Ezel / Tax Rulings / TX
TX 8705L0818G11 Sales and/or Use Tax (State,Local,MTA) 1987-05-19

Was a charge to a food-booth operator for booth space taxable in Texas when calculated as a flat fee, a percentage of sales, or both?

Short answer: No. The Comptroller said food-booth space rental was not taxable whether charged as a flat amount, a percentage of the operator's gross sales, or a combination.

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 decides only the taxability of a charge to a food-booth operator for booth space. Although STAR's caption also names admissions, concerts, food, and drinks, the letter body contains no ruling on those subjects; this page treats them as unresolved. The letter cites no statute or rule. Verify current event, rental, vendor, 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 STAR documents may no longer represent current policy even when not marked superseded.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 a charge to a food-booth operator for renting booth space was not taxable. The result was the same whether the charge was a flat amount, a percentage of the operator's gross sales, or a combination of the two.

The operative letter discusses only booth-space rent. It does not decide the taxability of admissions, concerts, food, drinks, or the booth operator's own sales, despite those subjects appearing in STAR's caption.

What this means for you

Changing food-booth rent from a fixed price to percentage rent did not change the letter's result. Event organizers and vendors still need to analyze their other charges and sales separately because this record does not address them.

Common questions

Was a flat food-booth rental charge taxable? No.

What if rent was a percentage of the booth operator's gross sales? It was still not taxable.

What if the agreement combined a flat fee and percentage rent? The letter says that was also not taxable.

Did the letter rule on event admission, concerts, food, or drink sales? No. Those issues do not appear in the operative text.

Citations and references

  • The letter cites no statute or administrative rule.
  • Its entire holding is that food-booth space rental was not taxable under any of the three stated pricing methods.

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

BOB BULLOCK
Comptroller May 19, 1987

Dear ***:

Thank you for your letter of May 13, 1987 concerning space rental for
food
booths.

The charge to the operator of a food booth for rental of space for a food
booth is not taxable, whether the charge is a flat rate, a percentage of
the
operators gross sales or a combination of the two.

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 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

Get today's answer for your situation

You just read a 1987 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.