Ezel / Tax Rulings / TX
TX 8703L0800G11 Sales and/or Use Tax (State,Local,MTA) 1987-03-16

Were Texas day-care service charges and student lunches subject to sales tax?

Short answer: Day-care service charges were not taxable. Student lunches were also exempt when the center was state-licensed for child care under the rule then in effect.

Apply this to your situation

This page answers the general question as of 1987. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1987
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 1987 Texas Comptroller letter treats day-care service charges as nontaxable and makes the lunch exemption conditional on the center being state-licensed for child care under Rule 3.293. The letter itself warned that the Legislature was considering changes that could affect the business. Verify current child-care, licensing, meal, prepared-food, and local-tax rules. STAR documents may no longer represent current policy even when not marked superseded.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 the amount charged for day-care services was not taxable. Charges for lunches provided to students were also exempt if the center was licensed by the state for the care of children.

The letter cited Rule 3.293 for the food-sales exemption and warned that the Legislature then in session was considering sales-tax changes that might affect the business.

What this means for you

The service and meal charges had separate grounds for treatment. Day care itself was nontaxable, while the lunch exemption depended on the center's state child-care license.

Common questions

Were day-care service fees taxable? No.

Were student lunches taxable? Not when the center was state-licensed for child care.

Did the lunch exemption depend on licensing? Yes.

Citations and references

  • Comptroller Rule 3.293 — cited for food sales by licensed day-care centers.

Source

Original ruling text

March 16, 1987

Dear ****:

Thank you for your letter requesting confirmation of the information that
sales tax does not apply to the services you provide in your day care
center.

The amount you charge for day care services is not taxable. The amount
you
charge for the lunches you provide your students is also exempt from the
sales tax if your center is licensed by the state for the care of
children. I
am enclosing a copy of Rule 3.293 which explains the exemption for food
sales
by licensed day care centers.

The Texas Legislature is currently in session and is considering changes
to
the sales tax law which may affect your business. You may wish to
contact
us again after the session ends to find out about any changes.

This opinion is based upon the facts you presented. If there are
additional
or different facts, this opinion may change.

Please feel free to contact me if you have additional questions. You may
write me, call toll free 1-800-252-5555 from anywhere in Texas or phone
512/463-4600.

Sincerely,

Mona Ezell Shoemate
Tax Policy Section
Tax Administration Division

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