What general rule did Texas state for written contracts or bids signed before January 1, 1987 when no contract copy was supplied?

Plain-English summary

The operative Comptroller reply said it could not determine whether the referenced contract qualified because the taxpayer had not included a contract copy.

The reply gave a general historical rule: a written contract or written bid for specific items signed before January 1, 1987 qualified until the original contract ended or was renegotiated or renewed. All prior-contract exemptions expired September 30, 1989.

The STAR record is internally mismatched. It begins with a December 9 Crown Central Petroleum request asking whether the 1987 rate increase followed invoice date or activity date, but the attached reply is addressed to James E. Rude of InterFirst Corporation and refers to a different December 17 letter. The reply does not resolve Crown's invoice-versus-activity question.

What this means for you

The general prior-contract rule is stated in the reply, but no taxpayer-specific conclusion was possible without the contract. The separate Crown question remains unanswered in this record.

Common questions

Did the Comptroller approve the referenced contract? No. It lacked the contract copy.

What documents generally qualified? Written contracts or bids for specific items signed before January 1, 1987.

When did protection end? At contract end, renegotiation or renewal, or September 30, 1989.

Did the reply answer whether invoice date or activity date controlled? No.

Citations and references

• The reply cited no numbered statute or Comptroller rule.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8701L0788A03

Original ruling text

CROWN CENTRAL PETROLEUM CORPORATION
P.O. BOX 1759 * HOUSTON, TEXAS 77251

December 9, 1986

Comptroller of Public Accounts
Capital Station
State of Texas
Austin, Texas 78774

SUBJECT: TEXAS SALES & USE TAXES FOR CONTRACTORS

Dear Sir,

We are requesting information concerning the new state sales use tax rate
increase effective January 1, 1987.

Please let us know if the rate increase will be effective according to
the
invoice date or from the date of activity.

Your written reply is requested. Thank you in advance for your help.

Sincerely,

Cleve King
Contract Compliance
Accountant

CK/s

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

January 13, 1987

James E. Rude
InterFirst Corporation
P.O. Box 83000
Dallas, TX 75283-1174

Dear Mr. Rude:

Thank you for your letter of December 17, 1986, concerning an exemption
from
the increase in the sales tax rate for a contract entered into prior to
January 1, 1987.

You did not include a copy of the contract, therefore it is not possible
to
determine whether the contract you refer to qualifies for exemption.

In general, if a written contract or written bid for the purchase of
specific
items is signed prior to January 1, 1987, it will qualify until the
original
contract ends or until renegotiated or renewed. All prior contract
exemptions will expire September 30, 1989.

This opinion is based in 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 me at
1-800-252-5555 toll free from anywhere in Texas. The regular number is
512/463-4600. You may write me at the Tax Administration Division.

Sincerely,

Julie Pesl
Tax Policy Section
Tax Administration Division

JP/gb