Ezel / Tax Rulings / TX
TX 8511L0680B11 Sales and/or Use Tax (State,Local,MTA) 1985-11-01

Was an estate's private distribution of appraised personal property among twelve heirs subject to Texas sales tax?

Short answer: No. The Comptroller said the described distribution among the heirs was not taxable.

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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 private estate-distribution plan among twelve nonspousal heirs, using appraised values and an heirs-only auction without a licensed auctioneer. STAR's caption mentions an aircraft and states a no-consideration rationale, but the reproduced body does not mention an aircraft or explain the legal basis; this page follows the body. It expressly says different facts could change the opinion. Current estate, inheritance, auction, vehicle, property-transfer, and sales-tax rules may differ, and STAR documents may no longer represent current policy even when not marked superseded. Letters on STAR can support detrimental reliance only for the taxpayer to whom the letter was directly issued under 34 Tex. Admin. Code Rules 3.1 and 3.10. 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 estate included real property, household and other personal property, farm equipment, and motor vehicles. After special bequests, the will divided the estate equally among twelve nonspousal heirs.

The co-executors proposed assigning each heir one-twelfth of the appraised estate value and holding a private auction only among the heirs, without a licensed auctioneer, to distribute the personal property fairly.

The Comptroller said the described distribution was not taxable.

Common questions

Was the heirs-only distribution taxable? No.

Was the auction open to the public? No.

Did a licensed auctioneer participate? No.

Did the reproduced body discuss an aircraft? No.

Citations and references

The reproduced letter cites no numbered statute or rule.

Source

Original ruling text

November 1, 1985

Dear ***:

Thank you for your recent question. I have restated your fact situation
with response below.

Situation: We have an estate valued by two different qualified appraisers
in excess of one million dollars. The estate consists of real property,
personal property, i.e. household furniture, fixtures, equipment, linens,
books, chinaware, utensils, and other miscellaneous household items,
some of which are heirloom and antiques, farm tractors and equipment, and
motor vehicles.

There are twelve heirs none of which are spousal. The will reads
after special bequeathed items, the estate is to be divided equally
amount the heirs.

The co-executors have come up with a plan. Since the appraisers placed values
on the individual items in the estate, the plan is; to divided the dollar
amount of the appraised estate by twelve and assign that monetary value to
each heir. Hold an auction among the heirs. The auction will not be open to
the public and no licensed auctioneer will be present. This plan is intended
to help disburse the personal property in fair and equitable manner.

Question: Is the distribution of the personal property among the heirs using
the above situation subject to sales tax.

Response: The distribution of the property is not taxable.

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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