Ezel / Tax Rulings / TX
TX 8703L0801D11 Sales and/or Use Tax (State,Local,MTA) 1987-03-12

Did a Texas taxpayer have to notify the Comptroller of contracts claimed exempt from the January 1, 1987 sales-tax rate increase?

Short answer: No notice was required. The taxpayer had to keep the written contracts, bids, and exemption certificates available for a Comptroller auditor to verify the claimed exemptions.

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 addresses recordkeeping for exemptions tied specifically to the January 1, 1987 state sales-tax rate increase. It does not decide whether any particular contract qualified, and the cited provision and procedures may have changed. Verify current contract, exemption-certificate, audit, 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 STAR documents may no longer represent current policy even when not marked superseded.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 taxpayer did not have to notify the agency about prior contracts under Section 151.339(3).

The taxpayer did have to retain the written contracts, bids, and exemption certificates in its files. Those records had to be available for a Comptroller auditor to review when verifying claimed exemptions from the January 1, 1987 state sales-tax rate increase.

What this means for you

The letter addressed procedure and proof, not whether a particular contract qualified. No advance notice was required, but the exemption claim still needed written support available for audit.

Common questions

Did the taxpayer have to notify the Comptroller? No.

What records had to be retained? Written contracts, bids, and exemption certificates.

Did the letter approve a particular exemption claim? No. It explained what records had to be available to verify claimed exemptions.

Citations and references

  • Tex. Tax Code § 151.339(3) — cited for the prior-contract notification issue.

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

BOB BULLOCK
Comptroller March 12, 1987

Dear ***:

Thank you for your letter of February 27, 1987 concerning prior contract
exemptions from the January 1, 1987 increase in the state sales tax rate.

It is not necessary to notify the Comptroller of prior contracts as
indicated
in Sec. 151.339(3). You are required to have written contracts, bids and
exemption certificates available in your files for review by a
Comptroller's
auditor to verify any claimed exemptions.

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

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