Ezel / Tax Rulings / TX
TX 8612L0780A07 Sales and/or Use Tax (State,Local,MTA) 1986-12-09

Was alcohol purchased from an out-of-state supplier for processing surgical biopsies and Pap smears exempt from Texas tax?

Short answer: No. Texas treated the alcohol as a taxable medical-facility supply, and the purchaser could accrue and remit the tax on its sales-tax return.

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 1986 Texas Comptroller letter applies then-current Rule 3.284 to alcohol used by a medical facility to process biopsies and Pap smears. Medical-supply, laboratory, drug, equipment, interstate-purchase, accrual, permit, use-tax, and local-tax rules may have changed or differ for another reagent or use. STAR documents may no longer represent current policy even when not marked superseded. Identities 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 Texas Comptroller said alcohol used to process surgical biopsies and Pap smears was taxable. The sales-tax statute did not exempt supplies and equipment merely because they were necessary to operate a medical facility.

Tax was due on the alcohol bought from the Kentucky supplier. The purchaser could accrue the tax and remit it on its Texas sales-tax return.

What this means for you

Medical use did not by itself exempt the laboratory supply. The out-of-state purchase also did not eliminate Texas tax; the facility was directed to self-accrue and report it.

Common questions

Was the processing alcohol exempt? No.

Did medical-facility use create an exemption? No.

How could the purchaser report the tax? By accruing and remitting it on a sales-tax return.

Citations and references

  • Comptroller Rule 3.284 — drugs, medicines, medical equipment, and devices.

Source

Original ruling text

December 9, 1986

Dear ***:

Thank you for your letter of November 25, 1986, concerning tax on
alcohol used to process surgical biopsies and pap smears.

The sales tax statute does not exempt supplies and equipment necessary
to run a medical facility. I am enclosing a copy of Rule 3.284, Drugs,
Medicines, Medical Equipment and Devices, for your information.

Tax is due on the alcohol you purchase from the Kentucky supplier.

I am sending a sales tax application packet. You may accrue the tax and
remit it on your sales tax return.

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

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