Ezel / Tax Rulings / TX
TX 8505L0647E08 Sales and/or Use Tax (State,Local,MTA) 1985-05-21

Did another bowling center's assumption of league contracts end their prior-contract exemption?

Short answer: No, provided the new center did not change the contracts' rates or lengths. Copies of the old contracts had to be retained with the new contracts.

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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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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

When one bowling center went out of business, other centers could assume its bowling-league contracts without affecting the prior-contract exemption. The result required no change in either the contract rate or its length. The new center also had to keep copies of the old contracts with the new contracts.

Common questions

Did a new bowling-center owner automatically lose the exemption? No. What contract terms had to stay unchanged? The rate and contract length. What records were required? Copies of the old contracts kept with the new ones.

Citations and references

The reproduced letter cites no numbered statute or rule.

Source

Original ruling text

May 21, 1985

Dear ***:

Thank you for your letter concerning the assumption of bowling league
contracts and its effect on the prior contract exemption.

It is my understanding that X BOWL is going out of business and that
the bowling leagues under contract are looking for other bowling centers
to honor those contracts. These contracts may be assumed without any
effect on the exemption so long as there are no changes in the rate or
length of the contracts. Copies of the old contracts should be kept on
file with the new contracts.

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

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 Section
Tax Administration Division

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