sales tax is collected from the customer at
the time of the exchange. This letter confirms our verbal agreement.

If you have any questions or need more information, please call us at
1-800-252-5555 toll free from anywhere in Texas. You may write us at the
Tax Administration Division.

Sincerely,

Tax Policy
Tax Administration Division

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