Ezel / Tax Rulings / TX
TX 8710L0844G04 Sales and/or Use Tax (State,Local,MTA) 1987-10-27

Were accident reinvestigation, consulting, and information-compilation charges to insurers and attorneys taxable as claims services?

Short answer: Yes. The described services were taxable as insurance-claims adjustment or claims processing, including charges to insurers and attorneys.

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 an interstate accident investigator's described services. It says the opinion may change if the facts differ. Its classification under Emergency Rule 3.355 is historical; verify current definitions and taxability for each activity. STAR documents may no longer represent current policy even when not marked superseded.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 business described reinvestigating traffic accidents, consulting with trucking companies, instructing police, attorneys, and insurers about accidents, and compiling information for insurers and attorneys to use in court.

The Comptroller treated the described services as taxable insurance-claims adjustment or claims processing. Charges to insurance companies and attorneys were taxable. The letter enclosed Emergency Rule 3.355.

What this means for you

The historical letter classified the investigator's combined accident work by its insurance-claim function, not merely by the business's investigator label. Its answer covers only the activities described in the attached request.

Common questions

Were the described accident-investigation services taxable? Yes.

How did the Comptroller classify them? As insurance-claims adjustment or claims processing.

Were charges to both insurers and attorneys taxable? Yes.

Citations and references

  • Texas Comptroller Emergency Rule 3.355, enclosed with and cited by the letter

Source

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

October 27, 1987

Dear *:

Thank you for your letter of September 4, 1987, concerning your sales tax
responsibilities as an interstate accident investigator.

The services described in your letter are taxable as insurance claims
adjustment or claims processing. Your charge to insurance companies and
attorneys is taxable. Enclosed is a copy of Emergency Rule 3.355.

A sale tax application packet is being set under separate cover.

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,
Eddie C. Washington
Tax Policy Division

September 4, 1987

Jerry Martin
Controller of Public Accounts
Capitol Station
Austin, Texas 78774

Dear Mr. Martin:

RE: Tax permit for Interstate Accident Investigation Service.

As advised by you in our telephone conversation, the follow-
ing is a description of what will be done in my Company.

This is an Investigative Service to re-investigate traffic
accidents. It will also involve consulting work with large
trucking companies about accidents. There will be consulting
and instruction to police, attorneys, and insurance companies
to understand traffic accidents.

Most of my time will be spent compiling information for
insurance companies and attorneys for courtroom use.

There will be fees to attorneys and insurance companies
as a retainer, depending on the severity of the accident; and
fees will also be charged on a hourly basis.

Sincerely yours,

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