Was tax due on pre-October 1987 advance payments for later trash service, and when did a small quarterly filer report and pay the tax?

Plain-English summary

Trash-collection services performed on or after October 1, 1987 were taxable. Advance payments made before that date for service afterward were also taxable unless the collector had written customer contracts entered into before July 21, 1987.

The letter said the business was then filing quarterly. As long as it owed less than $1,500 in state tax for a calendar quarter, its return and payment were due by the 20th day of the month following that quarter's end.

What this means for you

The historical letter looked to when the trash service was performed, not just when the customer prepaid. Only a qualifying older written contract changed the tax result for post-October service.

Common questions

Were advance payments received before October 1 automatically exempt? No.

When did the prior-contract exception apply? When a written customer contract was entered into before July 21, 1987.

What filing frequency did the letter describe? Quarterly while state tax owed remained under $1,500 for the quarter.

When was the quarterly return due? By the 20th day of the following month.

Citations and references

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

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8710L0844D11

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

October 30, 1987

Dear ***:

Thank you for you recent letter concerning trash pickup in your business.

You state that you have a trash pickup business outside of ** city
limits. You also state that some of your patrons have paid in advance.

You asked if you should collect tax on advance payments paid before
October 1, 1987 for period after October 1, 1987 and how often you should
report the tax collected?

Sales tax is due on trash collection services beginning on or after
October 1, 1987. Unless you have written contracts with your customers
that
were entered into prior to July 21, 1987, sales tax must be collected on
the
advance payments.

Presently you are required to file returns quarterly. As long as you owe
less than $1,500 in state tax for any calendar quarter, you are required
to
file a return and pay the tax on or before the 20th day of the month
following the end of that calendar quarter.

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 Policy Division.

Sincerely,
(Mrs.) Jo Ann Dieck
Tax Policy Division