Ezel / Tax Rulings / TX
TX 8710L0843D10 Sales and/or Use Tax (State,Local,MTA) 1987-10-27

Were pager-service fees taxable when the provider supplied equipment or the customer used its own, and how was the equipment purchase treated?

Short answer: Pager-service fees were taxable either way. Equipment transferred with the service could be bought for resale; retained equipment could not.

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 is a taxpayer-specific October 1987 Texas Comptroller letter about pager service and equipment. It says the opinion may change if the facts differ. Its 1985 state-tax date, 1987 local-tax date, and resale treatment are historical; verify current telecommunications taxes and equipment 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 STAR documents may no longer represent current policy even when not marked superseded.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

Pager service was a telecommunications service subject to state tax since October 1, 1985. The letter said local and metropolitan transit authority taxes could also apply beginning October 1, 1987.

The provider could issue a resale certificate for equipment actually transferred to customers as part of the paging service. It had to pay tax on equipment it retained rather than transferred.

The pager-service fee remained taxable when the customer supplied and maintained its own equipment.

What this means for you

The historical letter separated the taxable service fee from the provider's equipment purchases. Customer ownership of the pager did not exempt the service, while actual transfer of provider-purchased equipment determined whether resale treatment was available.

Common questions

Was pager service taxable without provider equipment? Yes.

Could the provider buy transferred equipment for resale? Yes.

What about equipment the provider kept? The provider had to pay tax on it.

Could local and MTA taxes apply? Yes, effective October 1, 1987 under the letter.

Citations and references

  • No statute or rule number is cited in the ruling text.

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

BOB BULLOCK
Comptroller October 27, 1987

Dear ***:

Thank you for your recent letter concerning the taxability of pager
services.

Pager service is a telecommunication service that has been subject to
state
tax since October 1, 1985. Effective October 1, 1987, local and MTA
taxes
may apply (see attached list).

You may give a resale certificate in lieu of tax on equipment you
transfer to
your customer as a part of the paging service.

You should pay tax on all equipment not actually transferred to your
customer.

Tax is also due on the fee for pager services when the customer provides
and
maintains their own equipment.

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

If you have nay 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 Policy Division.

Sincerely
Adina Whittemore
Tax Policy Division

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