Ezel / Tax Rulings / TX
TX 8608L0753C03 Sales and/or Use Tax (State,Local,MTA) 1986-08-05

Did a bowling center's new ownership end the historical sales-tax exemption for league agreements signed before October 2, 1984?

Short answer: No. The old agreements remained exempt prior contracts despite the ownership change, but the letter expressly said that exemption expired on September 30, 1987.

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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded. This letter's stated prior-contract exemption expired on September 30, 1987, so its result is historical. 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

Bowling-league agreements signed before October 2, 1984 qualified as prior contracts exempt from sales tax. The bowling center's change in ownership did not end that treatment.

The letter also supplied an explicit end date: the exemption for all prior contracts expired on September 30, 1987. The conclusion is therefore historical rather than a current exemption.

Common questions

Did new ownership cancel the prior-contract exemption? No.

Which bowling agreements qualified? Agreements signed before October 2, 1984.

How long did the exemption last? Through September 30, 1987.

Source

Original ruling text

August 5, 1986

Dear ***:

Thank you for your letter of July 10, 1986 concerning the taxability of
Bowling League Agreements.

If the agreements were signed prior to October 2, 1984, they will qualify
as prior contracts exempt from sales tax regardless of the fact that the
bowling center is under new ownership. The exemption for all prior
contracts will expire on September 30, 1987 however.

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. The regular number is
512/463-4600. 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.