Ezel / Tax Rulings / TX
TX 8607L0744G13 Sales and/or Use Tax (State,Local,MTA) 1986-07-11

Were radio transceivers sold to individual members of tax-exempt organizations exempt merely because the members belonged to those organizations?

Short answer: No. Section 151.310(a)(2) applied to qualifying purchases by the exempt organization itself, not purchases by its members or stockholders, so the seller had to collect tax.

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 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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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 requester sold radio transceivers to members of tax-exempt organizations.

The Comptroller explained that Section 151.310(a)(2) allowed a 501(c)(3) organization to buy tangible personal property tax-free when the item related to the organization's purpose and was not used for a private stockholder's or individual's personal benefit.

That statute did not exempt purchases made by members or stockholders themselves. The seller therefore had to collect tax on the transceiver sales.

Common questions

Were sales to individual members exempt? No.

What purchases could qualify? Purchases by the 501(c)(3) organization itself that related to its purpose and were not for private personal benefit.

What did the seller have to do? Collect sales tax on the radio transceivers.

Citations and references

  • Tex. Tax Code § 151.310(a)(2) — qualifying purchases by exempt organizations.

Source

Original ruling text

July 11, 1986

Dear ***:

Thank you for your letter of June 20, 1986, concerning tax on radio
transceivers sold to members of tax exempt organizations.

Under Tex. Tax Code Ann. 151.310 (a)(2) a 501 (c)(3) organization may
purchase tangible personal property tax exempt if the item relates to the
purpose of the organization and the item is not used for the personal benefit
of a private stockholder or individual. The statute does not exempt purchases
by a member or stockholders of the corporation.

The corporation should collect tax on the sale of radio transceivers.

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

Get today's answer for your situation

You just read a 1986 ruling on this question. Ezel checks current Texas tax law and answers your specific situation, with citations.

Opens in Ezel Pro. Every answer cites the authority it relies on.