Ezel / Tax Rulings / TX
TX 8602L0699A13 Sales and/or Use Tax (State,Local,MTA) 1986-02-24

Were a foreign corporation's officers and directors personally liable for Texas sales tax when the corporation lacked required permits?

Short answer: Yes, for tax that should have been collected and remitted during their tenure. They were not personally liable for tax incurred before they became officers or directors.

Apply this to your situation

This page answers the general question as of 1986. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1986
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 1986 Texas Comptroller taxpayer-response letter based on a specific foreign corporation's activities, lack of authority and tax permits, and the timing of each officer's or director's tenure. It expressly says different facts could change the opinion. Current responsible-person, corporate-registration, permit, collection, and sales-tax rules may differ, and STAR documents may no longer represent current policy even when not marked superseded.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 Comptroller said the officers and directors serving while the foreign corporation conducted taxable business without a Certificate of Authority or a sales or use tax permit were personally liable for tax the corporation should have collected and remitted.

The timing mattered. A person was not personally liable for a tax liability incurred before that person's tenure as an officer or director.

Common questions

Did the corporation's lack of a permit eliminate the tax? No. The letter treated the uncollected and unremitted tax as a liability.

Was every officer or director liable for every period? No. The letter excluded liabilities incurred before the person's tenure.

Did the letter decide liability after an officer or director left? It did not expressly address that question.

Citations and references

The reproduced letter cites no numbered statute or rule.

Source

Original ruling text

February 24, 1986

Dear ***:

I have received your letter of February 11, 1986, concerning the tax
liability of the officers and directors of a foreign corporation engaged
in business in Texas.

I understand that the corporation was engaged in business for sales tax
purposes and its activities in Texas constituted representation requiring
a Certificate of Authority to do business in Texas issued by the Secretary
of State. The Corporation did not have a Certificate of Authority, nor did
it have a sales tax or use permit.

Under these conditions, the officers and directors during the period are
personally liable for the tax that should have been collected and
remitted to Texas.

If the liability was incurred prior to their tenure as an officer or
director, they are not personally liable for the tax.

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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