Ezel / Tax Rulings / TX
TX 8607L0749E01 Sales and/or Use Tax (State,Local,MTA) 1986-07-30

What happened when a coffee-vending service bought taxable and nontaxable items together for one lump-sum price?

Short answer: The entire lump-sum charge was taxable. Nontaxable items had to be separately listed to be excluded from the sales-tax base.

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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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

A coffee-vending service bought cases of coffee, sugar, creamer, soup, cups, canned drinks, and similar supplies and was charged sales tax on all items.

The Comptroller said a single lump-sum purchase combining taxable and nontaxable items was taxable in full. To remove nontaxable items from the tax base, those items had to be listed separately.

The body does not discuss the gift baskets, cookie canisters, or fruit baskets named in STAR's broader caption, so this page does not extend the holding to those products.

Common questions

Was the whole mixed-item lump sum taxable? Yes.

How could nontaxable items be excluded? They had to be separately listed.

Did the operative letter decide the tax treatment of gift baskets? No. Those items appeared in the STAR caption, not the ruling body.

Source

Original ruling text

July 30, 1986

Dear ***:

Thank you for your letter of July 16, 1986 concerning items sold to
companies by coffee vending services.

You purchase cases of coffee, sugar, creamer, soup, cups, canned drinks,
etc. from *** and are charged sales tax on all items purchased.

When taxable and non-taxable items are purchased together for a lump-sum
charge, the entire charge is subject to sales tax. The non-taxable items
must be listed separately to be excluded from 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 Administration Division

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