Ezel / Tax Rulings / TX
TX 8510L0667C14 Sales and/or Use Tax (State,Local,MTA) 1985-10-18

Was a charge for advertiser message time on a free telephone information service taxable in Texas?

Short answer: No. Advertisers paid only for message time on the service; the digitized messages were not sold to them.

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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 1985 Texas Comptroller taxpayer-response letter based on a free public telephone service carrying advertiser messages produced on floppy disk and converted to digitized voice. Advertisers bought presentation time and did not buy the messages. STAR's caption refers to electronic distribution to broadcast or television stations, but the reproduced body describes only the telephone service, so this page follows the body. It expressly says different facts could change the opinion. Current advertising, telecommunications, digital-media, data, and sales-tax rules may differ, and STAR documents may no longer represent current policy even when not marked superseded. 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 business solicited advertisers for a free telephone information service. Callers dialed one number to hear advertiser messages. The business produced each message on a floppy disk and converted it to digitized voice for use only on its own service.

Advertisers did not buy the messages; they paid only for the time used to present them. The Comptroller said that charge was nontaxable.

Common questions

Was the advertiser's charge taxable? No.

Did the advertiser buy the digitized message? No.

Did the reproduced body address television or broadcast-station distribution? No.

Citations and references

The reproduced letter cites no numbered statute or rule.

Source

Original ruling text

October 18, 1985

Dear **:

Thank you for your recent letter to ***, I have been asked
to reply. Your letter is restated with response below.

As per our conversation on October 1, 1985, you had checked into a
question I had about my new business, COMPANY A in CITY. My question
was: is this business, which is a different advertising medium, state
taxable? Let me explain myself further. COMPANY A is owned by CORP X
and we solicit advertisers to advertise on the telephone so that people
may call one phone number to hear a number of messages (by the advertisers)
of information. It is free to the public and we produce the message at
our office to be used only on our service. The messages are produced on
a floppy disk and is converted as a digitized voice. The messages are not
sold to the advertisers, the time they have to present the messages
is only charged. It is very similar to radio spots, because radio
advertisers only pay for the time on the air.

Response: As you describe it, the charge is not taxable. I am enclosing
an appropriate rule for your reference.

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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